CSEC Principles of Business Paper 1 May/June 2007 - Free CXC Past Paper with Answers

When an economist says that a product has utility, he means that it is

able to satisfy a want

Productivity can be measured by

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

Worker's compensation

The MAIN reasons for the existence of the public sector are to I. provide essential services II. regulate business activity III. compete with the private sector IV. promote economic growth and development

A debenture holder is one who

has first claim on any profits and is paid a fixed rate of dividend

must be paid any amounts owing in the following year

is paid a fixed rate of interest if the company makes profits

is entitled to a fixed rate of interest whether or not the company makes profits

A partnership that requires additional capital can legally do which of the following?

Borrow money from the bank

Advertise shares to the public

In the formation of a company, the Memorandum of Association states not only the name of the company but also the

amount of capital to be issued

way the directors are chosen

dividends to be paid per share

expenses incurred in the formation of the company

The PRIMARY role of the personnel department of a firm is to

compile a magazine highlighting outstanding workers

promote recreational activities for workers

assist employees in understanding industrial relations

hire, recruit, train, and motivate workers

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

Greater productivity

More division of labour

Increased communication

Increased capital investment

Which of the following statements BEST describes an authoritarian leader?

Making decisions without consultation

Allowing workers to plan their own work

Consulting those likely to be affected by the decision

Willingness to take suggestions

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 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 one of the following is NOT a function of money?

What do workers aim to achieve by collective bargaining?

I. Improvement and maintenance of working conditions II. Greater opportunities for promotion III. More capital intensive methods of production IV. Education and training for employees

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

Which of the following practices are characteristic of a free economy? I. Private ownership of assets II. Central planning III. Price fixing IV. Freedom to contract

The policies of a company are formulated by the

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

The MAIN purpose of production is to

build more factories

satisfy people's wants

The money used for the day-to-day operations of a business is called

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

An increase in the productivity of labour in the Caribbean region means that

a greater number of the population is now employed

more factors of production are available for production

both population and the value of output are decreasing

the value of output per man is greater than before

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

Which of the following are functions of the entrepreneur? I. Providing finance needed for production II. Co-ordinating the factors of production III. Undertaking risks by anticipating demand IV. Ensuring that workers are unionised

Which of the following is the simplest form of production?

Domestic consumption

Primary production is concerned with the

distribution of goods

provision of goods to meet essential needs

provision of raw materials

manufacture of goods

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

Proximity to large shopping areas

Availability of an abundant labour supply

Proximity to sources of raw materials

The presence of good roads and drainage

Which of the following are disadvantages of small firms? I. Employees feel a sense of belonging II. They have unlimited liability III. It is difficult to arrange financing IV. They have personal ties with customers

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 standard of living of a country is measured by the

The variables of a marketing mix can easily be remembered by referring to the four P's which are:

Product, price, place, promotion

Product, publicity, purchase, price

Product, promotion, package, price

Product, package, place, promotion

ALL persons can be called consumers because they

Businessmen usually employ 'loss leaders' to

give a free gift with each cash purchase

reclaim losses made in the sale of goods

attract more customers by selling a few items at a loss

promote new products in the organisation

Which of the following must be taken into account when packaging goods for retail?

I. Cost II. Brand III. Protection IV. Attractiveness

Which of the following contracts must be made by deed?

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

Transporting goods to suitable storage facilities

Providing a local supply of goods

Preparing goods for resale

Selling in small quantities

A 'purchase order' is a

statement offering to buy goods

notification of goods received

statement of debts outstanding

request for additional goods

Which of the following documents would give title to goods?

I. Bill of sale II. Bill of materials III. Bill of lading IV. Bill of sight

Which of the following instruments of payment would a firm use to effect the speediest transfer of funds from one country to another?

Telegraphic transfer

A post-dated cheque is one which

was written no longer than six months ago

is dated to agree with the date of the document requesting payment

is dated by the bank dates on the day the cheque is presented for payment

is dated for payment at a future date

The bank service which allows a customer to make payments by cheques is the

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

Which of the following forms of payment is legal tender?

Collateral is MOST needed when

taking out an insurance policy

ordering goods from a foreign manufacturer

borrowing from a financial institution

buying stocks and shares

Which of the following is legislation designed to protect the consumer?

Export licences are issued mainly to

encourage the local businessmen to produce more goods for export

indicate to the importing country that the goods are of a high standard

enable the government to control the flow of goods being exported

indicate to the importing country the price at which the goods are to be sold

Which of the following measures are used by government to redistribute income?

Custom duties and levies

Consumption tax and tariffs

PAYE and National Insurance

Excise duties and Value added tax

Which form of taxation is imposed on goods produced in a country?

Which of the following are MAJOR functions of the Central Bank? 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

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 of goods 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 describe a perfectly competitive market?

Few sellers and many buyers

Difficult entry to new markets

Production of almost identical goods

Imperfect consumer knowledge of prices

Which of the following actions of government is MOST likely to lead to an improvement in the standard of living?

Abolishing taxes on low incomes

Giving tax incentives to business

Increasing the income tax rate

Which of the following is NOT a benefit of international trade?

A greater variety of goods is obtained from overseas.

Political links are developed with other countries.

Import restrictions can be imposed on foreign items.

Producers are able to increase their market size.

Item 55 refers to the following table.

Year	Real Exports ($m)	Real Imports ($m)
1991	72	70
1992	83	79
1993	80	86
1994	95	33

In what year was there an unfavourable balance of trade?

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

The MAJOR aims of the European Union (E.U.) are free movement of I. Goods II. Capital III. People IV. Services

Which ONE of the following methods may government use to reduce unemployment?

Increase interest rates on borrowing

Deflation of the economy

Employment levy on firms

Investment can be defined as

a stock of goods existing at a given time

an addition to the capital stock of a country

a stock of raw materials which have fallen

a stock of goods owned by the government

Which of the following can be classified as benefits of nationalisation? I. Profits will remain in the country II. Essential industries will be state-owned III. Employment will be provided for citizens IV. The enterprise will have joint ownership

CSEC Principles of Business Paper 1 May/June 2007 - Free CXC Past Paper with Answers

CSEC Principles of Business Paper 1 May/June 2007 Questions