CXC CSEC Principles of Business — Paper 1 (Multiple Choice) · Set B
Total marks: 60 · Duration: 75 minutes
Instructions to candidates
- Answer ALL questions in this section.
- Each question is worth ONE mark.
- For each question, there are four possible answers, A, B, C and D. Choose the ONE you consider correct and record your choice on the Multiple Choice Answer Sheet provided.
- Use an HB pencil to record your answers on the Answer Sheet. Do NOT use ink.
- If you need to change an answer, erase it completely and write your new answer.
- Do NOT write on this question paper.
Paper
Section A — Multiple Choice (60 marks)
1. A vendor who owns her business alone, keeps all the profit and bears all the debts is a
A) sole trader
B) public limited company
C) co-operative
D) partnership
2. The MAIN advantage of forming a limited liability company is that
A) the business pays no taxes
B) owners’ personal assets are protected if it fails
C) no capital is needed
D) no records must be kept
3. An economy in which activity is shared between the private and public sectors is a
A) command economy
B) free-market economy
C) mixed economy
D) subsistence economy
4. A group of farmers who jointly buy supplies and sell crops, each with one vote, have formed a
A) co-operative
B) sole trader
C) multinational
D) public corporation
5. The number of subordinates reporting directly to one manager is the
A) chain of command
B) span of control
C) line of authority
D) organisational chart
6. Assigning a task and the authority to do it to a subordinate is called
A) delegation
B) centralisation
C) liquidation
D) specialisation
7. A business where almost all decisions are made at head office is said to be
A) decentralised
B) centralised
C) informal
D) horizontal
8. Setting objectives and deciding in advance how to achieve them is the management function of
A) planning
B) controlling
C) staffing
D) directing
9. A leader who makes all decisions alone and expects obedience uses which style?
A) autocratic
B) democratic
C) laissez-faire
D) consultative
10. According to Maslow, which need would a worker seek to satisfy FIRST?
A) esteem needs
B) self-actualisation
C) basic physiological needs
D) social needs
11. A firm that extracts bauxite from the earth is engaged in
A) primary production
B) secondary production
C) tertiary production
D) quaternary production
12. A tailor making a single wedding dress to a customer’s measurements uses
A) job production
B) flow production
C) mass production
D) batch production
13. A factory that relies mainly on machinery rather than workers is described as
A) labour-intensive
B) capital-intensive
C) service-based
D) primary
14. Which is NOT one of the four Ps of the marketing mix?
A) Product
B) Price
C) Profit
D) Promotion
15. Gathering new, first-hand data directly from consumers through surveys is
A) primary (field) research
B) secondary (desk) research
C) mass production
D) quality control
16. Dividing a market into groups of customers with similar characteristics is market
A) segmentation
B) penetration
C) saturation
D) liquidation
17. A member-owned co-operative that encourages saving and offers low-cost loans is a
A) credit union
B) central bank
C) stock exchange
D) insurance company
18. The institution that issues a country’s currency and regulates its commercial banks is the
A) central bank
B) credit union
C) building society
D) hire-purchase company
19. The regular payment made by a policyholder to an insurer in return for cover is the
A) premium
B) dividend
C) interest
D) commission
20. A factory that dumps untreated waste into a river to cut costs is MOST clearly neglecting its responsibility to
A) its shareholders
B) the environment and community
C) pay dividends
D) advertise