(For Both School and Private Candidates)

Time: 2:30 Hours  Monday, 15th October 2012 p.m.


1. This paper consists of sections A, B and C.

2. Answer all questions in sections A and B and two(2) questions from section C.

3. Calculators are not allowed in the examination room.

4. Cellular phones are not allowed in the examination room.

5. Write your Examination Number on every page of your answer booklet(s).

SECTION A (20 Marks) 

Answer all questions in this section.

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) When a visible imports exceed visible exports, a country is said to have

  1.  a favourable balance of trade
  2.  a favourable balance of payment
  3.  unfavourable balance of trade
  4.  unfavourable balance of payment
  5.  unfavourable balance of payment and trade
Choose Answer :

(ii) Which of the following is the basic feature of all multiple shops?

  1.  Numerous departments.
  2.  High prices of goods sold.
  3.  Similar goods sold in all departments.
  4.  Different goods sold in all departments.
  5.  Goods are sold under one roof.
Choose Answer :

(iii) Consumer goods are best defined as goods that

  1.  are bought and sold in shops 
  2.  are needed for direct satisfaction
  3.  help to produce other goods 
  4.  are consumed by human beings 
  5.  are provided by nature.
Choose Answer :

(iv) A marketing board is a board set up to

  1.  advise co-operatives only
  2.  deal with exports
  3.  buy goods from importers and sell them
  4.  buy products from producers and sell them
  5.  export manufactured goods.
Choose Answer :

(v) Which of the following is the benefit of sole traders over limited companies?

  1.  They have unlimited liability.
  2.  They do not pay VAT.
  3.  They find it easier to raise capital.
  4.  They make decisions quickly.
  5.  They have no risks associated with their personal assets.
Choose Answer :

(vi) Which of the following industries are concerned with obtaining raw materials from natural resources?

  1.  Constructive industries. 
  2. Manufacturing industries.
  3. Building industries. 
  4. Mining industries.
  5. Extractive industries.
Choose Answer :

(vii) Which of the following is NOT necessary for the development of commerce in a country?

  1. Increased industrial production. 
  2. Improved transport system
  3. Direct production of goods. 
  4. Extensive advertising. 
  5. Improved banking system.
Choose Answer :

(viii) The list of documents prepared in the course of commercial transaction in the right order of being raised is

  1. Can be exchanged for gold at the Bank of Tanzania.
  2. Can be tendered in payment of debt
  3. Can be refused by creditor who would prefer a cheque 
  4. Can be printed by any commercial bank. 
  5. Can be printed by any internal bank.
Choose Answer :

(ix) A letter of credit is sent by

  1. exporter’s bank to a correspondent bank
  2. improter’s bank to a correspondent bank
  3. importer to exporter
  4. a central bank to a correspondent bank
  5. importer’s agent to the exporter’s agent.
Choose Answer :

(x) An advalorem tax is an indirect tax collected

  1. per unit of goods regardless of the value
  2. on home produced goods according to the value
  3. directly from consumers’ incomes
  4. on each good according to the value
  5. on goods from abroad according to the value.
Choose Answer :

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


  1. The quantity of a commodity required by buyers.
  2. Increase in the price of one of the products leads to a decrease in demand for the other.
  3. Increase in the price of one of the products leads to an increase in demand for the other.
  4. The demand for commodity due to an increase in the demand for another commodity.
  5. The demand for a commodity that can be used in many ways.
  6. Relationship between the price and the quantity demanded.
  7. The higher the price the lower the quantity demanded.
  8. The sensitivity of demand for a product due to a change in price.
  9. The responsiveness of demand for a product due to changes in incomes of the consumer.
  10. The movement along a demand curve due to commodity price changea
  1. Composite demand
  2. Elasticity of demand
  3. Derived demand
  4. Law of demand
  5. Cross elasticity of demand
  6. Change in quantity demanded
  7. Income elasticity of demand
  8. Demand
  9. Inelastic demand
  10. Demand schedule
  11. Unitary demand
  12. Elastic demand
  13. Joint demand
  14. Inelastic demand curve
  15. Competitive demand

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SECTIONB (40 Marks)

 Answer all questions in this section.

3. The following balances were extracted from the books of Mungiki’s clock business for the year. Opening stock sh. 23 ,000/-, purchases sh. 115,000/-, carriage inwards sh. 3,000/-, purchases returns sh. 18,000/-, sales sh. 200,000/-, sales returns sh. 15,000/-, closing stock sh. 30 ,000/-, current assets sh. 45,000/-, current liabilities sh. 90,000/- and fixed assets sh. 180,000/- , general expenses is 10% of the gross profit. From the above information calculate:

(a) Cost of goods available for sale

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(b) Cost of goods sold

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(c) Gross profit

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(d) Net profit

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(e) Rate of stock turnoverView Ans

(f) Mark up

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(g) Margin

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(h) Working capital

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(i) Capital employed

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(j) Net profit as percentage of sales.

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4. (a) Elaborate four benefits that a consumer may derive from advertising.

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(b) Mr. Manoti is a shift machine operator at a blanket factory. Describe six disadvantages of his work.

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5. (a) (i) What is meant by the Wholesaler?

(ii) Briefly explain the term bill of exchange.

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(b) Explain eight functions of wholesalers.

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6. (a) Describe five advantages of a retailer refusing credit sales to his customers. (b) Explain five reasons behind consumers’ protection.

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SECTION C (40 Marks)

Answer two (2) questions from this section.

7. (a) What is meant by the Public Corporations?

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(b) Public Sectors are important to a developing country like Tanzania. Using concrete examples give five arguments to support that statement.

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(c) How does a retailer selling a pair of shoes assist in the process of production? Give four points.

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8. (a) Discuss five qualities of good money. (b) Elaborate five functions of money.

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9. (a) Discuss eight possible causes of change in supply curve of a commodity.

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(b) (i) Sketch a diagram which shows an increase in supply. (ii) Sketch a diagram which shows a change in quantity supplied.

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10. (a) Evaluate six benefits of marketing to a developing country. (b) Explain three problems faced by home trade.

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