CXC PAST QUESTIONS AND ANSWERS –
PRINCIPLES OF BUSINESS
May 17, 2011 at 1:00 pm (P.O.B Lessons)
1) The first question is a compulsory 10 marks question, taken from
May June 2002 past paper (General). Question
1. It involves Economic Systems and Government Control of Business
Activity.
(a) List TWO types of economic systems. (2mks)
(b) Explain the differences between the types of economic systems listed
in (a) above. (4mks)
(c) Suggest two ways by which the government of your country can
control business activity. (4mks)
Total 10 marks
Before reading the discussion and guidelines to answering the question,
you may wish to plan an answer that you would give to the question.
Remember, there may be other possible answers than the ones
suggested.
DISCUSSION AND GUIDELINES
(a) Any two types of economic systems can be listed, for example, the
free economic system and the planned economic system. This part of the
question does not require any expansion or explanation.
,(b) The characteristics or features of the economic systems listed can be
used to show the differences between them.
Conjunctions such as whereas, on the other hand, while and however
should be used to indicate your reference to the opposite feature for the
other economic system. For example, in the free economy, most of the
scarce resources are owned and allocated by private individuals and
firms while in the planned economy, scarce resources are owned and
allocated by the government.
The marks allotted for this part of the question would indicate that a
minimum of two differences is required.
(c) Governments’ control of business activity can come in many forms
including:
* Legislation The passing of laws that businesses should abide by.
* Price controls Government stated maximum prices for selected goods
and services
* Nationalisation Direct ownership and control of industries by the
Government, for example, where monopolies are exploiting consumers.
* Increased taxation To reduce monopoly profits.
Registration and other legal requirements for setting up of businesses.
* Employment of inspectors to monitor the affairs of businesses e.g.
price inspectors and sanitary inspectors.
* Setting up of government agencies such as The Bureau of Standards to
monitor the quality of goods produced and imported.
Remember, you are asked to suggest only two ways.
2) Now let’s move on to another question. CXC past paper
May/June 2003 (General), Question 1.
,(a) List TWO functions of a business. (2 marks)
(b) Briefly describe TWO of the following types of business
organisations:
(i) Partnership
(ii) Public Limited Company
(iii) Co-operative (4 marks)
(c) State TWO advantages which the Public Limited Company has over
the Partnership type of business. (4 marks)
Total 10 marks.
DISCUSSION AND GUIDELINE ANSWER
(a) Any TWO functions of a business can be listed e.g.to sell goods and
services to satisfy people’s wants and to provide employment for people.
Expansion on and explanation of the functions is not required.
(b) The TWO types of businesses can be described by defining them and
/or outlining their features or characteristics. For e.g. in describing the
partnership one might say that a partnership is formed with two to 20
members who pool their resources together to run a business with a view
to making a profit.
Partnerships are normally required to sign a Deed of Partnership and
register with the Registrar of Companies.
(c) The advantages which the Public Limited Company has over the
Partnership type of business includes the fact that:
* A larger number of part owners, since the Public Limited Company
has a minimum of seven shareholders and no maximum.
* More capital can be raised than in a partnership since an appeal can be
made to the general public through the Stock Exchange.
, * The Public Limited Company is a separate entity from the shareholder
owners, therefore, the individual shareholders cannot be sued, the
company must be sued.
* The Public Limited Company has a Board of Directors elected by the
shareholders.
* These companies may enjoy economies of scale.
* Risk is spread over many shareholders.
Remember, you are asked to state only TWO advantages of the Public
Limited Company over the Partnership.
3) CXC past paper May/June 2003 (General) Question 5.
The following information appeared in a daily newspaper.
Property Services, No. 56 Newpark Saletown
Public Auction Sale
On January 25, 2002 at 10:00 a.m.
I will offer for sale on the date and at the place mentioned above the
following vehicle: One l999 Toyota Mini Bus
Terms of Sale:
• Strictly cash on the fall of the hammer.
• Vehicle on view on the morning of the sale.
• Vehicle will be sold as is where is.
- John Brown, Auctioneer.
Tom Phillip who lived 20 miles away, drove to the address on the date
specified with the intention of purchasing the minibus.
On arrival, he was told by the auctioneer that the minibus was no longer
available and was removed from the items to be auctioned.
