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FORM TP 2014230

TESTCODE02233010
MAY/JUNE 2014

CARIBBEAN

EXAMINATIONS

COUNCIL

CARIBBEAN ADVANCED PROFICIENCY EXAMINATION

MANAGEMENT OF BUSINESS

Unit 2- Paper 01
1 hour 30 minutes
( 27 MAY 2014 (a.m.) )
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1.

This test consists of 45 items. You will have 1 hour and 30 minutes to answer them .

2.

In addition to this test booklet, you should have an answer sheet.

3.

Do not be concerned that the answer sheet provides spaces for more answers than there are
items in this test.

4.

Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to answer and decide which choice is best.

5.

On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.
Sample Item
Which of the following actions CANNOT be taken by a trade union?
Sample Answer
(A)
(B)

(C)
(D)

Picket
Strike
Go slow
Lock out

The best answer to this item is "Lock out", so answer space (D) has been shaded.

i iiiiii

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6.

If you want to change your answer, be sure to erase it completely before you fill in your new
choice.

7.

When you are told to begin, turn the page and work as quickly and as carefully as you can.
If you cannot answer an item, omit it and go on to the next one. Your score will be the total
number of correct answers.

8.

You may do any rough work in this booklet.

9.

You may use silent non-programmable calculators to answer questions.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

Copyright 2011 Caribbean Examinations Council

All rights reserved.
02233010/CAPE 2014

-2-

1.

The term 'modularization' refers to the

(A)
(B)

(C)
(D)

6.

last stage of product development

sharing of common data and.
processes
designing of products in sections
and components
small scale production for
mechanical and electronic
devices

Which of the following is a disadvantage

of job production?
(A)
(B)

(C)
(D)

2.

The type of forecast that projects a

company's sales over a period oftime can
be classified as
(A)
(B)

(C)
(D)

3.

demand
technical
economic
production

7.

(A)
(B)

(C)
(D)

recruitment and selection of

workers
number of workers who enter a firm
rate of redundancy in an organisation
rate at which workers enter and
leave an organization

By introducing a new design in an effort

to make a product more efficient while
maintaining or increasing consumer appeal,
a manufacturer is actually adding
(A)
(B)
(C)
(D)

The term ' Labour turnover ' may BEST be

defined as the

8.

(B)

Which of the following techniques would

improve quality in a business without
directly involving the business' employees?
(A)
(B)

(C)
(D)

Kaisen
Outsourcing
Quality circles
Research and Development

(C)
(D)

9.

The term 'productivity ' is BEST defined as

the
(A)
(B)

(C)
(D)

level of output of goods

amount of goods manufactured
rate of production of goods in a firm
ratio of the scale of production to
a level of irwut

Profit per employee

Sales per employee
Output per machine
Output per employee

Which of the following are advantages of

a Just-in-Time Production System?
I.

5.

cost
value
viability
competition

Which of the following is the MOST

appropriate method for measuring efficiency
ofproduction ina capital-intensive industry?
(A)

4.

Labour costs will be high if

production is labour intensive.
Workers tend to be less motivated
because of repetition of work.
It is not possible to offer a wide
variety of goods to meet
consumers ' needs.
There will be high levels of stock
in the form of unfinished goods
at each stage of the process.

II.
III.

(A)
(B)

(C)
(D)

Better work flow

Reduced inventory and set-up time
Quick responses to changes in
demand
I and II only
I and III only
II and III only
I, II and III

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02233010/CAPE 2014

-310.

11 .

Which of the following layouts is MOST

suitable for the printing of primary school
textbooks?
(A)
(B)
(C)
(D)

A product is measured by its conformity to

(A)
(B)
(C)
(D)

Process
Cellular
Production
Fixed position

product standards
producers' standards
a variety of features
customer expectations

Item 12 refers to the network diagram below.

E

3IF

D
4
12.

Which ofthe following is the MOST appropriate method for measuring efficiency of production
in a capital-intensive industry?
(A)
(B)
(C)
(D)

13.

Which of the following forecasting

techniques uses a group process that allows
experts to make forecasts?
(A)
(B)
(C)
(D)

14 .

.l

Output per machine

Sales per employee
Profit per employee
Output per employee

Delphi method
Consumer surveys
Sales force composite
Least square regression

Which ofthe following is NOTa dimension

of quality?
(A)
(B)
(C)
(D)

15.

Reliability
Durability
Affordability
Conformance,

The fact that an employee can quickly

remove and replace the ink cartridge of
a printer is a result of the design strategy
known as
(A)
(B)
(C)
(D)

16 .

integration
disassembly
miniaturization
modularization

A segment of the population selected to

representthe population as a whole is called
(A)
(B)

(C)
(D)

a census
a survey
a sample
an experiment

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0223301 0/CAPE 2014

-417.

'Perfume Palace ' recently sent its sales staff

into nearby districts to distribute leaflets
offering discounts and buy-one-get-one free
on several of its products. This marketing
action is BEST described as
(A)
(B)
(C)
(D)

22.

Which of the following is NOT a function

of the marketing communication of a
company?
(A)

publicity
personal selling
sales promotion
media advertising

(B)

(C)
(D)

18.

Penetration pricing refers to

(A)
(B)

(C)
(D)

19.

23.

The pricing method that uses the buyer's

point of view regarding the worth of a
product is called
(A)
(B)
(C)
(D)

cost-plus pricing
going-rate pricing
break-even pricing
value-based pricing

Item 24 refers to the following diagram of

a Product Life Cycle.

