BS Rev P2-003 MS
2010 KCSE Business Studies Revision P2-003 marking scheme
BUSINESS STUDIES PAPER 2
1. (a) Problems likely to be experienced if intermediaries are eliminated from the chain of distribution.
- Manufactures will be forced to setup their own outlets which are an additional cost to them. Increased cost of distribution/transportation results in high prices for goods.
- Manufacturers would be forced to break the bulk.
- Producers would market/advertise their products which is an additional cost.
- Producers will have their own storage facilities which are an additional cost.
- Prices may fluctuate due to unsteady flow of goods.
- Reduces specialization in production due to additional function.
- The producer bears all the risk alone.
[Mention 1mk explanation 1 mk = @ 2 marks]
(b) Roles of commercial attachee
- To seek markets for new products
- Evaluate performance of their countries in foreign markets.
- Research on how to improve home products.
- Advice manufacturers on changes to make on their products.
- Facilitates trade transaction between manufactures/traders and agents in foreign markets.
- Organises trade fairs/exhibitions.
- Prepare reports for the government on performance of the country’s products.
2. (a) Reasons as to why oligopoly markets arise.
- Barriers to entry of other firms due to huge initial capital outlay.
- Where few firms control source of raw material for a particular commodity.
- Where a few firms hold potent right relating to technology of production.
- Aggression by some firms with measures that force other firms out of the industry.
- Where few firms enjoy large economies of scale hence producing at very low cost.
- Where collusion among few firms restrict entry of others in the industry.
- Shortage of entrepreneurs to set up firms to compete with already existing firms.
- Where there is government protection for already existing firms.
3. (a) Problems associated with the output approach.
- Inaccuracy of output figures especially in the private sector
- Problem of deciding on the goods and services to include e.g. housewife’s output.
- Problem of valuing output in the subsistence sector.
- Problem of valuing government output since many of its services are not sold in the market.
- The problem of price fluctuation.
- Problem of differentiating primary inputs from intermediate inputs.
- Problem of valuing illegal activities.
Mention 1 mark otherwise 2 marks
3. (b) MR. ALI
THREE COLUMN CASHBOOK
|Date||Details||Discount allowed||Cash||Bank||Date||Details||Discount received||Cash||Bank|
20 x ½ = [10 marks]
4. (a) Factors determining the size of a firm.
- Number of employees
- Volume of output
- Floor area covered by premises/size of land occupied.
- Capital invested.
- Production methods/techniques/technology.
- Market served/size of market
- Sales volume/profit earned.
[mention 1 mark otherwise 2 mks]
5. (a) Changes in economic development.
1. Shift from agricultural to manufacturing sector.
2. Reduction in illiteracy.
3. Increase in skilled man power.
4. Improvement in health facilities
5. Increase in technology.
6. Improvement in entrepreneurial ability
7. Good housing facilities
8. Improved infrastructure
(Award 2 marks each for 5 explained points)
(b) Factors that may lead to a deficit in balance of payment.
- Unfavorable terms of trade
- Increased demand for imports
- Reduced demand for the country’s export
- Repayment of foreign loans
- Devaluation of currencies of trading partners.
- Reduced capital inflow
- Restriction by trading system.
[Mention any five x 1 mk explain x 1 mk @ 2 mks x 5 = 10 mks]
6. (a) Factors that have hindered the creation of 500,000 jobs in Kenya.
- Lack of political will
- Shortage of economic resources
- Political instability/wrangles etc
- Poor government planning/priorities
- In adequate co-operant factors (inputs)
- Natural disasters
[Mention x1mk explain x 1mk @ 2mks x 5 = 10 mks]
(b) Importance of filling documents in an organization.
- Easy retrieval of documents
- Keeps office very tidy
- Safety of documents
- Documents are kept neat
- Documents are kept away from unauthorized persons
- Space is well utilized.
- Information for future reference is kept.
- Filed documents are used as evidence in case of disputes.
[Mention x 1mk explaining x1mk @ 2mks x 5 = 10 mks]