SUGGESTED FORMAT OF MIDTERM TEST & FINAL TEST

I. True or false? (10)

Eg: The role of marketing is to convert consumers’ wants into a need.

II. Multiple choice (10)

Eg: The purpose of business activity is:

A to increase sales
B to produce products to satisfy customer needs
C to reward shareholders
D to provide employment.

III. Word formation (5)

We ……………….. in Banking and Finance. (SPECIAL)

IV. Sentence building (5)

Added value/ be/ difference/ selling price/ product/ cost/ bought in materials/ components.

V. Situation

ARC Limited is a small retail business that owns shops that cut keys for consumers. The business
was started four years ago by Luis, who is operating as a sole trader. The market is highly
competitive with a number of supermarkets operating a similar service within their stores and
a new online service that has affected ARC for the last two years. Luis would like to develop the
business by expanding into the industrial market by selling keys and locks to businesses. This will
require significant finance and an investor has already approached ARC to finance the new venture
in return for being made a partner.
a State two sources of external finance that may be available to ARC.
b Define the term ‘sole trader’.
c Outline how competition for ARC might affect the demand for its products.
d Explain two reasons why expanding into the industrial market might benefit ARC.
e Do you think Luis should accept the partnership offer of the new investor? Justify your answer. i