Uniformity
Intangibility
Perishability
Inseparability

Sales
$

III

IV

The collection of businesses and products

held by a company is known as
(A)
(B)
(C)

(D)

21.

adding a percentage of profits to

the total cost
following the pricing strategies of
the market leader
charging more than competitors for
a status product
reducing the price of a product to
attract customers

Which of the following is NOT a

characteristic of a service?
(A)
(B)
(C)
(D)

20 .

Differentiating its product or

service
Informing about its products and
services
Stimulating demand for its products
and services
Informing about competitors'
products and services

strategic planning
portfolio analyses
a business portfolio
a strategic business unit

When a business sets very low prices,

which of the following pricing objectives
is it seeking to achieve?
(A)
(B)
(C)

(D)

24.

What stage of the product is indicated by

III?
(A)
(B)
(C)

(D)

Growth
Decline
Maturity
Introduction

Business survival
Market share leadership
Product quality leadership
Current profit maximization

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,_

-525.

Which of the following variables is the

EASIEST to measure?
(A)
(B)

(C)
(D)

26.

(C)
(D)

27 .

Geographic
Behavioural
Demographic
Psychographic

At which stage of the product life cycle

does a product experience rapid market
acceptance and increasing profits?
(A)
(B)

(C)
(D)

(B)

(C)
(D)
31.

32.

Observations, experiments, focus groups

and surveys are all examples of
(A)
(B)

(C)
(D)

29 .

The type of sampling whereby every

member of the population has a known
chance of selection is called
(A)
(B)

(C)
(D)

probability sampling
non-random sampling
convenience sampling
non-probability sampling

(C)
(D)

34 .

High energy level

Fear of the unknown
Internal locus of control
Tolerance for ambiguity

Small firms that are organized as sole traders

may find it difficult to access much needed
capital mainly because
(A)
(B)

desk research
test marketing
primary research
secondary research

Cash
Sales
General
Purchases

Which of the following is NOT a

characteristic of a successful entrepreneur?
(A)
(B)
(C)
(D)

Core
Actual
Hybrid
Augmented

Retailer
Distributor
Wholesaler
Commission agent

John, a small business operator, IS

organizing his financial records . In
recording transactions, the accounts of
his creditors are placed in which of the
following ledgers?
(A)
(B)
(C)
(D)

33.
28.

A consumer goods manufacturer who used

a one-level channel is MORE likely to be
using which types of intermediary?
(A)

Growth
Maturity
Introduction
Product development

In addition to selling appliances, Delmar 's

Furniture Ltd offers delivery, installation
and repair services, warranties, showrooms
and waiting areas . Which of the following
types of product BEST describes this offer?
(A)
(B)

30 .

they do not have limited liability

their workforce is usually inefficient
they do not keep accurate records
of their activities
customers prefer to purchase goods
from larger firms

Which of the following documents of a

'start-up' business would beofGREATEST
interest to a commercial bank?
(A)
(B)
(C)
(D)

Balance Sheet
General Journal
Income Statement
Cash flow Statement

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02233010/CAPE 2014

-635.

One primary risk associated with bonds is

(A)
(B)
(C)
(D)

36.

Shelly has recently acquired an inheritance.

She has always wanted to establish her own
mini-mart and finally has the necessary
finances . However, she is undecided
whether to start her own or purchase an
existing one which is for sale in her town.

investment
interest rate
loan payment
insurance premium

The Intellectual Property Rights provision

that covers areas relating to musical pieces
and technical drawing is called
(A)
(B)
(C)
(D)

37.

Items 39-40 refer to the following scenario.

39.

(A)
(B)
(C)
(D)

patent
copyright
trademark
industrial design

The term 'entrepreneurship' is BEST

defined as
(A)
(B)
(C)
(D)

40.

(C)
(D)

Patents represent a strategic asset to a

business by
(A)
(B)
(C)
(D)

shorter start-up time

poor reputation of the business
the need to register the business
existing structure ofthe business

By conducting sales forecasting, an

entrepreneur is seeking to determine
(A)
(B)
(C)

protecting an innovative new

product
advertising an innovative new
product
reducing the cost of an innovative
new product
allowing another business to copy
an innovative new product

requires less finance

has existing customers
will be more profitable
will be easier to manage

One risk that Shelly might encounter is

(A)
(B)

accessing capital
making profits at all cost
identifying the factors of production
using scarce resources to establish
business entities
41.

38.

One MOST likely advantage to Shelly of

buying the existing business is that it

(D)

how much of a product will be sold

how successful the business will be
if there is sufficient demand for a
product
if the product will be popular
among the users

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02233010/CAPE 2014

,_

-7Items 42-43 refer to the following scenario.

44.

Mrs Chang has recently opened a small

restaurant. At the end of the first week of
operations, she realises that she does not
have sufficient cash to pay her two workers.

!
\

42 .

The MAIN benefit of e-commerce to the

entrepreneur is
(A)
(B)
(C)
(D)

The scenario above illustrates a

(A)
(B)
(C)
(D)

high gearing position

low rate of stock turn
low return on investment
working capital deficiency

45.

Which ofthe following is anADVANTAGE

of a franchise agreement to a franchisee?
(A)
(B)
(C)

43.

access to a larger market

higher levels of profitability
reduction in production costs
improvement in product quality

The BEST way for Mrs Chang to improve

her situation is to
(A)
(B)
(C)
(D)

(D)

Skilled workforce
High market share
Payment of royalties
A recognised product

seek a bank overdraft

mortgage the restaurant building
sell shares on the stock exchange
approach a bank for a long term
loan

END OF TEST

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

0223301 0/CAPE 2014