MIGORI SUB COUNTY JOINT EVALUATION EXAM
BUSINESS STUDIES 565/2
MARKING SCHEME-2014
1. a. Ways through which the government can regulate business activities
- issuing ,denial or cancellation of trade licenses
- enacting legislation or repealing of regulations
- formulating policies
- offering incentives to influence location of a business
- taxation and subsidies to encourage or discourage use of certain products
- creation of parastatals for competition
- issuing directives
- price controls
b. Factors affecting birth rate
- Marriage –The higher the number of marriages the higher the number of births
- Ignorance –Leads to large families which in turn leads to higher birth rates
- Government policies –That favour large families e.g providing free primarily education
- Cultural factors –Children being considered as wealth
- Fertility –High fertilities lead to higher birth rates.
2. a. Differences between private and public warehouses
Public warehouse
Private warehouse
- Owned by businesses for purposes of renting
- Owned by individual to store their own
space
goods
- Usually large in size
- Usually small in size
- Insurance is a must
- Insurance is optional
- Goods leave with restriction /release warrant
- Goods leave freely without restrictions
b.Ways of controlling demand pull inflation
- Decrease in public expenditure
- Decrease in wage earnings
- Increase in public borrowing to finance the production of goods and services in the country
- Increase income taxation to reduce disposable income
- Offer subsidies to firms to increase production
- Use of buffer stocks to sustain supply of goods during times of shortage
- Producing commodities that are in short supply
3. a. Benefits of suing relatives in a chain of distribution
- Bulk breaking
- Accumulation of bulk
- Storage
- Transport
- Product promotion
- Financing
- Risk taking
b. Gross profit = 40 x 220,000= 108,000
100
ii..Cost of goods sold =sales –Gross profit
270,000-108,000
= 162,000
iii.Net profit = Gross profit – expenses
108,000- 40,000
= 68,000
i.
Average stock = opening stock + closing stock
2
6=
6= cost of sales
Average stock i.e. x
162,000 = 6x =162,000
X average stock x = 27,000
4. a. Reasons for holding money for precaution motives
- level of income –The higher the income the more the money one is likely to hold
- family status –High class families tend to hold more money
- age of an individual –Aged people have more uncertainties
- number of dependants
- individuals temperament –Optimistic/pessimistic
- duration between receipts of income
b. Identifying viable business opportunities
-
organizes production/organizing factors of production once a viable business has been established ,the
entrepreneur then provides guideline on how production should take place
- acquires all the factors of production and bring them to an organization/comes up with new production
process( innovation/invention)
- entrepreneur takes the risk in production e.g. fall in demand of his products in the market
- he is the policy makes /decision maker and decodes what to be produced and how it is to be produced
5. a. Trends in business units
- franchising –This is where one business grants another the rights to manufacture, distribute or provide
branded products using the name of the business that granted the right
- holding companies – Is accompany is one that acquires 51 percent or more shares in one are more other
companies
- privatization-its changing
- stabilization –The process of businesses conducting their activities in different parts of the world
- cartels –Is a group of related companies that agree to work together in order to control output
purchases journals
Date
2/2/012
18/2/012
Details
Jim traders
Awendo traders
Invoice No
24
25
F
Amount
340,000
120,000
460,000
Invoice No
29
28
F
Amount
620,000
800,000
1,420,000
Invoice No
10
11
F
Amount
10,000
5,000
15,000
Invoice No
50
306
F
Amount
30,000
8,000
38,000
Sales journals
Date
10/2/012
3/2/012
Details
Sala wholesalers
Maua traders
RI journals
Date
15/2/012
20/2/012
Details
Sala traders
Maua traders
R.O Journals
Date
4/2/012
25/2/012
Details
Jim traders
Awendo traders
General Journals
Date
13/2/012
6.
-
Details
Moto vehicle A/C
C/MC motors A/C
Being purchased of motor vehicles on
credit from CMC motors
DR
1,000,000
a. Roles of national income statistics
Indicators of standard of living
Comparing standards of living in different countries
Assessing the performance of the economy over time
Assisting the government to plan the economy
Investment decision
b. Role played World Bank in assisting developing countries
Providing finance to reduce budget defraits
Providing loans for development projects guaranteeing loans
Providing finance to correct adverse balance of payment
Providing technical advice/expertise to support development
By writing off debts
Providing grants for development projects
Carry out projects
Ensuring finances are put into good use of accountability
CR
1,000,000