POB EXAM: WEEK 1
1)John had just graduated from High School. John's father decided to retire
and transfer the ownership of his shoe store to him. After plaiting the business for
one' year, John decided to convert the business to a Partnership.
(a) Explain TWO advantages John's father enjoyed as a Sole Trader. (4marks)
(b) State TWO benefits John would enjoy by converting the business to a
Partnership. (2marks)
[TOTAL: 6MARKS]
2) Imagine you live in a small, isolated village where the concept of money does
not exist. Instead, the villagers rely on a barter system to exchange goods and
services. One day, you need some vegetables, but you only have handmade pottery
to offer in return.
(a) What is barter? (2marks)
(b) Explain TWO advantages of using a barter system in your village? (2marks)
(c) Explain TWO disadvantages of relying solely on barter for trade in your village?
(2marks)
(d) Explain ONE way in which the use of money can overcome the problems
associated with barter. (3marks)
[TOTAL: 9MARKS]
3) Match these business terms with their definitions.
[A] Market
[1] Physical or mental work of a person,
it also means the worker. This is another
name for human resource.
[B] Entrepreneur
[2] Money and other resources that are
used to start a business. Also, money
on machines used in everyday
operation in a business
[C] Capital
[3] A place where buyers and sellers
come together to exchange a good or
service
[D] Labour
[4] The person or group that buys goods
and services to satisfy their wants
[E] Consumer
[5] Someone who takes on the
adventure and risk of starting a new
business
[F] Loss
[6] The surplus that remains after costs
of production and other expenses are
deducted from total revenue
[7] Acost that produces no
benefit/revenue. Excess expenditure
over income.
[8] The focus or effort used on a
particular task leading to expertise in
the area
[G] Specialization
[H] Profit
[TOTAL: 8MARKS]
4) Money is considered a financial wonder since it solved many of the
problems associated with barter.
(a) List FOUR features of money? (4marks)
(b) List and explain FOUR functions of money? (8marks)
[TOTAL: 12MARKS]
5) Explain FOUR main functions of a business and give examples for 2 of the
4 listed.
[TOTAL: 8MARKS]
6) Distinguish between the private and public sectors and give THREE ways
they are different from each other.
[TOTAL: 7MARKS]
END OF EXAM
POB EXAM: WEEK 2
1) Match these business terms with their definitions.
[A] Electronic transfer
[1] For larger payments such as the
purchase of a car, the seller might want
extra security that he or she will receive
the money expected. The seller might
ask the person making the payment to
pay with a bank draft. This ls a cheque
made ou1 by the bank and drawn from
the bank's 1unds. The bank's customer
will either have these funds taken from
his or her account.
[B] Cheques
[2] A written instruction to a bank to
make a payment on behalf of a bank
account holder, called the drawer. The
drawer writes an Instruction to his or her
bank, which is termed the drawee.
[C] Credit Card
[3] This is a way to send funds from one
bank account to another anywhere in
the world.
[D] Bank draft
[4] Involves the use of a cell phone to
transfer money between bank accounts,
as well as to make deposits In a bank,
withdraw funds from an account or pay
bills. A cell phone can be used to make
payments.
[E] Bank Transfers
[5] The process of buying and selling,
usually through a website. Buyers order
goods and provide their bank details
online. setting out how much Is to be
paid, from which account and which
bank card (usually a credit card) and
where the goods are to be delivered.
Amazon and eBay are examples of this.
[F] Money Order
[6] A written order by one party in an
exchange (the drawer) to another (the
drawee) to pay a given sum of money
on the date set out in the order, in
payment for goods received.
[G] E-commerce
[7] These are supplied by a finance
company, which is an offshoot of a
bank. The instrument enables the
drawer to make payments to a payee
using the card. The account holder is
given a period before they must pay off
the balance on the instrument.
[H] Mobile Money
[8] A form of payment for a pre-specified
sum of money.
[TOTAL: 8MARKS]
2) Answer these multiple-choice questions based on business structures/
organizations.
