KCSE BUSINESS STUDIES TOPICAL QUESTIONS AND ANSWERS

Outline three characteristics of basic human wants

2/9/2020

What are basic wants?

These are the essential needs in life such that one cannot do without them. They include food, shelter and clothing. They are satisfied before the secondary wants. They have the following characteristics;

One cannot do without them;
They’re felt needs;
Cannot be postponed;
They are satisfied before secondary wants.

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Outline five benefits of a business to the society.

2/6/2020

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Answer

Benefits of a business to the society

Provides goods and services required for the satisfaction of the members of the society
Exploits available resources in the society which will lead to the creation of employment
Avails a variety of commodities /services which enable people to have high /improved living standards
Leads to improvement of infrastructure which are required for the facilitation of trading activities
It attracts other auxiliary /support firms/banks/insurance/colleges that are important to the society
Leads to the development of technology /new ideas /skills for quality/quantity/efficient production

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Explain five differences between a sole proprietorship and a public limited company.

31/5/2020

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Answer

Differences between sole proprietorship and public limited company

Sole proprietorships are formed by one person while the latter is formed by a minimum of 7
Sole proprietorship has unlimited liability while public companies don't
In sole proprietorship existence depends on the life of a sole proprietor while public ltd companies have perpetual life irrespective of life /death of shareholder
In sole proprietorship much of source capital is personal savings, in public ltd companies its from shares
Sole proprietorship is managed by the owner while in public ltd companies its managed by a board of directors
In sole proprietorship, few legal formalities are required while in public ltd companies formation procedure is long requiring many legal formalities
In sole proprietorship ,little capital is required while in public ltd companies ,a huge amount is required

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Explain five services that may be offered by wholesalers to the retailers.

31/5/2020

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Answer

Services that are offered by wholesalers to retailers:

Availing a variety of goods from different producers relieving the retailers of the burden of visiting the producers premises/meeting their different needs /choice

Breaking bulk into quantities desired by retailers /the retailers are able to purchase only in the quantities they can afford

Offer storage /warehousing services this relieves the retailer from the risks damage/cost of storage of goods/services

Provide credit/Trade credit/ financing to deserving retailers /which act as a source of capital deserving retailers/which act as a source of capital to them to be paid at a later date as agreed
Advertise goods/product promotion They advertise goods/product promotion to the benefit of retailers to find a ready market
They offer transport to the retailers relieving them the transportation cost

They inform/advice/educate the retailers on available offers for a certain commodity hence helping retailers to improve on their profit margin

Blending the goods they mix the goods to get a better/desired quality

Packaging the goods they put the goods in suitable containers/sizes/packages

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Highlight four contributions of entrepreneurs to the growth of an economy.

31/5/2020

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Answer

Contributions of entrepreneurs to the growth of an economy
include:

They create employment by establishing businesses.
They make use of locally available resources which would have been idle.
They improve the citizens’ standard of living by offering them a source of income.
Their ventures become a training ground for local labour which then becomes skilled’
They save the country foreign exchange which would have been spent on imports
Promote technological advancement through their creativity.
Promote entrepreneurial culture by being eye openers to other people who then start their own businesses.
Promote the accumulation of capital by ploughing back their profits,