Questions on profile one - Part II
Yvonne Harvey, Contributor

Students from Petersfield High School in Westmoreland prepare for the Principles of Business examinations, recently. - Junior Grandison Photo

HELLO AGAIN. I hope you did your homework in preparation for this week's lesson. Good. Now compare what you have as the answer to the question, with the discussions and guidelines that I will provide for you. For those of you who missed last week's lesson, we are looking at CXC Past Paper ­ January 2005 (General), Question 1.

(a) Bartering is done through the direct exchange of goods for goods, goods for service or service for
service, without the use of money.

(b) Any TWO disadvantages of bartering can be highlighted as the problems associated with bartering e.g. double coincidence of wants and the problem of unequal values.

(c) With the use of money there is no need for double coincidence of wants i.e. there is no need to find someone who has what you want and wants what you have, since you just buy what you want.

Money also has small denominations to purchase items of small value and larger denominations to purchase items of larger value. This means that the exchange of items of unequal values will no longer exist.

(d) In a money economy, money is used as a MEDIUM OF EXCHANGE. Each individual sells what they have for money and then uses the money to purchase what they want.

Exchange is therefore indirect, rather than direct as in bartering.

Now let's move on to another question. CXC past paper May/June 2003 (General),
Question 1.

(a) List TWO functions of a business. (2 marks)

(b) Briefly describe TWO of the following types of business organisations:

(i) Partnership
(ii) Public Limited Company
(iii) Co-operative (4 marks)

(c) State TWO advantages which the Public Limited Company has over the Partnership type of business. (4 marks)

Total 10 marks.

DISCUSSION AND GUIDELINE ANSWER

(a) Any TWO functions of a business can be listed e.g.to sell goods and services to satisfy people's wants and to provide employment for people. Expansion on and explanation of the functions is not required.

(b) The TWO types of businesses can be described by defining them and /or outlining their features or characteristics. For e.g. in describing the partnership one might say that a partnership is formed with two to 20 members who pool their resources together to run a business with a view to making a profit.

Partnerships are normally required to sign a Deed of Partnership and register with the Registrar of Companies.

(c) The advantages which the Public Limited Company has over the Partnership type of business includes the fact that:

* A larger number of part owners, since the Public Limited Company has a minimum of seven shareholders and no maximum.

* More capital can be raised than in a partnership since an appeal can be made to the general public through the Stock Exchange.

* The Public Limited Company is a separate entity from the shareholder owners, therefore, the individual shareholders cannot be sued, the company must be sued.

* The Public Limited Company has a Board of Directors elected by the shareholders.

* These companies may enjoy economies of scale.

* Risk is spread over many shareholders.

Remember, you are asked to state only TWO advantages of the Public Limited Company over the Partnership.

NEXT WEEK WE WILL LOOK AT A QUESTION ON CONTRACTS

This is quite a popular area for questions in Principles of Business. We will consider a 20 marks question. Revise the topic well so that you can write your own outline to the question before considering mine. For those of you who have access to past papers, you can look at the question May/June 2003 Section Two, Question 5.

Have a good week. Bye.

* Yvonne Harvey teaches at Glenmuir High School.