KULLEĠĠ SAN BENEDITTU Secondary School, Kirkop

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1 KULLEĠĠ SAN BENEDITTU Secondary School, Kirkop Mark HALF YEARLY EXAMINATION 2016/2017 One Graded Paper FORM 4 BUSINESS STUDIES TIME: 1h 30min Section A B C D1 D2 E TOTAL Marks Student s Mark DO NOT WRITE ABOVE THIS LINE Name: Class: Section A (10 marks) Fill in the blanks with the appropriate words or terms from the list below. Each word can only be used once. co-operative public mass production marketing stock-exchange factors stages job production private taxation 1. is the main source of finance for the government 2. The manufacture of a tailor-made suite is an example of while shoes and socks are producing by a technique known as. 3. The type of business organisation in which every member has one vote is referred to as. 4. The is that institution which lets the general public to buy and/or sell shares. Kulleġġ San Benedittu - Kirkop Page 1 of 10

2 5. The resources required to produce goods and services can be classified into four. Collectively they are called the of production. 6. For production to take place, it needs to pass through the three of production. 7., which is one of the basic business functions, is about informing potential customers about products and services and persuading them to buy. 8. Public Limited companies (plc) form part of the sector while Public corporations forms part of the sector. Section B (20 marks) In the empty column provided write down the most appropriate term related to the statement in the first column. An example is given A digital pattern of lines and spaces used to identify goods BAR CODE A committee elected by shareholders to decide policy and to make important decisions about the running of a company. A document published by a limited liability company when issuing shares in order to try to attract the general public to buy them The resistance of a firm to change its location after the original reasons to locate there no longer exists. A firm that is able to locate anywhere without restrictions These are experienced when firms grow beyond the optimum size and are reflected by unit costs increasing as output increases. Kulleġġ San Benedittu - Kirkop Page 2 of 10

3 Large businesses tend to be in a better position than certain other businesses because their size gives them advantages over smaller organisations. Most businesses start off small, and grow in size by putting profits back into the business and use it to extend the market for their existing product and/or to increase the range of their products. If a business wants to grow more quickly, it might consider a merger (amalgamation) OR takeover. An important objective of any business is to acquire an excellent reputation. All businesses care about what the public thinks of their company and will use a variety of ways to try and influence the public to have a high esteem for the firm and have a good impression of a business. Another important objective of any business is to try to provide an excellent product or service, and by securing an after-sales service which fulfills customers needs. Section C (10 marks) Underline the correct answer: 1. In a carpentry factory, Liam is the designer of the furniture, Lyon is the cutter, Thomas is the joiner, Kyle is the finisher while Garry is the sprayer. Of what type of specialisation does this example refers to? (a) Specialisation by product (b) Specialisation by task using semi-skilled labour (c) Specialisation by service 2. Andreas is the owner of an aluminum workshop which is situated in Safi. He makes repairs and replaces any kind of aluminum apertures. This type of production is known as: (a) Direct Production (b) Job Production (c) Indirect Production 3. A market niche is: (a) a smaller, often very specialist, part of a market segment (b) a gap in the market, identified by a business when developing a new product (c) a position in a street market for which the stall holder has to pay higher rent Kulleġġ San Benedittu - Kirkop Page 3 of 10

4 4. Secondary data used in market research include (a) information which already exists, such as government statistics (b) information downloaded from a PC (c) information which has been gathered from a new source, for example, by asking people for their opinions. 5. Which type occurs as a result of economic booms and recessions? (a) frictional unemployment (b) structural unemployment (c) cyclical unemployment 6. Due to man s insatiable nature: caused by unlimited wants but controlled due to limited income, (a) there is an infinite quantity and variety of goods and services (b) man manages to satisfy all the needs and wants in his scale of preference (c) choices need to be made leading to opportunity cost 7. Another term for capital as one of the four factors of production is: (a) Natural resources (b) Man made resources (c) Human resources 8. Commerce include: (a) police officer, insurance, factory workers (b) deliverymen, salesman, banker (c) teachers, farmer, hairdressers 9. When economists say that something is scarce, they basically mean that: (a) only a very small amount of it is available at that time (b) people have increased their demand for that particular product (c) there is not enough of it to completely satisfy everyone s wants 10. Agenda of a meeting are (a) items that are going to be discussed during the next meeting (b) written communication sent out in advance of a meeting (c) a record of what had been discussed and decided at a previous meeting Kulleġġ San Benedittu - Kirkop Page 4 of 10

5 SECTION D ANSWER BOTH QUESTIONS IN THIS SECTION. Each question carries 20 marks ALL QUESTIONS ARE TO BE ANSWERED ON THE FOOLSCAPS PROVIDED Remember to write down your name and class on each foolscap. You are also required to write down the section AND the number of each question besides your answer. Do NOT copy the questions given. CASE STUDY 1 (20 marks) Analyse the following and then answer the questions laid down thereafter: Tal-Galletta is a local firm who specializes in the production of Maltese traditional biscuits. It has been in business for a number of years but now it seems appropriate to extend its operation. There are various possibilities for expansion but one of the considerations is to join with another similar type of business called Tal-Kristini and together they join one business which they intend to name Tal-Buskuttelli. 1. The objective of GROWTH is extremely important if the business desires to secure its long-term survival and constant profit maximization! List the three main reasons WHY FIRMS GROW? (3) (iii) 2. Firms can grow either INTERNALLY or EXTERNALLY. Explain these two terms by giving suitable examples (2) Internal Growth: External Growth: Kulleġġ San Benedittu - Kirkop Page 5 of 10

