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Form 4 Business Studies paper 1 questions and answers model test paper 3

Highlight four circumstances that can lead to creation of a monopoly

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Explanation/Answer Text:

-Where heavy/high initial capital is required and other firms cannot afford
-When a firm is in control of an important input in production
-Where different firms combine to form one firm
-Where the market is small and can only be served by one firm economically
-Where one firm can operate at low cost that other firms cannot survive
-Where a firm is enjoying economies of scale not enjoyed by the other firms

Questions/Lessons List

1. Give reasons why it is difficult to satisfy human wants. ( free lesson)

2. Highlight four advantages of using pipeline as a means of transport ( free lesson)

3. Highlight four factors that may influence an investor to locate his factory in rural areas ( free lesson)

4. Outline four factors that hinder economic integration. ( free lesson)

5. In each of the following cases, state the type of inflation described a)A rise in prices due to an increase in money supply b)A rise in prices due to an increase in the prices of factors of production c)A rise in price due to buying expensive goods from foreign countries d)A rise from decisions by firms to increase their profit margins by increasing prices of their products. ( free lesson)

6. State four ways in which consumers are likely to suffer in a situation where there is no warehouse ( free lesson)

7. Outline four differences between a debit note and a credit note as a business documents. ( free lesson)

8. Highlight four advantages of sending parcels by courier services ( free lesson)

9. Outline four means used by commercial banks to transfer money. ( free lesson)

10. State four factors that limit the efficiency of co-operatives in delivering services to their members ( free lesson)

11. Give four malpractices against which consumers may need protection. ( free lesson)

12. Nzundu and Hurry bought a building for sh. 12,000,000. Nzundu paid 8,000,000 while hurry paid 4,000,000. The building was insured for 8,000,000 against the rsk of fire. Later the building was partially destroyed by fire to a tune of sh. 6,000,000 a) State the amount of compensation likely to be paid by the insurance company b) Calculate the amount of compensation that each one will receive based ( free lesson)

13. Outline four factors that can accelerate economic development in a country ( free lesson)

14. Outline Four circumstances under which gaps in the market may be identified ( free lesson)

15. Identify four reasons why most countries are getting rid of direct production ( free lesson)

16. Kamau,a manufacturer, exhibited his goods in a local trade show. However, his sales did not increase significantly. Outline four reasons that may have led to lack of significant sales increase. ( free lesson)

17. The demand for commodity X doubled in six months though the price of the commodity remained the same over the same period. Outline four factors that may have contributed to the increase. ( free lesson)

18. Outline four reasons why it is important for the government to undertake taxation ( free lesson)

19. The following are daybooks used in recording business transactions. State the relevant source document used to record information in each of the daybooks a)sales journal b)Cash receipt journal c)Purchases return journal d)Cash payment journal ( free lesson)

20. Highlight four ways in which an office manager can ensure that the company’s property is safeguarded. ( free lesson)

21. The following information relates to benja retail shop as at 31st December,2006 Opening stock sh.80,000 Closing stock sh.100,000 Sales sh. 325,000 Rate of stock turnover 3 times Calculate : i) The cost of goods sold ii)The gross profit ( free lesson)

22. Highlight four circumstances that can lead to creation of a monopoly ( free lesson)

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