CSEC Principles of Business Paper 1 May/June 2002 - Free CXC Past Paper with Answers

The fact that more than one type of economic system exists in the world today is attributable MAINLY to the fact that

there are numerous countries in the world

people of different countries have different religious and political ideologies

each system is modeled to cope with a different type of economic problem

different methods can be used to solve the same economic problem

Which of the following changes will NOT necessarily result from a decision to have employees specialize?

Increased standardization of goods

Improvement in the efficiency of labour

Increased production

Private enterprise is run MAINLY to

distribute goods and services fairly.

provide jobs for more people.

A public limited company in the private sector is normally established by

members of the public

an act of parliament

a statutory meeting of the national Chamber of Commerce

registration under the Companies Act

Item 5 refers to the following information.

A joint stock company issued ten thousand $2, six per cent shares at a premium of 12½ per cent, all of which were fully subscribed and duly paid up.

How much money will be recorded as share capital?

Broad policies for Public and Private Companies in the Private Sector are formulated by the

Which of the following can be regarded as a benefit to Caribbean countries from the establishment of multinational corporations?

Repatriation of profits

Depletion of material resources

Reduction of national ownership

Which of the following are the financial functions of a business organization?

I. Payment II. Budgeting of the business III. Costing all activities IV. Advertising its produce

Which of the following is LEAST likely to result from growth in an organization?

Increased capital investment

More division of labour

Greater productivity

Increased communication

A major role of a trade union is to encourage

staff to strike whenever they have problems at work

management to pay higher salaries and give longer vacations to staff

advancement of the welfare of its members

staff to become members of the union

For employees to produce to their maximum which of the following is important? I. Suitable working conditions II. Holiday with pay III. Good human relationship IV. Creating surplus

Mr Gyma, the General Manager of Z Co., never discusses problems with workers or listens to suggestions from his employees. His leadership style can be described as being

Which of the following management practices would contribute to the success of a business?

I. Pricing at maximum mark-up II. Paying attention to the quality of goods or services sold III. Communicating with employees IV. Earning maximum profits for owners

Which of the following responsibilities must be assumed by the management of a company?

I. Maximising efficiency and creating surpluses II. Maintaining good communication and human relations III. Producing goods of a marketable quality IV. Determining dividends to be paid to shareholders

A laissez-faire leader can be described as one who

is very constructive about what he does

listens to others and takes a reasonable view of what is said

stays in the background and allows subordinates to make their own decisions

decides what to do despite what others may think

If the opening stock figure was overstated by $1500, the effect on the net profit figure would be

a decrease of $3 000.

an increase of $1 500.

a decrease of $1 500.

an increase of $3 000.

Which of the following contracts MUST be evidenced in writing?

Purchase of a bus-ticket

Purchase of a lot of land

Purchase of a car for cash

If Albert fraudulently represents himself to be John and induces Peter to make a contract with him, the contract is

Which of the following is an example of extractive production?

Which of the following practices may be MOST appropriate in solving the unemployment problem in developing countries where the labour force is large? I. Greater production through increased labour II. Increased mechanisation III. Increase in vocational training programmes IV. Increase in salaries

Wealth set aside for the production of further wealth is termed

What is the MOST LIKELY effect on a developing economy when professional and skilled labour migrate to developed countries?

Unskilled labourers can demand higher wages.

The demand for skilled labour and professional services will decrease.

Unskilled labourers can work harder.

Production levels of goods and services will decrease.

Items 23 – 24 refer to the following information.

For each phrase, select one heading which is MOST closely related to it. Each heading may be used once, more than once, or not at all.

(A) Unemployment (B) Migration (C) Underemployment (D) Brain drain

The movement of educated, skilled people to settle in other industrialised countries?

The holding of jobs for which employees are overqualified?

Which of the following is the simplest form of production?

Domestic consumption

Primary production is concerned with the

distribution of goods

providing goods to meet essential needs

provision of raw materials

manufacture of goods

A bulk increasing industry should be sited near its

source of raw materials

Which of the following practices does NOT result from mechanization?

Production is increased.

Goods are produced to a standard pattern.

People may be needed for manual work.

The specialist becomes more skilled in his work.

The advantages which a firm may achieve by significantly increasing the size of its output are known as

effects of large scale production

risk-bearing economies

economies of concentration

Which of the following describes capital-intensive industry?

Large amounts of capital and very little labour

Large amounts of labour and very little capital

All capital and no labour

Capital and labour in the same proportion

A country has a favourable balance of trade when

it exports more than it imports

it imports more than it exports

there are no restrictions to trade

imported goods are cheaper

A company wishes to introduce a new breakfast cereal aimed particularly at small children. Which techniques of advertising are LIKELY to make the children ask their parents to buy the cereal?

