Total marks: 60 · Duration: 1 hour 15 minutes
Instructions to candidates
- This paper has 60 questions. Answer ALL questions.
- Each question is worth ONE mark.
- For each question there are four options, A, B, C and D. Choose the ONE you think is correct. In the January 2027 sitting, Paper 01 is taken online, so you select your answer on screen.
- The questions follow the syllabus spread for Paper 01: 20 items on each content profile — Organisational Principles (1–20), Production, Marketing and Logistics (21–40), and Finance, Government and Technology (41–60).
- All amounts are in dollars. A silent, non-programmable calculator may be used.
Paper
Organisational Principles (Items 1–20)
1. Which of the following BEST describes a want?
A) Something that a person desires but can live without
B) Something that is necessary for survival
C) Something that must be bought immediately
D) Something provided free by the government
2. A greengrocer buys mangoes from farmers in St Vincent and sells them to consumers in Barbados. The greengrocer is operating in the
A) tertiary sector
B) primary sector
C) quaternary sector
D) secondary sector
3. Which form of business organisation has unlimited liability?
A) Public limited company
B) Co-operative society
C) Sole trader
D) Private limited company
4. The main objective of a consumer co-operative is to
A) maximise profit for shareholders
B) remove every middleman from trade
C) compete with large supermarket chains
D) provide goods to members at reasonable prices
5. A vendor who owns her business alone, keeps all the profit and bears all the debts is a
A) co-operative
B) sole trader
C) public limited company
D) partnership
6. The MAIN advantage of forming a limited liability company is that
A) no financial records must be kept
B) the business pays no taxes
C) no capital is needed to start it
D) the owners' personal assets are protected if it fails
7. An economy in which activity is shared between the private and public sectors is a
A) free-market economy
B) mixed economy
C) subsistence economy
D) command economy
8. A group of farmers who jointly buy supplies and sell their crops, each member having one vote, have formed a
A) public corporation
B) multinational
C) sole trader
D) co-operative
9. The number of subordinates reporting directly to one manager is the
A) organisational chart
B) span of control
C) chain of command
D) line of authority
10. Assigning a task, and the authority to carry it out, to a subordinate is called
A) delegation
B) centralisation
C) specialisation
D) liquidation
11. A business in which almost all decisions are made at head office is said to be
A) decentralised
B) informal
C) centralised
D) horizontal
12. Setting objectives and deciding in advance how to achieve them is the management function of
A) planning
B) directing
C) staffing
D) controlling
13. A leader who makes all decisions alone and expects obedience uses which style?
A) Laissez-faire
B) Democratic
C) Autocratic
D) Consultative
14. According to Maslow, which need would a worker seek to satisfy FIRST?
A) Basic physiological needs
B) Self-actualisation
C) Social needs
D) Esteem needs
15. Communication from a manager to the workers below them is
A) upward communication
B) horizontal communication
C) downward communication
D) the grapevine
16. Before opening, an entrepreneur prepares a document setting out the business's objectives, market and financial forecasts. This is a
A) balance sheet
B) business plan
C) prospectus
D) partnership deed
17. Which factor is MOST important when choosing a site for a cement plant?
A) A scenic view for visitors
B) Nearness to raw materials such as limestone
C) Availability of tourist attractions
D) Nearness to luxury shops
18. An agreement in which goods are offered and accepted and something of value is exchanged, which the law will enforce, is a
A) receipt
B) quotation
C) contract
D) memorandum
19. The term "caveat emptor" means
A) goods cannot be returned
B) let the buyer beware
C) let the seller beware
D) all sales are final
20. The document that sets out the internal rules for running a company, such as how directors are appointed, is the
A) Deed of Partnership
B) Certificate of Incorporation
C) Articles of Association
D) Memorandum of Association
Production, Marketing and Logistics (Items 21–40)
