Module 6 revision

2010

1. Which of the following best shows the difference between supplementary and complimentary
goods?
SUPPLEMENTARY GOODS COMPLEMENTARY GOODS
A Where one product dependent
upon the production of another
B Where two products complete Where two products do not compete for resources
for the same resources
C Where two products compete at Where one product dependent upon the production of
the same time for the same another
input factors
D Where two products do not Where one product helps the production of another
compete for resources product

The illustration shows how yield of maize increases when a certain amount of fertilizer is applied to
one hectare of land. Use it to answer questions 2 and 3.

Amount of Extra increase of Maize yield in kg Extra maize yield

fertilizer in kg fertilizer in kg in kg
0 - 3000 -
100 100 3200 200
200 100 3700 500
300 100 4950 1250
400 100 5500 550
500 100 6000 500
600 100 6100 100
700 100 6150 50
800 100 6150 0

2. At what amount of fertilizer application does the law of diminishing returns begin to take place?
A 200kg C 600kg
B 400 kg D800kg

3. At what amount of fertilizer application will it be advisable to discontinue the addition of

fertilizer?
A 200kg C 400kg
B 300kg D500kg

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 4. A farmer has employees, funding and business management skills. What other factor of
production will he needs to start a vegetable production enterprise?
A capital C land
B entrepreneurship D time
5. Which of the following is a feature of a planned economy?
A a wide choice of goods and services
B Low administration costs
C the rationing of goods and services
D when demand and supply control the prices
2011
6. A small farmer in Nata village wants to spend some money on buying sheep and goods. Possible
combinations of rearing sheep and goods are shown in the table below.
Number of sheep 14 13 12 11 10 9 8
Number of goats 2 4 6 8 10 12 14

At first the farmer thought of buying 10 sheep and goods but finally he decided to buy 11 sheep.
What is the opportunity of the extra sheep?

A the value of one goat

B the value of two goats
C the value of eight goats
D the value of ten goats

7. In the table below which is a correct pair of risk and uncertainty?

risk uncertainty
A Accident Change in government policy
B Weather changes Fire damages
C Price fluctuation Change in demand
D Change in government policy Floods

8. Which of the following entries of a farm enterprise is not an example of a production record?
A breeding record
B calving records
C feeding records
D purchasing records

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 9. Ms Chaa is a vegetable farmer whose returns in a one hectare cabbage enterprise amounted to
P10000. She incurred total of P4000 of which P1200 were fixed costs.
What is the gross margin for the enterprise?
A P2800
B P4800
C P6000
D P7200

10. Which of the following describes a form of business ownership where shareholders have equal
say in the running of the business regardless of the number of shares they hold?
A limited company
B cooperative
C sole proprietorship
D partnership

11. The table compares the number of eggs (dozens) sold per week in four villages. The eggs were
locally produced or imported.
Maun Serowe Mochudi Molepolole
Number of eggs sold per week 300 400 150 200
Number of eggs supplied by 300 395 10 100
locals per week
Number of eggs imported per 0 5 140 100
week

Which two villages could support more local egg production?

A Mochudi and Molepolole
B Mochudi and Serowe
C Maun and Molepolole
D Maun and Serowe

2012
12. Which is a set of correctly classified farm records?
financial production
A depreciation mortality
B mortality creditors
C creditors depreciation
D debtors equity

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The following information was extracted from a poultry enterprise.

100 day old chicks @ P4.00 each

Drugs and vaccines @ P150.00
11 bags of feed at bP100 per bag
Permanent labour @ P600.00 per 4 months
8 bags of manure at P50.00 per bag
100 broilers sold @ P30.00 per bird
Annual tax paid at P200.00

13. What is the gross margin of the enterprise?

A P9.50 per bird
B P 15.50 per bird
C P950.00 per bird
D P1550.00 per bird

2014

Use the information to answer the question 14

A farmer owns a 20 hectare field of maize valued at P500 000.