I. Emphasize the nutritional value. II. Package it in a brightly coloured box. III. Enclose free gifts of toys and puzzles. IV. Compose attractive jingles and have them played regularly on the radio.

Which of the following activities carried out in a firm will NOT be under the supervision of the marketing manager?

Which of the following is an example of a cottage industry?

Making cabbage baskets at home for sale

A car-parts business operated from home

A hire-care business run from home

A plant nursery run from home

Which of the following is responsible for 'breaking bulk'?

Before exporter B sent goods to importer A he insured the consignment and paid the captain of the vessel the charge for carriage. Goods were shipped

If an exporter quotes prices CIF, it means that the

exporter pays the freight

importer pays the freight

exporter pays insurance and freight

importer pays insurance and freight

If you were not sure of a customer's ability to pay for an order by which of the following means would you request payment?

I. A crossed cheque II. A money order III. A bank draft IV. A promissory note

Items 39 – 40 refer to the following diagram. <diagram> Government Hill St Michael Three months after date pay to me or my order the sum of $1 000. Accepted by J. Fray Signed: L. Stanley To: J. Fray Castries St. Lucia </diagram>

The document above may be described as

Mr. Fray, in the document, is referred to as the

Tom invests his savings by buying shares in a company. From this investment Tom expects to receive

A court order requiring an employer to deduct money from an employee for payment of his debts is known as

Which of the following types of insurance is a government likely to require each employed individual to pay?

Which of the following is the MOST important use of collateral security to the borrower?

It can be sold if the borrower fails to pay.

It gives the banker an idea of the state of the business.

It establishes the financial position of the borrower.

It improves the borrower's chance of getting a loan.

Items 45 – 47 refer to the following: The group below consists of four lettered headings followed by a list of numbered phrases. Select one heading which is most closely related to it. Each heading may be used once, more than once or not at all. (A) Income Tax (B) Corporation Tax (C) Excise duty (D) Customs duty

Tax paid on wages and salaries

Tax paid by companies

Tax paid on goods entering the country

Item 48 is based on the following information. Loleen lives in a country where the following tax structure exists.

TYPE OF TAX	%
Stamp Duties	10
Capital Gains Tax	12
Corporation Tax	25
Customs Duties	30

What percentage of tax is paid by Loleen if she sells a building for a profit of $1.5m?

Using information from the diagram above, which of the following statements can be deduced?

I. More potatoes are demanded at a lower price. II. Fewer potatoes are supplied at a higher price. III. More potatoes are supplied at a lower price. IV. Fewer potatoes are demanded at a higher price.

Items 50-52 refer to the following. For each numbered statement select the one heading which is most closely related to it and mark the corresponding letter on the answer sheet. Each heading may be used once, more than once, or not at all.

(A) Pure competition (B) Pure monopoly (C) Monopolistic competition (D) Oligopoly

Price is unaffected by the behaviour of the individual buyer or seller and is established for the entire industry.

Monopolistic competition

The price allows the firm abnormal profit though its marginal cost equals its marginal revenue.

Monopolistic competition

Price equals the firm's average cost, marginal cost and marginal revenue.

Monopolistic competition

If a Caribbean country should devalue its currency, it is MOST likely that

its imports would become cheaper and its exports would become more expensive

its imports would become more expensive and its exports would become cheaper

both its imports and exports would become more expensive

both its imports and exports would become cheaper

Which of the following practices would NOT contribute to the economic development and growth of a community?

Increased use of the country's natural resources

Increased importation of consumer goods

Provision of loans and technical assistance for establishing local businesses

Provision of more infrastructure within the country

International trade owes its origin to

countries with large populations not having sufficient goods

the varying resources of different regions

the fact that countries desired to have greater contact with each other

the great need for foreign exchange by most countries

Which of the following is the distinguishing characteristic of a low standard of living?

Primary school education

Short life expectancy

Persistent ill health

Living in unhealthy conditions

Most English speaking Caribbean territories are members of all the following organizations EXCEPT

Item 58 refers to the following diagram.

What is the movement downwards along the curve known as?

Contraction of demand

Which of the following features is a disadvantage of nationalisation?

Profits remain in the country.

Jobs are provided for more people.

Losses are met by the taxpayers.

Essential services are provided at lower prices.

Which of the following are MAJOR economic problems facing many Caribbean countries today? I. High levels of unemployment II. Adverse balance of payments III. Low productivity in manufacturing IV. Lack of capital for investment

CSEC Principles of Business Paper 1 May/June 2002 - Free CXC Past Paper with Answers

CSEC Principles of Business Paper 1 May/June 2002 Questions