Professional Documents
Culture Documents
POB CSEC Past Questions - Answers
POB CSEC Past Questions - Answers
PRINCIPLES OF BUSINESS
1) The first question is a compulsory 10 marks question, taken from May June 2002 past paper (General).
Question
1. It involves Economic Systems and Government Control of Business Activity.
(a) List TWO types of economic systems. (2mks)
(b) Explain the differences between the types of economic systems listed in (a) above. (4mks)
(c) Suggest two ways by which the government of your country can control business activity. (4mks)
Total 10 marks
Before reading the discussion and guidelines to answering the question, you may wish to plan an answer
that you would give to the question. Remember, there may be other possible answers than the ones
suggested.
DISCUSSION AND GUIDELINES
(a) Any two types of economic systems can be listed, for example, the free economic system and the
planned economic system. This part of the question does not require any expansion or explanation.
(b) The characteristics or features of the economic systems listed can be used to show the differences
between them.
Conjunctions such as whereas, on the other hand, while and however should be used to indicate your
reference to the opposite feature for the other economic system. For example, in the free economy, most
of the scarce resources are owned and allocated by private individuals and firms while in the planned
economy, scarce resources are owned and allocated by the government.
The marks allotted for this part of the question would indicate that a minimum of two differences is
required.
(c) Governments control of business activity can come in many forms including:
* Legislation The passing of laws that businesses should abide by.
Total 10 marks.
DISCUSSION AND GUIDELINE ANSWER
(a) Any TWO functions of a business can be listed e.g.to sell goods and services to satisfy peoples wants
and to provide employment for people. Expansion on and explanation of the functions is not required.
Total 20 marks
DISCUSSION AND GUIDELINE ANSWER
* (a) You must be careful to define a contract, and not an agreement. A contract is defined as a legally
binding agreement or an agreement that is created with legal intentions.
If you state that a contract is an agreement without stating any legal aspect, you may only score half of the
marks, since all contracts are agreements, but not all agreements are contracts.
* (b) (i) The answer to this part of the question is simply NO.
(ii) The vehicle was not offered for sale, therefore, one cannot accept an offer that was not made. An
acceptance MUST be to a firm offer.
* (c) This means that the vehicle is to be sold in the condition that it is presently in at the place or physical
locality that it is at.
(d) (i) Breach of contract means that a party or parties to the contract fail to keep their part or parts to the
contract.
(ii) The court can rule that the party that has breached the contract be forced to abide by their side of the
contract. Or, with the injured parties agreement, the existing contract can be terminated and a new one
can come into existence that satisfies all parties.
* (e) There are a number of ways in which a contract can be discharged or terminated. You are asked to
state TWO ways. Some ways are suggested below:
* By death of either party to the contract
* By bankruptcy, which must be proven in the legal sense.
* By frustration, which means that something, which was possible at the time the contract was made, now
becomes impossible .
Total 20 marks
DISCUSSION AND GUIDELINE ANSWER
(a) Autocratic/Authoritarian leadership style.
(b) (i) Any TWO of the following can be named: laissez-faire/free reign leadership style, democratic
leadership style, charismatic leadership style.
(ii) Laissez-faire individuals are given the broad outlines, but left on their own to carry out the major
aspects of the decisions.
Democratic those who will be affected by the decision are consulted before the decision is taken, though
the leader still reserves the right to make the final decision.
Charismatic the leader leads by virtue of his/her personality or charisma. Any ONE of the leadership styles
can be described.
(c) The following situations may result: poor management-worker relationship; industrial action may be
taken by workers; resignations by workers; workers may become discontented; poor self-esteem of
workers and reduced productivity of workers. Any TWO situations may be used.
(d) (i) The qualities of a good manager include: honesty, flexibility, ability to carry out management
functions and responsibilities, show genuine concern for employees and customers, ability to motivate
workers, be adaptable to various situations, able to work on own initiative, ability to use Management
Information Systems, be aggressive, but not too aggressive, be reliable etc.
(ii) If for example the manager is unable to motivate his employees, they will become lax and productivity
will fall. The business will end up loosing profits.
The negative effects of the lack of any of the qualities you listed in (d)(i) can be explained.
(e) Responsibilities of managers to employees include: to treat them fairly, to give them safe, clean
environment to work in, to allow them the freedom to join trade unions, to support their desires to be
Total 20 marks
DISCUSSION AND GUIDELINE ANSWER
(a) Examples of industrial action apart from striking include: sick out, go-slow, sit-in, overtime ban, workto-rule and boycotting the companys products etc.
(b) The action that management could have taken includes: lockouts, black-listing, suspensions,
termination of work contracts, deductions of salary etc.
(c) Collective bargaining refers to the trade union function in which the trade union representing the
workers and the employer or employers association discuss issues relating to employees with a view to
settlement which is suitable to both sides.
