Principles of Business Multiple Choice Past Papers Text

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1 the first question is a compulsory 10 marks question, taken from may ­ june 2002 past paper general. 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 before reading the discussion and guidelines to answering the question, you may wish to plan an answer that you would give to the question.

discussion and guidelines a any two types of economic systems can be listed, for example, the free economic system and the planned economic system. 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. Setting up of government agencies such as the bureau of standards to monitor the quality of goods produced and imported. 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 i co operative 4 marks c state two advantages which the public limited company has over the partnership type of business.

4 marks discussion and guideline answer a any two functions of a business can be listed e.g.to sell goods and services to satisfy peoples wants and to provide employment for people. B the two types of businesses can be described by defining them and /or outlining their features or characteristics. 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.

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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. 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. I will offer for sale on the date and at the place mentioned above the following vehicle: one l9 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. Tom phillip became furious, threatened to sue for breach of contract and demanded a refund of his traveling expenses a define the term contract. 2 marks b i by attending the public auction sale, did tom phillip accept a firm offer? 1 mark ii give one reason for your answer in b i above 2marks c what do you understand by vehicle will be sold as is where is? 2 marks d i define the term breach of contract. E state two ways by which a contract can be terminated or discharged 4 marks f i should john brown refund tom phillips traveling expenses? 1mark ii give one reason for your answer to f i above. 2 marks g i advise tom phillip whether he will succeed in court against john brown. 2 marks discussion and guideline answer a you must be careful to define a contract, and not an agreement. A contract is defined as a legally binding agreement or an agreement that is created with legal intentions.

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If you state that a contract is an agreement without stating any legal aspect, you may only score half of the marks, since all contracts are agreements, but not all agreements are contracts. Ii the vehicle was not offered for sale, therefore, one cannot accept an offer that was not made. C this means that the vehicle is to be sold in the condition that it is presently in at the place or physical locality that it is at. D i breach of contract means that a party or parties to the contract fail to keep their part or parts to the contract. Ii the court can rule that the party that has breached the contract be forced to abide by their side of the contract. Or, with the injured parties agreement, the existing contract can be terminated and a new one can come into existence that satisfies all parties.

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E there are a number of ways in which a contract can be discharged or terminated. Some ways are suggested below: by death of either party to the contract by bankruptcy, which must be proven in the legal sense. By frustration, which means that something, which was possible at the time the contract was made, now becomes impossible. However, in this case the contract can only be terminated with the permission of the injured party. This is when something that was legal at the time the contract was made now becomes illegal by law.

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