CSEC Principles of Business Paper 1 May/June 2005 - Free CXC Past Paper with Answers

Which of the following statements explain why a barter system restricts exchange?

I. There must be a coincidence of wants. II. The commodities used are not homogeneous. III. It is difficult to divide certain commodities. IV. A rate of exchange must be determined.

The functions of a business unit are

I. production of goods and services II. creation of jobs III. maximization of sales IV. education of workers

Subsidised meals for employees would fall under which of the following categories?

Workmen's compensation

Private enterprise is run MAINLY to

distribute goods and services fairly

provide jobs for more people

Which of the following can have its shares traded on the stock exchange?

A co-operative society

One benefit of multinational corporations to Caribbean countries is

reduction of national ownership

depletion of material resources

repatriation of profits

Which of the following is MOST LIKELY to occur when a member of a partnership dies?

The business is closed down

A new partner is brought in

The government takes over the business

The business becomes a joint stock company

In a firm with a departmentalized structure, which department performs the four duties listed below?

I. Receiving the goods purchased II. Giving a report on the quality of goods received III. Applying the principles involved in costing goods IV. Keeping an inventory

Item 9 is based on the diagram below which shows a section of a typical vertical organisational chart for a manufacturing company. BOARD OF DIRECTORS MANAGING DIRECTOR GENERAL MANAGER PRODUCTION MANAGER MARKETING MANAGER CHIEF ACCOUNTANT

The relationship between the highest level of management down to the various depart- ments is known as the

The Manager of ABC company has em- barked upon sponsoring a school cricket team in a Caribbean territory. Which re- sponsibility is the company fulfilling?

Its obligation to customers

Its social obligation

Its economic obligation

Its obligation to maximise surpluses

Item 11 refers to the following statement: "The leader deliberately stands back and lets the subordinates plan their own work and make their own decisions as far as possible."

Which word BEST describes the type of administration referred to in the above state- ment?

Good leadership is exemplified by which of the following activities? I. Motivating subordinate staff II. Providing more goods at lower cost III. Giving direction to the organization IV. Implementing established plans

Which of the following policies adopted by management is MOST LIKELY to ensure worker morale?

Employees should take part in decision-making on an ongoing basis since every employee has duties and responsibilities.

Supervisors should make decisions when they have been directed to do so by the general manager.

The general manager should make all the decisions because he is responsible for the performance of all employees.

Decisions made by the top manager and his advisers must be carried out by employees as directed to ensure that there will be no break-down in work procedure.

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

Which of the following features must a simple contract have? I. Offer II. Acceptance III. Written IV. Consideration

If the sale of goods become void, the

I. prospective buyer becomes the owner. II. seller has the right to keep any money or goods which have been given to him in this transaction. III. prospective buyer does not become the owner. IV. seller must return any money or goods given to him by the prospective buyer for the transaction.

A contract may be discharged by I. performance II. lapse of time III. offer and acceptance IV. breach

Item 18 refers to the following diagram.

[Diagram of Capital Land vs Variable Factor Labour showing Increasing and Decreasing returns]

The law of variable returns is represented in the figure above.

Point A on the graph represents the

A switch to capital intensive methods of production in a country might in the short run result in

increased unemployment

reduced unemployment

Which of the following is NOT a natural resource of the Caribbean?

The term 'human resources' refers to

materials and goods made by hu- man beings

raw materials used in the manufac- ture of goods

capital invested by shareholders in a company

persons available for productive and professional services

The supply of labour is NOT affected by

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

Unskilled labourers can demand higher wages.

The demand for skilled labour and professional services will de- crease.

Unskilled labourers can work harder.

Production levels of goods and serv- ices will decrease.

Which of the following is the BEST example of capital as a factor of production?

Which of the following are examples of extractive industries?

I. Mining II. Refining III. Fishing IV. Agriculture

Which of the following productive activities is LEAST LIKELY to be conducted on a large scale in the Caribbean region?

To which industry does a firm involved in food processing belong?

A cottage industry can BEST be described as

a small scale industry centered at home

an industry with pronounced use of manual processes

an industry where family members are involved

an industry that sells to local consumers

Which of the following LEAST affects the location of an extractive industry?