(d) See answer (e) in previous question.
Total 20 marks
DISCUSSION AND GUIDELINE ANSWER
(a) The entrepreneur is a human factor of production that is responsible for organising the other factors of
production and bearing the risks in production.
(b) Among the reasons why entrepreneurship is being encouraged are: entrepreneurship provides
opportunity for self employment, it also reduces unemployment, it increases the production of goods and
services, increases the variety of goods and services produced, Gross National Product is increased, makes
use of idle skills, and uses up local raw materials. Any THREE reasons may be suggested.
(3 marks).
(c) Explain TWO positive effects migration may have on your country (4 marks).
(d) Identify ONE measure your country uses to encourage nationals to return.
(1 mark).
Total: 20 marks
DISCUSSION AND GUIDELINE ANSWER
(a) There are a number of acceptable definitions of the small firm. You may wish to use any of the three
definitions from Trinidad and Tobago, or any other definition that you are comfortable with. The Trinidad
and Tobago definitions are:
* A firm whose total assets excluding land and buildings does not exceed TT$500,000.
* According to The Central Statistical Office, a small business is a business that employs less than 10
workers.
* A firm that employs only one top manager who should manage the business and perform other
functional duties as well.
Generally speaking, a small firm is one with virtually no middle management, i.e., there is hardly any
supervisors or subordinate managers.
(b) The FOUR sectors most likely to be dominated by small businesses are retailing, agriculture, personal
services and fishing.
Total: 20 mks
DISCUSSION AND GUIDELINE ANSWER
(a) There are four types of productive activities: extraction, construction, manufacturing and service
activities. Any three of the four can be used for the answer.
(b) A number of activities and countries can be used for this answer. Consider the following:
Agriculture
Jamaica
Fishing
Barbados
Mining
Guyana
Construction
Trinidad
Manufacturing
Trinidad
Transport
St. Lucia
Tourism
Jamaica
Communication
Barbados
You should note that other activities and countries may be considered, however, you should identify three
different productive activities and the countries in which the activities are observed.
(c) (i) The factors that influence the location of industry include: land, nearness to markets, nearness to
raw materials, nearness to a suitable labour supply, nearness to power, climate, infrastructure and the
government.
(ii) The economic and social implications of technological development include: increased output,
improved standard of living or quality of life, greater speed in producing, improved quality of production,
structural unemploy-ment, physical impairment and stress and alienation.
Note that the points discussed can be economic or social in nature and may also be positive or negative.
Each implication must be discussed, not listed, for full marks.
10) Now for the second and final question for this lesson.
(a) Differentiate between the terms market and marketing. (2 mks)
Total: 20 mks
DISCUSSION AND GUIDELINE ANSWER
(a) A market refers to a situation in which buyers and sellers are in contact for the purpose of buying and
selling goods and services. Marketing, on the other hand, refers to everything that is done to get goods
and services to the right people at the right time and priced in the most efficient manner, while making a
profit.
(b) Any four marketing activities can be listed.
Included are: market research, advertising, sales promotion, branding, distribution, sales, pricing; public
relations, research and development, marketing mix, etc.
(c) Taste, tradition, quality, price, brand loyalty, income, knowledge of the owners, convenience, the way
the good is advertised, etc.
(d) Methods of promotion that can be used include: advertising, sales promotions, publicity, public
relations and competitive pricing. Each method should be discussed, e.g., advertising may increase the
demand for local hamburgers. The business will sell more and make more profit.
11) CXC past paper, January 2001, General Proficiency, Question 6.
This question is based on economies and diseconomies of scale and mechanisation.
Company XYZ Ltd. manufactures and markets a range of candles of different shapes and lengths. Since its
incorporation in 1989, sales volume has increased tenfold. In order to meet demand, the company has
had to expand its production capacity and support systems considerably.
(a) List FOUR internal economies of scale the company might experience. (4 marks)
Financial economies.
Social economies.
Red tape, which is the elaborate and time-consuming procedures through which consumers must
pass.
Larger businesses often result in loss of coordination and lack of control, e.g. communication
between management and workers may slow down, wastages of factors, etc.
Output increases because work is speeded up and more can be produced in less time.
Fewer workers are needed as machines can do the work of a number of persons.
Costs are saved. These costs that are saved can be transferred to the market in the form of lower
prices to consumers.
It encourages more skilled workers to enter the workforce, i.e., workers who can operate specific
machinery etc.
Any FOUR benefits can be explained. For full marks, the benefits must be brought out clearly.
(ii) The negative effects of the introduction of mechanisation on the company might include:
Unemployment caused by the fact that less labour is required than when work is done entirely by
hand, therefore, the excess labour is normally laid off.
