Name: …………………………………………………………… Admission Number: ……………………………

School: …………………………………………………………… Class: ……………………………………………..

Date......................................................................... Signature …………………………………………

Instructions to Candidates

(a) Write your name and admission number in the spaces provided.
(b) Write the name of the school and Sign in the spaces provided.
(c) Answer all the questions in the spaces provided in the question paper.
(d) Non-programmable silent electronic calculators may be used.
(e) This paper consists of 10 printed pages.
(f) Candidates should check the question paper to ascertain that all pages are printed as
indicated and that no questions are missing.
(g) Candidates should answer the questions.

For Examiner’s Use Only

Question 1 2 3 4 5 6 7 8 9 10 11 12 13

Marks

Question 15 16 17 18 19 20 21 22 23 24 25

Marks

TOTAL

MARKS
2

1. State four reasons why land is considered a prime factor of production. (4marks)
(a) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(b) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(c) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(d) …………………………………………………………………………………………………………
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2. Outline four measures being used by the government to control high rate of
unemployment in Kenya. (4marks)
(a) …………………………………………………………………………………………………………
………………………………………………………………………………………………………..
(b) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(c) …………………………………………………………………………………………………………
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(d) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
3. Highlight four reasons why the owner of a small business enterprise would prefer to
a advertise his goods using posters. (4marks)
(a) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(b) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(c) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(d) …………………………………………………………………………………………………………
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4. State four challenges that a business with no plan will encounter in its operations.
(4marrks)
(a) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(b) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(c) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(d) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
5. The diagram shows equilibrium price and quantity
SO
Do
Price

Pe

S0
D0

O
Quantity

Draw a new demand curve on the diagram above showing a decrease in demand and
the Effect on. (4marks)
(a) Equilibrium price
(b) Equilibrium quantity
(c) Equilibrium point
6. Mention four roles played by intermediaries in the chain of distribution. (4marks)
(a) ..............................................................................................................................
..............................................................................................................................
(b) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
4

(c) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(d) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
7. Give four factors that may determine the amount of premium payable in life
assurance (4marks)
(a) ..............................................................................................................................
..............................................................................................................................
(b) ..............................................................................................................................
..............................................................................................................................
(c) ..............................................................................................................................
..............................................................................................................................
(d) …………………………………………………………………………………………………………
………………………………………………………………………………………………………..
8. Outline four features of oligopoly. (4marks)
(a) ..............................................................................................................................
.............................................................................................................................
(b) ..............................................................................................................................
..............................................................................................................................
(c) …………………………………………………………………………………………………………
………………………………………………………………………………….............................
(d) ..............................................................................................................................
............................................................................................................................
9. Mention four pre requisites of transport. (4marks)
(a) ..............................................................................................................................
..............................................................................................................................
(b) ..............................................................................................................................
..............................................................................................................................
(c) ..............................................................................................................................
..............................................................................................................................
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(d) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
10. State four principles that govern the operation of cooperative societies in Kenya.
(4 marks)
(a) .............................................................................................................................
.............................................................................................................................
(b) .............................................................................................................................
.............................................................................................................................
(c) .............................................................................................................................
.............................................................................................................................
(d) …………………………………………………………………………………………………………
………………………………………………………………………………………………………
11. Outline four criteria used in determining the size of the firm. (4 marks)
(a) …………………………………………………………………………………………....................
..............................................................................................................................
(b) ..............................................................................................................................
..............................................................................................................................
(c) …………………………………………………………………………………………………………
…………………………………………………………………………………….........................
(d) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
12. State four factors that may accrue an increase in the supply of a product.
(4 marks)
(a) ………………………………………………………………………………………........................
.............................................................................................................................
(b) ...............................................................................................................................
.............................................................................................................................
(c) ...............................................................................................................................
.............................................................................................................................
(d) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
6

13. Outline four reasons why there is need for ethical practices in business. (4 marks)
(a) …………………………………………………………………………………………….……………
…………………………………………………………………………………………………………
(b) ………………………………………………………………..………………………………………
…………………………………………………………………………………………………………
(c) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(d) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
14. Outline four features of monopolistic competition. (4 marks)
(a) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(b) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(c) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(d) …………………………………………………………………………………………………………
………………………………………………………………………………………………………..
15. Give four malpractices against which consumers may need protection. (4 marks)
(a) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(b) …………………………………………………………………………………………………………
…………………………………………………………………………………………………………
(c) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
(d) …………………………………………………………………………………………………………
………………………………………………………………………………………………………….
7

16. Outline four circumstances under which gaps in the market may be identified.
(4 marks)
(a) ………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
(b) ………………………………………………………………………………………………………………
…………………………….......…………………………………………………………………………..
(c) ………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
(d) ………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
17. State four sources of monopoly powers. (4 marks)
(a) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(b) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(c) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(d) ………………………………………………………………………………………………………
……………………………………………………………………………………………………..
18. Outline four reasons why a cheque may be dishonored. (4 marks)
(a) ………………………………………………………………………………………………………
…………………………………………………………………………………………………….
(b) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(c) ………………………………………………………………………………………………………
……………………………………………………………………………………………………..
(d) ………………………………………………………………………………………………………
……………………………………………………………………………………………………..
8

19. Highlight four measures which a firm may take to improve its human resource
productivity. (4 marks)
(a) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(b) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(c) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(d) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
20. Outline four circumstances under which verbal communication may be used.
(4marks)
(a) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(b) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(c) ………………………………………………………………………………………………………
…………………....................................................................................................
(d) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
21. State four essentials for a warehouse. (4 marks)
(a) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(b) ………………………………………………………………………………………………………
……………………………………………………………………………………………………..
(c) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(d) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
9

22. State four types of internal economies of scale to a firm. (4 marks)

(a) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(b) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(c) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(d) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
23. Highlight four reasons for making choices between competing wants. (4marks)
(a) ………………………………………………………………………………………………………
……………………………………………………………………………………………………..
(b) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(c) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(d) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
24. State four advantages of using credit cards as a means of payment. (4 marks)
(a) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(b) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(c) ………………………………………………………………………………………………………
………………………………………………………………………………………………………
(d) ………………………………………………………………………………………………………
……………………………………………………………………………………………………..
10

25. Indicate in the table below the office machine used to perform the following functions.
(4 marks)
Function Machine

a. Folding documents, placing them

in envelopes and sealing the
envelopes.

b. Making short hand dictations and

recording information on tapes.

c. Posting information to ledgers and

preparation of pay rolls.

d. For trimming documents into

required shapes and sizes.

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