ZERAKI ACHIEVERS’ EXAMINATIONS (2022)
Term 2 - 2022
BUSINESS STUDIES
FORM TWO (2)
Time: 2 Hours
Marking Scheme
ANSWER ALL QUESTIONS IN THIS PAPER
1. Economic factors influencing business operation (4 marks)
(a) Consumer level of income
(b) Inflation rate
(c) Taxation rate
(d) Bank rate
2. List four personal attributes of an office staff. (4marks)
● Office etiquette
● Good posture
● Hygiene
● Good health
3. Highlight four limitations of the methods used by the consumer to protect themselves against
exploitation. (4 marks)
● Consumers ignorance of their rights
● Lack of education to consumers about how they are exploited
● Lack of consumers associations
● Lack of funds to finance their actions
● Lack of government support
● The consumers may not be able to determine the quality of goods
● High levels of illiteracy
4. Outline four benefits of bonded warehouses to the government. (4 marks)
● Generates revenue to the government in terms of custom duty
● Enable government to collect tax dues
● Enables verification of goods entering the country
● Control entry of harmful goods\
● Regulate and control entry of harmful goods
5. Give the name of the insurance policy described in the following table. (4marks)
DESCRIPTION NAME OF THE POLICY
Covers ships while on a specified voyage and time Voyage policy
Covers a specified peril when the ship is either being loaded, Port policy
offloaded or serviced
Covers cargo against loss or damage while being transported Marine cargo policy
by ship
One policy used to cover a number of ships belonging to one Fleet policy
organization
6. Currently the government is selling state owned businesses to private investors. Highlight
four benefits of such decisions. (4marks )
● Increases the level of efficiency
● Saves taxpayers money
● Improves level of service quality
● Allows policy making and progress
7. State four essentials of effective communication. (4marks)
● The sender
● The message
● Medium
● Recipient
● Feedback
8. Identify the level of production described by each of the following information (4marks)
DESCRIPTION LEVEL OF OCCUPATION
A boy chasing hare for meat Primary
CIC insurance company selling their policies Tertiary
Carpenter making chairs for form ones Secondary
Mr. Juma counseling form four students Tertiary
9. Farmers in VOI transport their herds of cattle to Kenya meat commission (KMC) in
Nairobi by train. Highlight FOUR advantages of train over road transport. (4marks)
● Animals are bulky and a train is more suited for that.\
● Railway transport is more comfortable for animals since no bumps or potholes
● Special wagons can be provided which can help animals to feed as they are being
transported
● Railway transport provide suitable loading and off loading
● It is cheaper in terms of cost
● Companies like KMC have branch line serving them from the main line hence convenient
● Carries a lot of animals at a time
● Modern transport is faster than road
● Few accident due to fixed timetables
10. State FOUR reasons why choice should be made in satisfying human wants. (4 marks)
● Because the resources available for satisfying wants are limited.
● Because human wants vary in urgency and intensity.
● Because there is variation in tastes and preferences of human wants.
● They are too many.
● They are competitive.
11. Highlight four importance of business studies to a society. (4marks)
• Equips the individual with skills and knowledge to manage a business.
• Prepares one for future career in business/employment
• Enables one to relate issues affecting business
• Enables one to relate business activities taking place globally
• Enables one to identify business opportunities to venture into.
• Enables the individual to think ethically and male sound judgments in day to day
activities.
• Makes an individuals to appreciate the role of government in business.
• Make individuals disciplined and have positive attitudes towards work.
12. Highlight four circumstances under which sign language can be used to communicate.
(4marks)
● Where one is communicating to a deaf person
● In case of a very noisy environment.( other means won’t be effective)
● In case of a place where total silence is required
● Where information is very confidential e.g police communication
● Where parties communicating do not share a common verbal communication
13. Highlight four reasons why the government is involved in trading activity. (4marks)
● When there is requirement of very large capital to start the business
● To attract foreign capital
● To provide essential services which would be deemed unprofitable to private entities
● To prevent exploitation by monopolies and cartels
● To generate income/revenues
● To compete with private entities
● To stimulate economic development
14. State four benefits of using computers in an office. (4marks)
● Economise on space and materials
● Speeds up on operations
● Output is presentable
● Its accurate
● Facilitate communication from one point to another
● Stores large volumes of information and data.
15. Highlight four contributions of entrepreneurs to the growth of the economy. (4marks)
● Creating employment
● Make use of locally available resources which would be idle
● Improves the standards of living by providing a variety
● Savings on imports
● Promote technology through innovations
● Formation of capital
● Promote development of infrastructure
● Reduces rural urban migration\
● Promote entrepreneurial culture
16. State and explain five circumstances that a producer may prefer to directly to a consumer.
(10marks)
● Incase of technical goods; may require demonstration or installation
● Tailor made goods ; incase the goods are made as per the specifications of the buyer
● If the market is centralized in one area; customers have direct contact with the producer
● Where there is stiff competition; need to outdo competitors
● Where consumers opt to buy directly from producers
● Incase he/she have own retail outlets
● Incase of a very expensive product
● Where the producer want to maximize profits
● Where the product is very perishable
17. With the aid of a table give five differences between life assurance and general insurance
policies . (10marks}
LIFE ASSURANCE GENERAL INSUARANCE
Taken to cover life Taken to cover properties
Principle of indemnity does not apply Principles of indemnity applies
It has a surrender value It does not have a surrender value
Does not have annual renewals Have annual renewals
Occurrence of event is certain Occurrence of event of loss is very uncertain
It has a maturity date It does not have a maturity date
It’s a kind of saving plan It is not a saving plan in any way
Principle of contribution does not apply Principle of contribution applies
It’s a long term policy It’s a short time policy
18. Factors that a firm may consider when choosing a means of transports.
● Cost; choose the means which has the most reasonable cost / most cost efficient\
● Distance some means are suitable for long distances while others for short distance.
therefore the means should be chosen appropriately .
● Flexibility; choose the one to make you arrive at a time and place of convenience
● Availability; readily available means should be used
● Urgency; fastest available mean of transport should be chosen
● Security and safety of the mean ; one should choose the mean that provide safety and
security of good being transported
● Durability of the good; perishable goods require a fast mean of transport\
● Value of goods ; highly valued goods e.g. gold requires a fast secure means of transport
● Availability of terminals ;places of loading and offloading
19. Sources of finance for public limited company.(10 marks)
● Borrowing from financial institution, loans over drafts and mortgages
● Trade credit …buying stock/goods for resale on credit so as to pay later
● Hire purchase …. Paying in installment bases
● Debentures; borrowing from the members of public in which fixed interest is paid at a
predetermined period
● Retained profits; profits not shared out as dividends but ploughed back to business
● Sales and leasebacks; selling some assets and hiring it back for a specific time
● Use of reserves/provisions ; making use of funds set aside for depression ,tax and bad
debts to finance day to day operations
● Sale of shares either in the primary market or secondary market
