Business Activities

14 Grade 10 Business Studies questions on Business Activities, with worked marking schemes. 14 questions are available on this topic in full.

1. Question 1

   1 mark

   Which one of the following is NOT a business activity?

   A. A dairy co-operative buying milk from its members

   B. A shopkeeper in Voi selling paraffin to households

   C. A matatu sacco ferrying passengers to Taveta

   D. A church group serving free porridge to street children

   (1 mark)

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2. Question 2

   1 mark

   A trader buys beans from farmers in Narok during the August harvest, stores them, and sells them in February when supply is low. The utility mainly created by the trader is:

   A. Place utility

   B. Time utility

   C. Possession utility

   D. Form utility

   (1 mark)

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3. Question 3

   1 mark

   Which one of the following activities is an example of an extractive industry?

   A. Putting up a water tank tower at a school

   B. Weaving sisal ropes in a Thika factory

   C. Quarrying building stone at Ndarugu

   D. Selling second-hand clothes at Gikomba market

   (1 mark)

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4. Question 4

   6 marks

   Explain three reasons why the Government of Kenya encourages farm produce to be processed within the country instead of being exported raw.

   (6 marks)

   Marking scheme

   Award 2 marks per reason (1 for the point, 1 for the explanation), maximum 3 reasons: 1. Value addition: processed goods such as packed tea or bottled sunflower oil fetch a far higher price than the raw crop (1), so the country earns more foreign exchange from the same quantity (1). 2. Employment creation: processing plants need workers in the factory, packaging and distribution (1), which reduces unemployment, especially in rural areas (1). 3. Reduction of post-harvest losses: perishables such as mangoes and milk can be turned into juice or powder (1), so they do not go bad while waiting for a buyer (1). 4. A steady market for farmers: factories buy produce regularly (1), which stabilises prices and encourages farmers to produce more (1). 5. Industrial growth: processing builds local skills and supports linked industries such as packaging and transport (1), widening the industrial base (1).

5. Question 5

   1 mark

   A hairdresser who runs a salon in Eldoret town operates at which level of production?

   A. Secondary level

   B. Primary level

   C. Tertiary level

   D. Direct production

   (1 mark)

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6. Question 6

   2 marks

   Distinguish between direct production and indirect production.

   (2 marks)

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7. Question 7

   1 mark

   Specialisation among workers in a shoe factory at Limuru increases total output mainly because:

   A. It makes the workers willing to accept lower wages

   B. It removes the need to exchange goods with other people

   C. It reduces the amount of capital the factory requires

   D. Each worker becomes more skilled at the task repeated daily

   (1 mark)

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8. Question 8

   1 mark

   A firm is hired to carry processed tea from a factory in Kericho to the port of Mombasa for export. This activity is classified under:

   A. Extractive industry

   B. Manufacturing industry

   C. Constructive industry

   D. Commerce

   (1 mark)

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9. Question 9

   4 marks

   Outline four ways in which business activities benefit the people living in a small market town.

   (4 marks)

   Marking scheme

   Award 1 mark for each correct point, maximum 4: 1. They create employment and a source of income for residents (shop attendants, drivers, artisans). 2. They make goods and services available near home, so people do not travel far to buy essentials. 3. They provide a ready market for produce from surrounding farms. 4. They raise revenue for the county and national government through taxes and trade licences. 5. They attract infrastructure and social amenities such as roads, electricity, water and banking services. 6. They help residents acquire skills through apprenticeship and on-the-job training. Do not credit repeated ideas expressed in different words.

10. Question 10

    4 marks

    Outline four services that a warehouse offers to a trader dealing in dry beans.

    (4 marks)

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11. Question 11

    2 marks

    Distinguish between wholesale trade and retail trade.

    (2 marks)

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12. Question 12

    6 marks

    Other than time utility, describe three types of utility created by business activities, giving one example of each.

    (6 marks)

    Marking scheme

    Award 1 mark for the description and 1 mark for a suitable example, maximum 3 types (6 marks): 1. Form utility: changing raw materials into a more useful form (1); e.g. a posho mill in Kisumu grinding maize grain into flour (1). 2. Place utility: moving goods from where they are of little use to where they are needed (1); e.g. carrying fish from the Lake Victoria beaches to a Nairobi market (1). 3. Possession utility: transferring goods to the person who needs them through sale or hire (1); e.g. a shopkeeper selling a packet of sugar to a household (1). Time utility must not be credited as it is excluded by the question.

13. Question 13

    1 mark

    A soap manufacturer in Thika finds that households in Garissa do not buy his soap because they do not know that it exists. The aid to trade that best removes this hindrance is:

    A. Insurance

    B. Warehousing

    C. Advertising

    D. Banking

    (1 mark)

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14. Question 14

    6 marks

    Explain how each of the following aids to trade helps a maize farmer in Trans Nzoia to sell his harvest in a Nairobi market: (a) transport (b) insurance (c) banking.

    (6 marks)

    Marking scheme

    Award 1 mark for the service correctly described and 1 mark for its effect on the farmer, in each part (2 marks per part): (a) Transport: a lorry moves the bagged maize from the farm to Nairobi, creating place utility (1); carrying many bags at once lowers the cost per bag and opens a distant market that pays better (1). (b) Insurance: the farmer takes a policy covering loss of the maize by fire, accident or theft in transit or in store (1); he is compensated if loss occurs, so he trades confidently and is not ruined by one misfortune (1). (c) Banking: the bank offers a safe way to receive and keep the sale proceeds and to make payments (1); it also advances credit or an overdraft to buy seed and fertiliser before the crop is sold (1). Accept any correct explanation of the named service; do not credit a different aid to trade.

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