PRINCIPLES OF BUSINESS PAPER 2 QUESTIONS

NATURE OF BUSINESS
1) Define the term subsistence economy:
Answer: This is an economic system where persons provide just enough to
survive.
2) (i) List two instruments of exchange
Answer: Credit card and bill of exchange
(ii) Explain ONE difference between the private sector and the public
sector.
Answer: The public sector is the part of the economy which consists of
businesses owned and operated by the government while the private sector
is the part of the economy which consists of businesses owned and operated
by private individuals, (The private sectors main aim is to make profits
while the public sectors main aim is to provide services to the entire
country).
3) State TWO characteristics of EACH of the following forms of
business organizations sole trader and partnership.
Answer: Sole trader is owned and managed by one person and must be
registered with the registrar of companies. A partnership is managed by
partners, The business must also have a partnership deed.
4) (i) Identify the names of TWO franchises in the Caribbean
Answer: KFC and Burger King.
(ii) Explain ONE benefit of operating a franchise
Answer: Less chances of the business failing with a well-known name being
used.

(iii) Differentiate between the free market economic system and the
planned economic system.
Answer: A free market system is one that is owned and operated by private
individuals with little or no government interventions while a planned
economy is a system in which all economic decisions are made by the
government.

5) Describe ONE role of each of the following stakeholders

(i) Employers
Answer: To provide resources
(ii) Employees
Answer: To provide the labour needed to allow goods and services to be
provided.
6) (i) Identify TWO legal/ethical business practices
Answer: Ensuring taxes are paid and adopting good environmental
practices.
(iii) Describe the consequences of unethical business practice for
EACH of the business practices named in c (i) above
Answer: Consequences of not paying taxes may lead to legal actions being
taken against the business leading to heavy fines or imprisonment.
Consequences of unethical disposal of waste this may lead to pollution in
the environment and fines being imposed by the courts.

INTERNAL ORGANIZATION

Define the term Organizational chart