OFFICE OF THE PRESIDENT, REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT

SECONDARY EXAMINATION SERIES

MID TERM EXAMINATION

BUSINESS STUDIES FORM ONE

MARCH-APRIL-2025

TIME: 2HRS 30 MIN

INSTRUCTIONS.

1. This paper consist of section A, B, and C with total of 10 questions.

2. Answer all questions

3. Section A carry fifteen 15 marks, section B seventy 70 marks and fifteen 15 marks in section C.

4. All answers must be written in the spaces provided.

5. Write your Assessment number / Name at the top right hand corner of every page

SECTION A: 15 MARKS

1. For items (i)-(x) choose the correct answer from alternatives given and write the correct answer in spaces provided.

(i)Deborah owns a soft drinks business. What form of business unit is this?

A) Sole proprietorship   

B) Company

C) Limited liability partnership

D) Partnership

(ii) The following are the characteristics of sole proprietorship EXCEPT:

A) Controlled by the owner  

B) High start-up capital  

C) Owner takes all the risks  

D) The business assets are not legally separated from the owner’s assets  

(iii) What is a key advantage of a sole proprietorship?

A) Easy to form a business  

B) Limited liability of the owner

C) Separate legal entity status

D) Limited skills

(iv) In a sole proprietorship context, what does unlimited liability mean?

A) The proprietor can invest unlimited amount of money in the business

B) The business has unlimited potential for expansion

C) The proprietor’s personal assets are at risk in case the business incurs liabilities  

D) The proprietor is responsible for registering the business

(v) Which among the following businesses is a form of sole proprietorship?

A) Coffee shop owned by Asha, Mary, and Adam

B) Mobile company owned by Asha and her friends

C) Butcher owned by Adam  

D) Salon owned by a Tanzanian and an American

(vi)A sole proprietorship is the most ______ form of business ownership.

A) complex

B) common  

C) expensive

D) structured

(vii) Mwanaidi is a student who has a talent for designing clothes. She decides to start a small business where she designs and sells her own clothing. This involves purchasing fabric, using her sewing skills to create the clothes, and then selling them to customers. Which business processes are demonstrated by Mwanaidi’s activities?

A)  Production and consumption

B)  Distribution and exchange

C)  Production and exchange

D)  Consumption and distribution

(viii) Baraka has saved some money and is thinking about how to use it. He can either invest in a small business venture or put the money in a savings account. If he chooses to start the business, he will have to give up the interest he would have earned in the savings account. What economic concept does this illustrate?

A)  Scarcity

B)  Opportunity cost

C)  Needs and wants

D)  Consumption

(ix) Shukuru is considering starting a business selling school shoes. Her father has given her TShs 4,000,000 to begin, but she is currently employed in the beverage industry earning TShs 150,000 per month. What is the opportunity cost of Shukuru’s decision to start the shoe business?

A)  TShs 4,000,000

B)  The potential profit from the shoe business

C)  TShs 150,000 per month

D)  The cost of goods for the shoe business

(x) Which of the following is a disadvantage of a sole proprietorship?

A) Easy to form

B) Direct relations with customers

C) Unlimited liability  

D) Enjoys all the business profit

2. Match the terms in Column A with their correct definitions in Column B.

SECTION B. 70 MARKS. ANSWER ALL QUESTIONS

3. (a) What is a sole proprietorship?   

(b) List three examples of sole proprietorships.  

4. (a) What does unlimited liability mean in the context of a sole proprietorship?  

(b) State three advantages of a sole proprietorship.  

5. (a) Mention three disadvantages of a sole proprietorship.  

(b) How can a sole proprietor solve the challenge of unlimited liability?  

6. Why is succession planning important for a sole proprietorship?   

7. What is the main goal of a business?

8. Define ‘opportunity cost’ and give an example.

9. (a) Why is it important to study Business Studies?

(b) How does Business Studies relate to Mathematics?

SECTION C. 15 MARKS. ANSWER QUESTION 10

10. Explain the contributions of sole proprietorship to development of Tanzania economy