Some machines are of a technical nature and require skilled persons to operate them. In some cases
these skilled persons are hard to find.
Machines may be costly to maintain, as in some cases parts may have to be imported with the use
of scarce foreign exchange.
As in (c) (i) above, the negative effects of mechanisation must be properly discussed in order to gain full
marks.
12) CXC past paper, January 2001, General, question 8
The Caribbean island of Green Mountain is having problems with its financial institutions. Customers of
some banks are adding to the problems as many have withdrawn their deposits from the banks. The
government has asked the central bank to do all it can to prevent a collapse of the commercial banking
sector.
(a) State FOUR characteristics of money. (4 marks)
(b) List TWO functions or services offered by commercial banks. (2 marks)
Generally acceptable
Durable or long-lasting
Homogeneous
Portable
Accept deposits from customers for safekeeping and makes these deposits available to customers
when needed.
Allow customers use of the banks safety deposit boxes and night safe facilities etc.
Issuing notes and coins and recalling them from circulation when necessary.
Negotiating on behalf of the government in international financial agreements, e.g. with the IMF,
etc.
24 000
Imports
26 000
Invisible (net)
Exports
20 000
Imports
15 000
(a) (i) Differentiate between a countrys terms of trade and its balance of trade. (3 mks)
(ii) Calculate Tropicalos balance of trade using the figures given above. (2 mks)
(b) Calculate Tropicalos current account balance using the figures given above. (3 mks)
You are not required to explain the calculations in (a) (ii) and (b).
(c) Identify two ways in which a country may have a surplus on its current account.(4 mks)
(d) (i) Explain what is meant by balance of payment. (2 mks)
(ii) Discuss three ways by which a country would be able to finance the deficit in its balance of
payments. (6 mks)
Total 20 marks
DISCUSSION AND GUIDELINE ANSWER
(a) (i) A countrys terms of trade refers to the rate at which its goods and services exchange for the goods
and services of another country. It is calculated as:
24,000
- 26,000
-2,000US ($M)
(minus 2,000 US($M) )
(b) The current account balance takes into consideration the visible trade balance and the invisible trade
balance. From (a) (ii) we found the visible trade balance (balance of trade) to be minus 2,000 US ($M). The
invisible trade balance is plus 5,000 US ($M). This is the difference between invisible exports and invisible
imports. The current account balance is plus 3,000 US ($M).
(d) (i) A countrys balance of payments is its annual record of trading with other countries in terms of
income from exports and expenditure for imports.
(ii) To finance a deficit is different from correcting the deficit. To finance the deficit, the country must find
ways to make the balance of payments balance by covering the deficit. This includes:
Loans from international financial institutions e.g., International Monetary Fund and the World Bank.
Any short-term solution which results in the amount of money to cover the deficit, if properly discussed,
will earn two marks each.
14) January 2006, General past paper, question number eight
Government has a responsibility to protect consumers as well as to provide a climate for businesses to
survive.
(a) State TWO reasons why consumers need protection. (4 mks)
(b) Identify THREE ways in which the government of your country can ensure that consumers safety and
well-being are protected. (6 mks)
(c) Discuss THREE ways in which the government may help businesses to succeed.(6 mks)
(d) State TWO ways by which the government can ensure that businesses protect the environment. (4 mks)
Total : 20 marks
Now, for my discussion and guideline answers. I hope they will help you in getting a fair understanding of
the question.
Discussion and guideline answers.
(a) There are many reasons why consumers need to be protected. These reasons include the fact that they
receive:
By setting up consumer protection agencies such the Ombudsman, the Bureau of Standards and the
Consumer Affairs Commission.
Through the introduction of penalties for producers and sellers who show lack of regard for
consumers.
By passing legislation/laws that ensure consumer protection, e.g., processed food acts, Public
Health Act, The Standard Act and The Food and Drugs Act.
Allowing them subsidies and grants which result in the lowering of costs of production.
Reducing corporation tax which reduces overall costs and boosts profits.
Assisting businesses in finding markets and in the marketing of their products, etc.
For this part of the question, the THREE points selected must be properly discussed to score full marks.
(d) The protection of the environment has become increasingly important. The government can ensure
that businesses protect the environment by:
Taking over the production where businesses fail to protect the environment.
Having inspectors go around and ensure that practices are not damaging to the environment.
Giving warnings which if not adhered to, result in the business being taken to court or some other
action.
Encouraging the location of businesses in special areas where their production practices will not
harm the environment, etc.
2.d
3.a
4.d
5.d
6.d
7.d
8.d
9.c
10.d
11.b
12.c
13.b
14.a
15.c
16.a
17.b
18.b
19.a
20.b.
2. D
3. C
4. B
5. B
6. A
7. B
8. C
9. A
10. A