He bought the following:
 A tractor with a plough at P150000.00
 10 bags of hybrid maize seeds@ P200.00 each
 He hired 10 casual labourers for 30 days @ P100.00 a labourer per day
 He sold 1000 bags of maize to the BAMB @ P 100 per bag.

14. What is the total variable cost of producing the crop?

A P182 000 C P100 000
B P118 000 D P32 000

15. Which of the following are correct entries for a balanced sheet?
A expenses and income
B expenses and assets
C liabilities and assets
D liabilities and income

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Use the information to answer question 16.

A poultry farm has the following workers:

Labourers, managing director, supervisor ,enterprise manager and a
farm manager
 There is water leakage in the poultry house
16. What will be the appropriate channel that a labourer could follow to make the managing
director aware of the problem?
A labourer- enterprise manager -farm manager -supervisor -managing director
B labourer farm manager - enterprise manager –supervisor- managing director
C labourer- supervisor- enterprise manager- farm manager- managing director
D labourer supervisor- farm manager -enterprise manager - managing director

Use the information to answer question 17

Farmer A intercropped maize with cowpeas, the output of maize increased as the output of cowpeas
increases

Farmer B grew maize and cabbage on the same field. An increase in the output of cabbage did not
influence the output of maize

17. This of the following is correct about the relationship between the crops grown by the two
farmers.

Farmer A Farmer B
A Complementary supplementary
B Substitute Joint
C Substitute Complementary
D supplementary Joint

2015
18. Which term describes the relationship between product A and B , if an increase in production of
A does not reduce or increase output of B?

A competitive
B complementary
C substitute
D supplementary

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 19. In the table below, which pair correctly matches a supply determinant with a demand
determinant?
Supply determinant Demand determinant
A Change in government policy Change in population
B Consumer s income Consumer s preference
C Cost of production Change in weather
D Price of related good Number of sellers

20. A chicken farmer sold 200kg of meat at a price of P5/kg but when the price increased to P6/kg,
the farmer sold only 150kg.
What is the elasticity of demand of the chicken meat?

A 0.63 C 0.90
B 0.80 D 0.95

21. What does an elasticity of demand of zero signify?

A elastic demand
B inelastic demand
C perfectly elastic demand
D perfectly inelastic demand

22. Which conditions of supply and demand are likely to produce the lowest prices?
supply demand
A High high
B high Low
C low high
D Low Low

2009
23. Which statement is true about planned economy?
A. Consumers preferences are easily met
B. Price is controlled by market forced
C. Production involves no competition
D. The system is service oriented

24. Which list contains only financial records?

A. Depreciation, water bill, profit
B. Feed costs, electricity bill, birth rate
C. Rent, wages, mortality
D. Salaries, yield, slaughter date

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 25. Which pair of resources is necessary to start an agribusiness enterprise?
A. Communication and land
B. Education and training
C. Labour and capital
D. Marketing and leadership

26. What is a function of marketing?

A. Administration
B. Assembling
C. Capital
D. Depreciation

27. What is the significant of advertising in an agribusiness?

A. To create a demand for a product
B. To fulfill a business requirement
C. To provide information to management
D. To reduce marketing price

Use the information below to answer question 28.

 100% in the yield of all crops!

 Watch your harvest as it floods the shelves
 Use green solution soil supplement
 Value for money guaranteed!

28. What aspect of agribusiness is illustrated by these statements?

A. Advertising
B. Financing requirement
C. Selling
D. Information sharing

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Use the information about Limpopo Investment to answer questions 29 and 30.

Limpopo investments

Exists as a legal entity

Has limited liability
Pays its own tax
Owned by shareholders

29. What form of a business ownership is this?

A. Company C. partnership
B. Cooperatives D. sole proprietorship

30. What is the advantage of this form of business ownership?

A. It easy to establish
B. It has a continuity of existence
C. It enables quick decision making
D. It requires small amount of capital

The diagram shows the relationship price and quantity of a product. Use it to answer questions 31 and
32.