6 3. What is the main difference between a merger and a takeover? (2) Merger: Takeover: 4. If Tal-Galletta decides to amalgamate with Tal-Kristini what type of integration it would be? (1) 5. List two advantages associated with this type of integration. (2) Another alternative open to Jeremy, the proprietor of Tal-Galletta is to join forces with Gajtan, an old established shop located in the core of his village and starts selling his variety of traditional crusts from there. 6. If Jeremy decides to do so, what is called this type of integration? (1) 7. List an advantage associated with this type of integration. (2) 8. Another option for Jeremy is to join with a business which involves the production of all the raw material required for producing his traditional variety of Maltese delicates. If Jeremy decides to do so, what is called this type of integration? (1) 9. List an advantage associated with this type of integration. (2) 10. Give another name for Conglomerate and briefly explain what it entails. (2) Kulleġġ San Benedittu - Kirkop Page 6 of 10

7 11. Indicate two reasons why large businesses opt for such a type of integration. (2) SECTION D CASE STUDY 2 (20 marks) Read the following passage and then answers the questions that follow. Companies are usually larger than businesses controlled by sole owners or partnerships. A partnership which is seeking to expand and raise more capital would do well to consider becoming a company. 1. There are two main types of limited liability companies. List them and state what is the main difference between the two. (3) 2. Explain the following two important terms linked to Companies: (2) Limited Liability Separate Legal Entity Kulleġġ San Benedittu - Kirkop Page 7 of 10

8 3. Companies need to prepare two important documents to be submitted to the Registrar of Companies for formation: List these two documents and briefly explain what they contain. (2) 4. Once the Registrar of Companies is satisfied with the documentation submitted by the applicant company it issues a specific certificate to each respective company. By referring to the words below, fill in the blanks accordingly. (2) Trading Certificate Certificate of Incorporation A is issued by the Registrar of Companies to a private limited company (ltd) while a is issued by the Registrar of Companies to a public limited company (plc). In Franchising, a well-known and famous company allows another business to buy the right to use their products or techniques under their trade name. Thus, Franchising is an agreement in which one business buys the right to sell the goods or services of another established business and is allowed to use its name and logo. 5. Explain the following terms related with Franchising : (2) Franchisor Franchisee Kulleġġ San Benedittu - Kirkop Page 8 of 10

9 6. List one advantage and one disadvantage of franchising to the Franchisor. (2) Advantage: Disadvantage: 7. List one advantage and one disadvantage of franchising to the Franchisee. (2) Advantage: Disadvantage: 7. Explain the meaning of Royalty payment (1) 8. Explain the following terms. You can give a suitable example from the Maltese economy to illustrate yours answer (2) Monopoly Oligopoly 9. Explain the term non-price competition. (1) 10. Why Multinational Companies are of great importance to Maltese economy? (1) Kulleġġ San Benedittu - Kirkop Page 9 of 10

10 SECTION E (Total: 20 marks) Choose TWO of the following topics and answer the questions related to it. Each question carries 10 marks. 1. Economies of Scale and the survival of Small Firms What do you understand by Economies of Scale? (2) Describe two internal Economies of Scale (2) (iii) What do you understand by Diseconomies of Scale? (2) (iv) Mention two reasons that can cause internal Diseconomies of Scale (2) (v) In spite of the benefits of large-scale operations, small firms continue to exist. How far do you agree with this statement? (2) 2. The Purchasing Function: Explain the main functions of the Purchasing Department. (1) Mention two important departments with which the purchasing department needs (iii) To keep a constant/regular links. (1) (iv) What are the main characteristics that the Purchasing Department needs to consider when coming to choose suppliers? (2) Discuss the advantages and disadvantages of having one supplier. (2) (v) List some advantages and disadvantages of having more than one supplier (2) (vi) Explain the term stock in relation to business and why it is so important for the purchasing department. (2) 3. Location of Industry & The Production Department Why the decision where to locate the business is considered very important? (2) List four important factors that influence the decision where to locate business. (2) (iii) How can the Government help industry? (2) (iv) Write a short note to explain the following used in the Production Department: (2) (a) Quality Control (b) Quality Assurance (c) Total Quality Management (TQM) (d) Quality Circles (iv) Why the Production Department needs a strong links with all other major departments of the firm? (2) 4. The Business Environment What do you understand by economic activity? (1) List another term to explain the difference between Direct and Indirect Production (1) (iii) Money is a Medium of Exchange. How far do you agree with this statement? (2) (iv) List the main differences between specialization by process and specialization by product and give a practical example of each type. (2) (v) Discuss the main advantages and disadvantages of specialisation. (4) You need to write down at least two of each. Kulleġġ San Benedittu - Kirkop Page 10 of 10