(For Both School and Private Candidates)

Time: 3 Hours Year: 2006


1. For each of the items (i) — (x) choose the correct answer from among the given alternatives and write its letter beside the item number.

(i). Which of the following activities is outside the study of commerce?

  1. Trade
  2. Banking
  3. Advertising
  4. Agriculture
  5. Warehousing
Choose Answer :

(ii) The following may not be classified as variable cost of production:

  1. Rent of land and building
  2. Wages and salaries of labour
  3. Cost of raw materials
  4. Cost of power supplies 
  5. Prime cost
Choose Answer :

(iii) Composite demand occurs where:

  1. a commodity, especially raw materials, serves more than one purpose.
  2. the demand for two commodities is linked together.
  3. two commodities may fairly good substitute for one another.
  4. a change in the demand for one commodity is the result of a change for another.
  5. there is a competitive demand.
Choose Answer :

(iv)An agent authorized to sell goods on commission at public is called:

  1. Commission agent
  2. Auctioneer
  3. Forwarding agent
  4. Broker
  5. Factor
Choose Answer :

(v) Which of the following statements best describes a progressive taxation?

  1. It provides a great incentive to work for high income earner than a flat-rate tax.
  2. It is levied regardless of one's income.
  3. A progressive taxation is one, which falls more heavily on people with low incomes than those with high incomes.
  4. A progressive taxation is one whereby the rate of taxation increases as the income increases.
  5. A progressive taxation is one, which falls more heavily on importers of motor vehicles.
Choose Answer :

(vi)The primary function of an entrepreneur is to:

  1. Manage the production process
  2. Pay for land
  3. Bear the risk and uncertainty
  4. Pay for labour 
  5. Market the product
Choose Answer :

(vii)A clearing house is:

  1. a place where representatives of various banks meet to discuss their mutual problems.
  2. a place where representatives of various banks meet to clear cheques drawn on them by their clients and deposited with other banks.
  3. a place where banks can deposit their money and use them to settle claims from other banks.
  4. a place -where a central bank conducts its affairs for settling ministerial cheques claims.
  5. the house concerned with clearing of cheques and goods imported.
Choose Answer :

(viii)The most outstanding disadvantage of air transport is it's:

  1. Limited number of crew
  2. Frequent maintenance
  3. Limited carrying capacity
  4. Tight timetable
  5. Unsuitable means of transporting vegetables
Choose Answer :

(ix)A quantitative restriction imposed on free flow of international goods is:

  1. Import quota
  2. Import duty
  3. Import tariff
  4. Total ban
  5. Import regulation
Choose Answer :

(x)Money used to start a business is called:

  1. Interest
  2. Savings
  3. Loss
  4. Profit
  5. Capital
Choose Answer :

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