PRINCIPLES OF BUSINESS
May 17, 2011 at 1:00 pm (P.O.B Lessons)
1) The first question is a compulsory 10 marks question, taken from
May June 2002 past paper (General). Question
1. It involves Economic Systems and Government Control of Business
Activity.
(a) List TWO types of economic systems. (2mks)
(b) Explain the differences between the types of economic systems listed
in (a) above. (4mks)
(c) Suggest two ways by which the government of your country can
control business activity. (4mks)
Total 10 marks
Before reading the discussion and guidelines to answering the question,
you may wish to plan an answer that you would give to the question.
Remember, there may be other possible answers than the ones
suggested.
DISCUSSION AND GUIDELINES
(a) Any two types of economic systems can be listed, for example, the
free economic system and the planned economic system. This part of the
question does not require any expansion or explanation.
,(b) The characteristics or features of the economic systems listed can be
used to show the differences between them.
Conjunctions such as whereas, on the other hand, while and however
should be used to indicate your reference to the opposite feature for the
other economic system. For example, in the free economy, most of the
scarce resources are owned and allocated by private individuals and
firms while in the planned economy, scarce resources are owned and
allocated by the government.
The marks allotted for this part of the question would indicate that a
minimum of two differences is required.
(c) Governments’ control of business activity can come in many forms
including:
* Legislation The passing of laws that businesses should abide by.
* Price controls Government stated maximum prices for selected goods
and services
* Nationalisation Direct ownership and control of industries by the
Government, for example, where monopolies are exploiting consumers.
* Increased taxation To reduce monopoly profits.
Registration and other legal requirements for setting up of businesses.
* Employment of inspectors to monitor the affairs of businesses e.g.
price inspectors and sanitary inspectors.
* Setting up of government agencies such as The Bureau of Standards to
monitor the quality of goods produced and imported.
Remember, you are asked to suggest only two ways.
2) Now let’s move on to another question. CXC past paper
May/June 2003 (General), Question 1.
,(a) List TWO functions of a business. (2 marks)
(b) Briefly describe TWO of the following types of business
organisations:
(i) Partnership
(ii) Public Limited Company
(iii) Co-operative (4 marks)
(c) State TWO advantages which the Public Limited Company has over
the Partnership type of business. (4 marks)
Total 10 marks.
DISCUSSION AND GUIDELINE ANSWER
(a) Any TWO functions of a business can be listed e.g.to sell goods and
services to satisfy people’s wants and to provide employment for people.
Expansion on and explanation of the functions is not required.
(b) The TWO types of businesses can be described by defining them and
/or outlining their features or characteristics. For e.g. in describing the
partnership one might say that a partnership is formed with two to 20
members who pool their resources together to run a business with a view
to making a profit.
Partnerships are normally required to sign a Deed of Partnership and
register with the Registrar of Companies.
(c) The advantages which the Public Limited Company has over the
Partnership type of business includes the fact that:
* A larger number of part owners, since the Public Limited Company
has a minimum of seven shareholders and no maximum.
* More capital can be raised than in a partnership since an appeal can be
made to the general public through the Stock Exchange.
, * The Public Limited Company is a separate entity from the shareholder
owners, therefore, the individual shareholders cannot be sued, the
company must be sued.
* The Public Limited Company has a Board of Directors elected by the
shareholders.
* These companies may enjoy economies of scale.
* Risk is spread over many shareholders.
Remember, you are asked to state only TWO advantages of the Public
Limited Company over the Partnership.
3) CXC past paper May/June 2003 (General) Question 5.
The following information appeared in a daily newspaper.
Property Services, No. 56 Newpark Saletown
Public Auction Sale
On January 25, 2002 at 10:00 a.m.
I will offer for sale on the date and at the place mentioned above the
following vehicle: One l999 Toyota Mini Bus
Terms of Sale:
• Strictly cash on the fall of the hammer.
• Vehicle on view on the morning of the sale.
• Vehicle will be sold as is where is.
- John Brown, Auctioneer.
Tom Phillip who lived 20 miles away, drove to the address on the date
specified with the intention of purchasing the minibus.
On arrival, he was told by the auctioneer that the minibus was no longer
available and was removed from the items to be auctioned.
