CLEMENT HOWELL HIGH SCHOOL

BUSINESS DEPARTMENT

END OF YEAR EXAMINATION

June 2024

PRINCIPLES OF BUSINESS

STUDENT NAME:

FORM: 4Bus 1 DATE OF EXAM:

SUBJECT TEACHER: W. Blake DURATION: 50 Minutes

Paper 1

INSTRUCTIONS TO CANDIDATES

Attempt All Questions

SCORING

SECTION SCORE ACTUAL SCORE

A 50

TOTAL 50
PLEASE DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

Attempt all questions in this section by circling the letter that corresponds to
the correct response.

(1) In a market economy who or what decides what goods and services will
be produced?

(a) The central government

(b) The local government

(c) The price Mechanism

(d) The producers-correct

(2) Which of the following countries does NOT currently practice

communism?

(a) Cuba

(b) Brazil-correct

(c) Peoples Republic of China

(d) North Korea

(3) The voluntary combining of the assets and liabilities of two or more firms
to form a single firm is referred to as a
(a) Merger-correct

(b) Joint Venture

(c) Assimilation

(d) Takeover

(4) The word limited as a part of a company name means that:

(a) Capital is limited

(b) The number of shareholders is limited

(c) The number of shares are limited

(d) The liability of the shareholders is limited-correct

(5) An improvement in product quality through the use of better quality

materials may cause an increase in the production cost. This increased cost
may best be offset by

(a) Reducing advertisement

(b) Increasing the selling price of your goods-correct

(c) Paying lower salaries and wages to your employees

(d) Increasing sales volumes

(6) Which clause is included in the Articles of association?

(a) The voting rights of shareholders-correct

(b) The name of the company with limited as the last word

(c) The Authorized capital of the corporation

(d) The address of the registered office of the corporation.

(7) Which of the following groups of stakeholders have the largest volume of
responsibilities to the firm?

(a) Managers-correct

(b) Employees

(c) Pressure groups

(d) Shareholders

(8) The minimum number of shareholders that can be in a Public Limited

Company is

(a) 5 (b) 6 (c) 7-correct (d) 8

(9) The document outlining the external relationship of a company, such as

the company’s name and address is called

(a) A memorandum of association-correct

(b) An articles of association

(c) Certificate of incorporation

(d) Trading Certificate

(10) A pure monopoly is a market structure that has all of the following
characteristics EXCEPT

(a) A single seller controls the supply and the market price of a good or
service

(b) The market price of the good or service is controlled by competition -

correct
(c) The market is protected by barriers to entry

(d) There is no adequate substitute for the good or service

(11) In a Planned or Command economy producers of goods and services

make decisions primarily based on

(a) Government planning-correct

(b) Past customs and production methods

(c) Current profit potential

(d) Market place signals

(12) A pure Market Economy would not have

(a) Entrepreneurs

(b) Government controls-correct

(c) Competition

(d) Private property

(13) The ability to produce greater quantities of goods and services better
and faster is

(a) Entrepreneurship

(b) Factors of Production

(c) Labour

(d) Productivity-correct

(14) It is easier to start your own business in a ?

(a) Command System

(b) Free Enterprise System-correct

(c) Controlled Economy

(d) Traditional Economy

(15) In a market economy, who decides when to exchange money for goods
and services?

(a) Government leaders

(b) Government advisors

(c) Individual citizens-correct

(d) Time honoured codes

(16) An environment where goods and services are exchanged is referred to

as a:

(a) Industry

(b) Market-correct

(c) Economy

(d) None of the above

(17) Which of the following causes the demand curve to shift to the left

(a) An increase in the population

(b) A decrease in income-correct

(c) A new fad

(d) A decrease in the price of a complementary good.

(18) An environment where goods and services are created, best describes
a/an:

(a) Market

(b) Industry-correct

(c) Equilibrium point

(d) Free enterprise economy

(19) Factors of production consist of which group of items?

(a) Land, Labour, Markets, Demand

(b) Capital, Labour, Markets, Supply

(c) Entrepreneurship, Labour, capital, Land-correct

(d) Land, Capital, Markets, Entrepreneurship

(20) The factor of production land includes which of the following groups?

(a) Rivers, lakes, forests, machinery

(b) Ponds, fertile soil, minerals & sunshine-correct

(c) Minerals, labour, forests, animals

(d) Buildings, rivers, bridges, oceans

(21) Which of the following is not a stakeholder in a business?

(a) Suppliers
(b) Shareholders

(c) Competitors-correct

(d) Managers

(22) Goods may be divided into two groups, namely:

(a) Single-use & Durables

(b) Commercial & Direct

(c) Consumer & Producer-correct

(d) Capital & Entrepreneur

(23) The returns paid out to shareholders by a company is called

(a) Salaries

(b) Dividends-correct

(c) Revenues

(d) Interest

(24) The exchange of goods and services between people and firms in
different countries is referred to as

(a) Globalization

(b) International trade-correct

(c) Invisible Trade

(d) Marketing
(25) An economic system in which citizens are allowed to own any factor of
production, business or industry is called a

(a) Planned Economic System

(b) Free Economic System-correct

(c) Mixed Economic System

(d) Controlled Economic System

(26) Citizens have no voting rights, all business, factors of production and
industries are owned by the government, religion and worship are
discouraged, citizens are not allowed to leave the country without the
permission of the government, education is compulsory…… The above
characteristics best describes

(a) Capitalism

(b) Communism-correct

(c) Racism

(d) Imperialism

(27) The four stages of production are:

(a) Primary, Manufacturing, Extractive, services.