21. A firm that extracts bauxite from the earth is engaged in
A) tertiary production
B) quaternary production
C) primary production
D) secondary production
22. Which type of production changes raw materials into finished goods?
A) Secondary production
B) Direct production
C) Tertiary production
D) Primary production
23. A tailor making a single wedding dress to a customer's measurements uses
A) job production
B) mass production
C) flow production
D) batch production
24. A factory that relies mainly on machinery rather than workers is described as
A) primary
B) capital-intensive
C) labour-intensive
D) service-based
25. A bakery produced 2,400 loaves in a day with 8 workers. Its labour productivity was
A) 19,200 loaves per worker
B) 2,408 loaves per worker
C) 30 loaves per worker
D) 300 loaves per worker
26. Breaking production into small tasks, each carried out by a different worker, is
A) division of labour
B) diversification
C) job rotation
D) delegation
27. Checking finished products for defects before they leave the factory is
A) public relations
B) stock control
C) quality control
D) market research
28. Two hotels in the same town join together to form one business. This is a
A) horizontal merger
B) franchise
C) conglomerate merger
D) vertical merger
29. The break-even point is reached when
A) variable costs equal fixed costs
B) profit is at its maximum
C) total revenue equals total costs
D) sales revenue is at its highest
30. Which is NOT one of the four Ps of the marketing mix?
A) Price
B) Promotion
C) Profit
D) Product
31. Which element of the marketing mix involves deciding how goods will reach consumers?
A) Promotion
B) Place
C) Price
D) Product
32. Gathering new, first-hand data directly from consumers through surveys is
A) secondary (desk) research
B) quality control
C) mass production
D) primary (field) research
33. Dividing a market into groups of customers with similar characteristics is market
A) saturation
B) liquidation
C) penetration
D) segmentation
34. Advertising that aims to tell consumers about a new product entering the market is
A) informative advertising
B) competitive advertising
C) generic advertising
D) persuasive advertising
35. Setting a low price to attract customers when launching a new product is
A) penetration pricing
B) cost-plus pricing
C) price skimming
D) psychological pricing
36. In which stage of the product life cycle do sales grow fastest?
A) Decline
B) Growth
C) Maturity
D) Introduction
37. An offer of "buy one, get one free" is an example of
A) public relations
B) branding
C) personal selling
D) sales promotion
38. A business that buys goods in large quantities and sells them to retailers is a
A) wholesaler
B) agent
C) manufacturer
D) consumer
39. The MOST suitable way to send 2,000 tonnes of bauxite from Jamaica to North America is by
A) air
B) road
C) pipeline
D) sea
40. The MAIN purpose of warehousing is to
A) train sales staff
B) set the prices of goods
C) advertise goods to customers
D) store goods safely until they are needed
Finance, Government and Technology (Items 41–60)
41. Jason deposited 5,000 in a savings account paying 4% simple interest per year. How much interest will he earn in 2 years?
A) 5,400
B) 400
C) 200
D) 408
42. The money paid to a commercial bank for the use of borrowed funds is
A) commission
B) principal
C) a dividend
D) interest
43. Which of the following is a LONG-TERM source of finance?
A) A bank overdraft
B) Factoring of debts
C) A mortgage
D) Trade credit
44. A statement forecasting the money expected to come into and go out of a business is a
A) cash flow forecast
B) income statement
C) trial balance
D) balance sheet
45. A fridge has a cash price of 5,800. On hire purchase the buyer pays a deposit of 1,500 and 12 monthly instalments of 400. How much more does hire purchase cost?
A) 1,300
B) 500
C) 4,800
D) 6,300
46. Which document is sent by a seller to a buyer to request payment for goods supplied on credit?
A) Credit note
B) Invoice
C) Receipt
D) Statement of account
47. A member-owned co-operative that encourages saving and offers low-cost loans is a
A) central bank
B) insurance company
C) stock exchange
D) credit union
48. Which of the following is a function of the Central Bank?
A) Providing mortgages to individuals
B) Running savings accounts for schoolchildren
C) Offering overdrafts to small traders
D) Issuing the country's currency
49. The regular payment made by a policyholder to an insurer in return for cover is the
A) interest
B) dividend
C) premium
D) commission
50. An insurance policy that compensates a business for stock destroyed in a fire is
A) motor insurance
B) fire insurance
C) life assurance
D) fidelity guarantee insurance
51. The principle that the insured must have a financial interest in what is insured is
A) indemnity
B) insurable interest
C) contribution
D) utmost good faith
52. A tax charged on goods and services, such as VAT, is
A) a direct tax
B) a tax on income
C) a property tax
D) an indirect tax
53. A government that reduces taxes to encourage spending is using
A) trade policy
B) monetary policy
C) privatisation
D) fiscal policy
54. A country exports goods worth 2.4 billion and imports goods worth 3.1 billion. Its balance of trade is
A) a surplus of 0.7 billion
B) a surplus of 5.5 billion
C) a deficit of 0.7 billion
D) a deficit of 5.5 billion
55. Which type of unemployment occurs when workers' skills do not match the jobs available?
A) Structural unemployment
B) Frictional unemployment
C) Cyclical unemployment
D) Seasonal unemployment
56. The Fair Trading Commission in several Caribbean countries is responsible for
A) registering all new businesses
B) promoting and protecting consumer rights
C) setting minimum wages
D) collecting taxes from businesses
57. A factory that dumps untreated waste into a river to cut costs is MOST clearly neglecting its responsibility to
A) pay dividends
B) advertise
C) its shareholders
D) the environment and the community
58. The Caribbean Single Market and Economy (CSME) was established mainly to
A) allow free movement of goods, services and people within CARICOM
B) create a single Caribbean currency at once
C) prevent migration between Caribbean countries
D) remove all taxation in member states
59. Selling goods to customers through a website is
A) outsourcing
B) e-mail
C) e-commerce
D) teleconferencing
60. A company with its headquarters in one country and operations in many others is a
A) statutory corporation
B) co-operative
C) multinational corporation
D) sole trader