(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 :

2. Match the items in list A with the responses in list B by writing the letter of the correct response beside the item number.


(i) A place where goods are loaded and off-loaded

(ii) An import duty calculated and levied according to the monetary value of goods imported.

(iii) Traders sitting next to a common bus stop, a market place or a public hall selling small items.

(iv) Sells goods for cash at the lowest possible price.

(v) An instruction given by a customer to the bank to pay debts with regular amount from his/her accounts to a specific person or firm.

(vi) Are speculators who buy new shares when they are issued, in the hope that their will immediately rise so that they can be sold on the stock exchange at a profit.

(vii)Has a drawback of double coincidence of wants.

(viii)A risk taker who combines other factors of production for the purpose of production.

(ix)A document that shows the amount of goods which are in a warehouse for a particular importer.

(x)An economic situation whereby prices of commodities keep on rising.


A. Barter trade K. Road side traders
B. Entrepreneur L. Dumping deflation
C. Discount store M. Bonded warehouse
D. Unit of carriage N. Bears
E. Hawker O. Stags
F. Sole trader P. Postal order
G. Advalorem duty Q. Bulls
H. Specific duty R. Inflations
I. In-bond notes s. Standing order
J. Terminal

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3. Write short notes on the following:


(b)Letter of credit


(d)Supply schedule


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4, Nipendeze shop ordered school shirts for primary school pupils from a wholesale supplier. It normally takes 10 days to receive a consignment from the date of sending an order.

The shop's daily sales stand at 100 shirts and maintain a minimum stock of 200 shirts. Calculate the shop's order point.

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5. Differentiate between the following:

(a) Direct tax and indirect tax

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(b) Capital owned and capital employed.

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6,(a) Define partnership deed.

(b) Mention five (5) contents of partnership deed.

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7.(a) What is privatization?

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(b) Briefly explain any four (4) benefits and shortcomings of privatization in Tanzania.

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8.What are the factors that determine the effectiveness of transport?

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9.Define warehousing.

(b) Discuss the importance of warehousing in commerce.

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10.(a) Briefly explain the function of advertising.

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(b) What factors should be considered when choosing the medium of advertising?

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