31. What is represented by the letter V?

A. Equilibrium point C. quantity demanded
B. Equilibrium price D. quantity supplied

32. What is represented by letters S and T?

S T
A Quantity demanded Demand curve
B Supply curve Equilibrium price
C Equilibrium price Quantity demanded
D Supply curve Demand curve

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 33. Which graph represents the law of diminishing returns?
A. C.

Price Price

Quantity quantity

B. D.

Price Price

Quantity Quantity

34. Which is not a feature of a planned economic system?

A. Centralized decision making
B. Most prices are fixed by the government
C. Productive resources are state owned
D. Free enterprise and profit motive

35. What is the name of an economic system which combines both market sector and non-market
sector?
A. Capitalism C. mixed economy
B. Market economy D. planned economy

36. What is the responsiveness of demand of a particular good to change its own price?
A. Elasticity of demand C. law of demand
B. Elasticity of supply D. law of supply

37. Which is the correct formula for determining the elasticity of supply of s particular good?

percentage change in quantity demanded percentage change in quantity demanded

𝐴. 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑜𝑤𝑛 𝑝𝑟𝑖𝑐𝑒
C. 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒𝑜𝑓 𝑟𝑒𝑙𝑎𝑡𝑒𝑑 𝑝𝑟𝑜𝑑𝑢𝑐𝑡

percentage change in quantity supplied percentage change in quantity supplied

B D
𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑖𝑛 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑠𝑢𝑝𝑝𝑙𝑖𝑒𝑑 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒 𝑟𝑒𝑙𝑎𝑡𝑒𝑑 𝑝𝑟𝑜𝑑𝑢𝑐𝑡

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 38. Which is likely to increase demand for pork in Botswana?
A. Advertising
B. Improved meat technology
C. Fall in price of beef
D. Population increase of Muslims

39. Who decides on what, how and how much to produce in planned economy system?
A. Individual private producers
B. Individual private consumers
C. Central planning authority
D. Entrepreneurs

The table below shows the supply, demand and selling price of a crop
Supply(kg) Demand (kg) Price (kg)
2.35 4.7 16
3.00 3.0 14
3.60 1.2 10
3.25 2.3 12

40. What is the price when the demand exceeds supply?

A. P16 C. P12
B. P14 D. P10

41. Which diagram illustrates demand?

A B.

Price price

quantity quantity

C. D price

price

quantity quantity

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 42. Which diagram illustrates supply?
B.
A.
Price
price

quantity quantity

D.

C. price

Price

Quantity quantity

43. Which diagram illustrate equilibrium price?

B
A.
Price price

Quantity quantity

D
C.
price
price

quantity quantity

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The diagram shows the yield of maize in response to fertilizer application. Use it to answer question 44.

D
C
Increase
Yield of B
maize

Increase fertilizer application

44. At which point A, B, C or D does the law of diminishing returns start to apply?

45. Which of the following is a production record as opposed to financial record?

A. Debtor’s record C. fuel use record

B. Expenses record D. sales account

46. Which of the following is a fixed cost?

A. Cost of fertilizer C. cost of tractor spares
B. Cost of feeds D. cost of spray chemical

47. The fall in the value of fixed asset resulting from age, use and obsolesce is called?
A. Appreciation C. Depression
B. Depreciation D.value

48. What is gross margin of an enterprise?

A. Sum of the fixed costs and variable costs
B. Gross income minus variable costs
C. Gross income minus fixed costs
D. Net profit before taxation

49. Which of the following is a fixed asset item as opposed to current asset?
A. Cash at hand C. stocks
B. Debtors D. Motor vehicle

50. What is the net worth as used in a balanced sheet?

A. Net assets C. working capital
B. Owner’s capital D. net profit

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 51. How is gross margin determined?
A. Total returns- variable Total returns costs
B. Total returns- total costs
C. Total returns- opportunity costs
D. Total returns- fixed costs

52. What is working capital?

A. Assets- liabilities
B. Current assets – current liabilities
C. Current assets divided by current liabilities
D. Current liabilities – current assets