Proximity to sources of raw materials

Availability of an abundant labour supply

Proximity to large shopping areas

The presence of good roads and drainage

The standard of living is measured by

the per capita income

the national product

Which of the following can be described as a marketing activity?

Ensuring that workers are given fringe benefits

Distributing the commodities to outlets

Publicising advertisements for new staff

Issuing bulletins on staff matters

Which of the following factors will MOST LIKELY affect a consumer's decision in purchasing ham?

I. Taste II. Income III. Brand loyalty IV. Cost of alternatives

Which of the following is LEAST LIKELY to be described as good public relations for a company?

The offering of scholarships

Sponsorship of a steel band

Reduction in price to retailers

Hosting of an annual sport event

In which of the following types of trade can the hire purchase method of buying be used?

Which of the following is NOT a function of the retailer?

Transporting goods to suitable stor- age facilities

Providing a local supply of goods

Preparing goods for resale

Selling in small quantities

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

What was the amount paid by the Bank subsequently?

A post-dated cheque is one which

was written no longer than six months ago

is dated by the businessman to agree with the date of the document re- questing payment

is dated by the bank dates on the day the cheque is presented for pay- ment

is dated for payment at a future date

Which of the following allows an individual to receive cash on demand?

Which of the following documents is required for importing goods for which there are un- der-quota restrictions on imports?

Mr. Jones has several bills of fixed amounts to pay each month. His bank manager agreed to pay them monthly from Mr. Jones' account. This service, provided by the bank, refers to

The MAJOR functions of a central bank are I. acting as the government's bank II. keeping deposits of all commercial banks III. giving loans to private individuals and companies IV. helping to regulate the money supply of a country

The monthly payments collected by an insurance company on behalf of its policy holders are known as

Collateral is MOST needed when

taking out an insurance policy

ordering goods from a foreign manufacturer

borrowing from a financial institution

buying stock and shares

The document given with the purchase of an article stating that it will work for a specified period of time under given conditions is called the

Which of the following are the reasons for a Government imposing taxes? I. Promoting economic growth II. Redistribution of income III. Increasing interest rates IV. Improving the balance of payments

Loleen bought a building and sells it to make a profit. What type of tax is she required to pay?

loans given to businessmen

grants made to businesses by government

taxes withheld by government

profits realised from investment

Market equilibrium exists when

buyers pay reasonable prices for goods

sellers are satisfied with the price paid for their goods

at the ruling market price, buyers do not want to add to the stock of goods they already have

at current prices, the amount buyers wish to buy equals the amount sellers want to sell

Which of the following features are associated with perfect competition?

I. Many buyers and sellers II. Few buyers and sellers III. Freedom of entry into the market IV. Barriers to entry into the market

Which of the following characteristics BEST describes a competitive market?

Few sellers and many buyers

Production of almost identical goods

Difficult entry to new markets

Imperfect consumer knowledge of prices

A 'market' in economic terms is defined as

a place where tangible goods are bought and sold

a situation which exists when buyers and sellers influence the price of goods

a specific place where buyers and sellers meet

the business centre of the community

Which of the following are likely to affect the standard of living in a country? I. Widespread pollution II. A low literacy rate III. A high crime rate IV. Advertisements

Indices of economic growth indicate I. increased production II. higher per capita income III. higher unemployment IV. improvement in living conditions

The features of a retail outlet are I. selling in small quantities to the consumer II. having many departments III. involvement in sole trading IV. sometimes operating with relatively little capital

A government can correct an adverse Foreign Exchange problem by

increasing customs duties

implementing price floors

reducing severance payments

improving the rate of inflation

Which of the following trading agreements is Barbados promoting when it sells furniture to Jamaica?

Which ONE of these methods may government use to reduce unemployment?

Employment levy on firms

Increases in income tax

Deflation of the economy

Increased interest rates on borrowing

Adverse Balance of Payment problems can be corrected by I. tariffs II. quotas III. devaluation IV. revaluation

Which of the following are nationalised in most CARICOM territories? I. Food Production II. Water III. Communication IV. Electricity

CSEC Principles of Business Paper 1 May/June 2005 - Free CXC Past Paper with Answers

CSEC Principles of Business Paper 1 May/June 2005 Questions