(a) Which sector of economy is run by the government?
o Private sector
o Public sector
o Third sector
(b) How do public sector organisations raise finance?
o Bank loans
o Retained profit
o Taxation
(c) Which of the following is a disadvantage of being a sole trader?
o Unlimited liability
o Limited liability
o Dividends
(d) What are the minimum and maximum number of partners allowed in a
partnership?
o 1-50
o 2-25
o 2-20
(e) What does limited liability mean?
o A shareholder only receives a limited share of the profits
o A shareholder is liable for all debts
o A shareholder is only liable for their equity invested
(f) What kind of business is BEST described by these statements? "I am the only
owner of my business. I take all the risks of doing business. I keep all the profits."
o
o
o
o
Sole proprietorship
Solo partnership
Partnership
Cooperative
(g) In a sole proprietorship and partnership, owner(s) share profit, but liability is
limited to______ and they are known to be __________.
o
o
o
o
Investment, unincorporated
Distribution, unincorporated
Production, unincorporated
Theft, unincorporated
(h) What is a disadvantage of partnerships?
o
o
o
o
Ease of formation
Owners share responsibilities
Limited liability
Possibility of personality conflict
(i) What is the advantage of corporations?
o
o
o
o
Minimal government regulation
Limited liability
Short life span
It has one owner
[TOTAL: 9MARKS]
(3) Read the following case study and answer the questions which follow.
CASE STUDY
CASE: Ronnie's Trucking and Haulage
Thirty-seven-year-old Ronnie Redbress worked as a production supervisor for a
large multi-national company in the industrial town of Malbook.
Recently, the company reorganized, and the post of production supervisor was
made redundant. This would create tremendous hardship for his family of four.
The company, however, provided tremendous support for Ronnie and fellow
employees by paying for their market research into the business of their choice.
The firm was also willing to pay for their training and legal requirements to start
their own business, plus provide an interest free loan of up to $1,500,000 for
twenty-four months.
Having conducted research into his target market, Ronnie Redbress decided to
go into haulage and trucking. The research indicated the price per load charged
by other trucking firms and the specifications of different tractors and trailers with
respect to fuel consumption and servicing periods. Other operating costs to
Ronnie would include road tax, vehicle and goods in transit insurance, his wage,
plus the wages of three other employees.
Ronnie found out that he would need additional training if he was to comply with
legal restrictions on road transport.
There were already three large established trucking businesses. However, many
clients were dissatisfied with their performance as they were very unreliable.
While there would be slow periods, there was great demand for a wide range of
loading and unloading arrangements which influenced the type of vehicle he
would buy to suit the target market.
Along with a sizable amount for his redundancy, Ronnie was able to secure the
maximum amount as an interest free loan from his former employers. He also
received a two-year contract to truck goods for the company. Although he could
have started out as a partnership with a few of his co-workers, Ronnie chose to
go into a private limited company with his family. His wife had management and
secretarial training skills and in two years both his sons would graduate with
accounting and human resource development training.
Ronnie was also encouraged to advertise in the local newspaper. However, he
had his sights on the internet and world wide web. He was also concerned that
recently, the trucking business was coming under criticism and scrutiny from the
government. Many haulage firms were aiding contractors in illegal quarrying and
removal of sand from river basins as well as illegal dumping of waste.
Despite these concerns Ronnie Redbress was anxious to start business within
three months of being redundant.
(a) Define the following:
(i)
Public Limited Company
(ii)
(iii)
(iv)
(v)
Franchises
Cooperation
Partnership
Private Limited Company
(5marks)
(b) State TWO advantages of a private limited company over a partnership.
(4marks)
(c) State TWO advantages of a small business like Ronnie's over large firms in
the same industry. (4marks)
(d) Identify TWO government regulations which Ronnie must satisfy in order to
start his business operations. (4marks)
(e) Explain ONE difference between a private limited company and a public
limited company. (3marks)
(f) Outline TWO benefits that a sole trader would enjoy by converting his
business to a private limited company. (4marks)
[TOTAL: 24MARKS]
(4) Name the four economic systems, give their characteristics and list two
advantages and disadvantages of each.
[TOTAL: 20MARKS]
SHORT ECONOMICS SECTION
(1) What is the study of economics? (1mark)
(2) What is the economic term for people having unlimited wants, but limited
resources? (1mark)
(3) What is opportunity cost giving an example. (3marks)
(4) Draw a production possibility frontier labelling the different points along the
curve. Using this diagram explain what can cause the PPF to shift.
(15marks)
[TOTAL: 20MARKS]