BST F2 MS 1

https://elimucentre.co.
ke/ +254705738367 FOR MARKING SCHEMES
FORM TWO END TERM 3 2022 BUSINESS MARKING SCHEME

1.. For each of the following goods, identify the appropriate class that they belong to.
(4
marks)
Goods Classification
Road Public goods
Sisal Intermediate goods
Bread Consumer goods
Tractor Capital goods
2.. Outline four ways in which the legal political environment can influence the activities of
a business. (4 marks)
- To start a business one must obtain a trading license.

- Taxes are imposed by government on the activities of a business.
- Government offers subsidies to producers.
- The law requires that goods sold must meet certain specified standards.
- Political stability creates a conducive environment for business to thrive.
3.. Outline four characteristics of landscape office layout.
- Large floor area occupied by all officers.

- Various departments operate in demarcated areas.
- Use of decorations, pated plants, furniture for demarcation enhances the office
outlook.
- Senior officers mainly operate from raised grounds for easy supervision.
4.. Differentiate between a tied shop and a single shop. (4 marks)
Tied shop Single shop

- Sells products of a particular manufacturer - Sells goods from different manufacturers
- Have same outward appearance - One has outward appearance from another
- Sells one line of goods - Sells a variety of goods.
- Sells goods at same price as the other tied - Sells goods at different prizes depending on
shops in different towns demand and location of the shop.
- Product promotion done by the manufacturer - Done by the particular shop.
5. Highlight four duties of consumer associations towards consumer protection.

(4
marks)
- Educating their members on their rights e.g. checking expiry dates before buying.
https://elimucentre.co.ke/ +254705738367 FOR MARKING SCHEMES
- Receiving complaints from consumers and acting on them.
- Reporting all cases of non-compliance with quality and other standards.
- Boycotting the products of traders who are exploitative.
- Demonstrating against consumer exploitation by traders.
- Forming vigilante groups to serve as watchdogs.
6. Highlight four circumstances under which railway transport may be appropriate as a

means of transport.
- When the commodities being transported are bulky or heavy.

- When transporting goods that require special facilities e.g. cattle. Rail, special
wagons enable animals to feed as they are being transported.
- If the distance to be covered is great.
- If there is need to cut down on transport cost because it is cheap
- If the volume of goods being transported is great. Rail transport can carry many
goods at once.
- Where shunting facilities are available.
7. Outline four circumstances under which communication would become ineffective.

(4
marks)
- Language barrier - Emotional responses
- Poor listening - Unclear systems within the organization
- Negative attitude - Noise
- Poor timing - Unfamiliar non-verbal signals
- Wrong medium - Prejudgement
8. Mention four benefits of warehousing to the consumers. (4 marks)
- Ensures steady supply of goods hence no shortage

- Steady supply leads to stable prices.
- Some goods improve in quality while in the warehouse e.g. wine.
- Can have the opportunity to inspect goods before buying.
- Goods are prepared for sale while in a warehouse/breaking bulk
9. Mr. Ndumia insured his lorry whose value was shs.1,000,000 for shillings 600,000
against the risk of fire outbreak. While on transit, there was a mechanical problem and
the lorry caught fire and was burnt causing a loss of shs.500,000. Calculate the
compensation amount. (4 marks)
Compensation = Sum insured x Actual loss

Value of property
Compensation = 600,000 x 500,000

1,000,000
= 300,000
NB: 300,000 is the compensation amount.
Reason: The lorry had been under insured.

10. For each of the following descriptions, identify the corresponding method of product
promotion. (4 marks)
DESCRIPTION METHOD OF PROMOTION

Free promotion of a product Free publicity
Strategies to increase sales at the point of Personal selling
promotion.
Impersonal presentation of a product Advertising
through the mass media
Meant to improve the reputation of a firm Public relations
11. Outline four ways in which a good business structure is of benefit to a business
organization(4mks)
(a) Facilitates easy control of workers
(b) Facilitates easy evaluation of workers
(c) Reduces confusion among workers
(d) Enhances teamwork (4x1=4mks)
12. Outline four difficulties that would be faced by an individual in the satisfaction of human
wants
(4mks)
(a) Needs are unlimited
(b) Different tastes and preferences
(c) Government restrictions
(d) Different prices of goods
(e) Limited resources/income (4x1=4mks
13. State four circumstances under which it may be appropriate to use personal selling as a
form of product promotion
(4mks)
(a) Its not easy to ignore like other methods
(b) Its more persuasive
(c) Immediate feed back about the product is got
(d) Seller is able to direct effort to a specific group
(e) Consumers are shown how to use a product
(f) Demonstration can be done
(g) Suitable for both the literate and illiterate (4x1=4mks)
14. State four functions of commercial attaches

(4mks)
(a) Look for market for Kenyan goods abroad
(b) Organize trade tours for Kenyan traders

(c) Inform local producers of standards required and procedures in foreign countries
(d) Help in identifying agents in foreign countries for local producers
(e) Organize training for local businessmen abroad
(f) Avail information about selling opportunities in foreign countries (4x1=4mks)
15. Give four reasons why some traders prefer to operate supermarket business
(4mks)
(a) Increase sales
(b) Lower operational costs
(c) Enjoy economies of sale
(d) Time is saved
16. State four reasons why short message service (SMS) is replacing letters as a way of
communication
(4mks)
(a) Cheap to use SMS services
(b) Faster than letters
(c) Can be sent to many at once
(d) Realiable-delivery reports are given (4x1=4mks)
17. State four circumstances under which a clerk may be employed to work in organization
(4mks)
(a) Where there is need to operate various office equipments
(b) When there is need to index and file
(c) Need for store keeping
(d) Need of ordering, receiving and issuing stationary
(e) Need to handle mail (4x1=4mks)
18. Give four benefits that are likely to result form a modern railway network in the country
(4mks)
(a) Effective in transporting heavy and bulky goods
(b) Reduce damage of roads by vehicles
(c) Commodities will be transported cheaply over long distance
(d) Road and port congestion will reduce
(e) Pollution along the roads will reduce

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https://elimucentre.co.

ke/ +254705738367 FOR MARKING SCHEMES

FORM TWO END TERM 3 2022 BUSINESS MARKING SCHEME

- To start a business one must obtain a trading license.

3.. Outline four characteristics of landscape office layout.

- Large floor area occupied by all officers.

4.. Differentiate between a tied shop and a single shop. (4 marks)

Tied shop Single shop

5. Highlight four duties of consumer associations towards consumer protection.

6. Highlight four circumstances under which railway transport may be appropriate as a

- When the commodities being transported are bulky or heavy.

7. Outline four circumstances under which communication would become ineffective.

8. Mention four benefits of warehousing to the consumers. (4 marks)

- Ensures steady supply of goods hence no shortage

Compensation = Sum insured x Actual loss

Compensation = 600,000 x 500,000

Reason: The lorry had been under insured.

DESCRIPTION METHOD OF PROMOTION

14. State four functions of commercial attaches

(b) Organize trade tours for Kenyan traders

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