53. Which is true where there is no partner deed?

A. Partners receive 5% interest on their capital
B. Partners pay 10% on drawings
C. Partners share profit in proportion to their capital
D. Partners share profi equally

The following is a balanced sheet for a farm enterprise. Use it to answer question 54.

assets liabilities
P T P T
Debtors 200 00 Bank loan 250 0000
Cash in hand 1000 00 Overdraft 500

54. What is the net capital?

A. P1200.00
B. P750.00
C. P450.00
D. P250.00

55. What describes a business organization that is owned and run by an individual person?
A. Co-operative
B. Limited company
C. Partnership
D. Sole proprietorship

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The table below sows the income and expenditure of a poultry farm. Use it to answer questions 56
and 57.

Expenses Totals(P) Income Totals(P)

Layers mash 500.00 eggs 2000.00
Drugs 50.00 Poultry manure 500.00
Permanent labour 700.00
Depreciation 500.00
Layers 100.00

56. What list contains only variable costs?

A. Depreciation, layers and drugs
B. Depreciation, layers mash and drugs
C. Layers mash, layers and drugs
D. Layers mash, depreciation and permanent labour

57. What are the total variable costs?

A. P65.00 C. P1700.00
B. P1250.00 D. P1850.00

58. What is ‘limited’ in a limited company?

A. Liabilities if shareholders of debts
B. Powers of managing director
C. Range of products/ service offered
D. Size of membership

59. Why do businesses advertise?

A. To create demand of new products
B. To provide information to management
C. To reduce market costs
D. To fulfill a legal requirements

60. In which business form do shareholders have equal say in the running of the business regardless
of their shareholding?
A. Cooperative C. partnership
B. Limited company D. sole proprietorship

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 61. Which is not a market function?
A. Financing C. selling
B. Production D. storage

62. What is carried out to determine the responsiveness of maize to price change?
A. Advertisement C. business plan
B. Feasibility study D. market research

The diagram below shows an organizational structure of a farm business. Use it to answer question
63.

Livestock manager crop Manager

(Co-owner) (Co-owner)

Account clerk livestock foreman crop foreman

Labourers labourers

63. Which form of business ownership is shown?

A. Company C. partnership
B. Co-operative D. sole proprietorship

64. Which of the following is not an activity of the process function when marketing a farm
product?
A. Drying B. Grading C. packaging D. sorting

65. Which statement describes the total cost of production in an enterprise?

A. Sum of fixed costs
B. Sum of variable costs
C. Sum of fixed costs and variable costs
D. Sum of depreciation and variable costs

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Use the table to answer question 66.

Number of 50kg bags of Maize yield/kg per

urea per hectare ha
0 3050
1 3150
2 3300
3 3475
4 3600
5 3680
6 3730
7 3760
8 3770
9 3760
A 50kg of urea costs P150.00. A kilogram of maize sells for P2.00

66. What is the amount of fertilizer at which the law of diminishing returns starts to apply?
A. 50kg C. 300kg
B. 200kg D. 400kg

The diagram shows the relationship between price and quantity of a product. Use it to answer
question 67.

Price

Quantity

67. Which point in the diagram shows the equilibrium?

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Use the information in the table which has been extracted from a dairy production enterprise to
answer questions 68 and 69.

Cost in Pula (P) Income in Pula(P)

12 cows 36000 100 bags of kraal manure 2000
Fuel to pump water 3500 2 bulls 5000
Permanent labour 10800 10 calves 20 000
200 bales of lucerne 11000 Milk sales 17 520
Drugs 600
60 bags of dairy meal 5400

68. What is the total fixed cost of the enterprise?

A. P10 800 C. P46 800
B. P25 900 D. P67 300

69. What is the profit/loss made by the enterprise?

A. P22 780 loss C. P22 780 profit
B. P44 520 loss D. P44 520 profit

The bar chart below shows the demand of eggs in four villages in Botswana. Use the bar chart
to answer question 70 and 71.

400
350
300
250
200
150
100
50
0
Maun Serowe Mochudi Molepolole

KEY

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