(b) Tertiary, Constructive, Secondary, Primary.

(c) Primary, Secondary, Tertiary, Quaternary.-correct

(d) Extractive, Manufacturing, Constructive, services.

(28) A production Method in which a single unit of a good is produced from

start to finish, best describes?
(a) Flow Production

(b) Job Production-correct

(c) Small Scale Production

(d) Batch Production

(29) Which of the following is not a disadvantage of Small Scale Production?

(a) The Personal abilities of the owner affect the scale of the business

(b) The impact on the market will be limited because of the small scale of the
output

(c) They undertake special requests and deal with problems on the spot-
correct

(d) There is limited division of labour

(30) Which of the following is not an advantage of Large Scale Production?

(a) Production lines may run off standard products that may not meet
individual needs-correct

(b) They can afford to use technology

(c) Staff is able to specialize and become experts at their jobs

(d) Average cost of producing each unit of good is reduced

(31) Which of the following is not a way in which businesses expand?

(a) Takeover

(b) Mergers

(c) Divestment-correct

(d) Retained Profits

(32) Advantages enjoyed by firms specifically because of their size. This
best describes?

(a) Contribution

(b) Economies of scale-correct

(c) Ploughed back Profits

(d) Monopoly power

(33) To be considered a monopoly by law a firm must control at least

(a) 36% of the market

(b) 40% of the market-

(c) 50% of the market-correct

(d) 75% of the market

(34) Business mergers may fall into which group?

(a) Vertical, Horizontal and Conglomerate-correct

(b) Vertical, Horizontal and Diagonal

(c) Vertical, Lateral and Conglomerate

(d) Diagonal, Lateral and Horizontal

(35) The merging of two or more firms that are engaged in totally unrelated
business is a _____________ merger.

(a) Lateral
(b) Conglomerate-correct

(c) Horizontal

(d) Vertical

(36) A Non-profit private sector organization formed by members with

similarities of interest, formed to benefit them as a group is referred to as a

(a) Private Limited company

(b) Public Limited Company

(c) Co-operatives-correct

(d) Partnership

(37) Which of the following is not an actual Co-operative structure?

(a) Consumer Co-operative

(b) Producer C-operatives

(c) Retailer Co-operatives-correct

(d) Co-operative credit Union

(38) Diversification in a firm means:

(a) Selling shares to the public

(b) Creating and selling a wide variety of products-correct

(c) Merging

(d) Franchising

(39) What does the (S) in S.M.A.R.T. objectives represent?

(a) Salaries

(b) Spontaneous

(c) Shareholders

(d) None of the above-correct

(40) Which of the following is not a type of business objectives?

(a) Time bound-correct

(b) Strategic

(c) Tactical

(d) Functional

(41) A business organization that allows you to use their name, logo, slogan,
mode of operations and sell their products for a percentage of your sales
revenue is a

(a) Branch

(b) Franchise-correct

(c) Co-operative

(d) Authorized Dealer

(42) Economies of large scale production include all EXCEPT:

(a) Managerial economies of scale

(b) Cost-push economies of scale-correct

(c) Marketing economies of scale

(d) Research & Development economies of scale

(43) Dealing in stocks based on information not yet made publicly available
is known as:

(a) Marginalization

(b) Insider Trading-correct

(c) Brokerage

(d) Optimizing

(44) Taking over the ownership and control of an industry or business by the
government of a country is referred to as:

(a) Privatization

(b) Nationalization-correct

(c) Specialization

(d) Marginalization

(45) Optimization means to:

(a) Completing a specific task

(b) Achieving the highest levels

(c) Complete a task without wasting resources

(d) Maximize your resources-correct

(46) Objectives set by organization to be attained within a 5-10 year time

frame are referred to as

(a) Functional Objectives

(b) Tactical Objectives

(c) Strategic Objectives-correct

(d) SMART Objectives

(47) “A Financial Plan of Revenues and Expenditures for a specified period of

time. “ This best describes?

(a) Management

(b) A Budget-correct

(c) Planning as a function of Management

(d) None of the above

(48) The motivational theory surrounding the concept of “Hygiene Factors

and Motivators” was developed by

(a) Douglas McGregor

(b) Abraham Maslow

(c) Frederick Hertzberg-correct

(d) Thomas Madison

(49) Which of the following is not a form of Organizational Structure?

(a) Line Organization Structure

(b) Strategic Organizational Structure-correct

(c) Functional Organizational Structure

(d) Matrix Organizational Structure

(50) Making accurate predictions of future market trends and consumer

behavior is the Management function of
(a) Forecasting-correct

(b) Planning

(c) Organizing

(d) Controlling

(51) The leader is a dictator, he makes almost all and does not take
suggestions, recommendations or advice from his subordinates. This best
describes?

(a) Charismatic Leadership

(b) Democratic Leadership

(c) Laissez Faire Leadership

(d) Autocratic Leadership-correct

(52) Which of the following is not considered when locating an industry?

(a) The potential impact on the natural environment

(b) The functional Organizational structure-correct

(c) The availability of required for technology production

(d) Political stability

(53) A firm that creates and sells a wide variety of goods and/or services is
said to be

(a) highly Stable

(b) a cottage Industry

(c) highly diversified-correct

(d) a Co-operative

(54) Which of the following is not a type of Co-operative?

(a) Co-operative Credit Union

(b) Co-operative Action Plan-correct

(c) Consumer Co-operative

(d) Producer Co-operative

(55) At this stage of the Product Life Cycle, the marketer will introduce
“Extension Strategies”.

Introduction

Decline

Maturity-correct

Growth