Paper 1 (2 Markers)

Question 1

Identify two reasons why a government might support business start-ups

Answer 1

1. Competition
2. Reduce Unemployment

Question 2

Identify two ways a business can build customer relationships

Answer 2

1. Offer good quality products and services
2. Build brand image

Question 3

Define Tertiary sector

Answer 3

Provides services to consumers and businesses.

Question 4

Define ‘laissez-faire’ leadership style

Answer 4

Managers make the broad objectives of the business known to the employees, but the employees are left to make their own decisions and organize their own work.

Question 5

Identify two roles of a manager

Answer 5

1. Planning
2. Organizing

Question 6

Define ‘import quota’

Answer 6

A physical limit on the number of goods that can be imported into a country

Question 7

Identify two benefits to a business of lower rates of taxation

Answer 7

1. Increase in revenue
2. Higher profit margin

Question 8

Define added value

Answer 8

The difference between the total selling price and cost of raw materials and components

Question 9

Define secondary sector

Answer 9

Manufactures goods using raw materials from the primary sector

Question 10

Identify two characteristics of a recession

Answer 10

1. Rise in Unemployment
2. Fall in GDP

Question 11

Define pressure group

Answer 11

Pressure groups are groups of people that act together to try to force businesses or governments into adopting certain policies

Question 12

Identify one cash inflow and cash outflow for a business

Answer 12

Inflow: Sales
Outflow: Wages

Question 13

Identify two factors which might affect the source of finance that businesses may choose

Answer 13

1. Purpose
2. Time Period

Question 14

Define break-even output

Answer 14

Where total revenue is equal to total cost

Question 15

Define inflation

Answer 15

An increase in the general price of goods and services over time

Question 16

Identify two ways technology could change production methods

Answer 16

1. Higher output
2. Automation

Question 17

Identify two responsibilities of supervisors

Answer 17

1. Give tasks to employees
2. Provide feedback

Question 18

Identify two methods of written communcation

Answer 18

1. Letter
2. E-mail

Question 19

Identify two ways legal control could affect marketing strategy

Answer 19

1. Cannot make false claims in advertisements
2. Increased costs on marketing

Question 20

Define quality control

Answer 20

Checking for quality at the end of the production process

Question 21

Define specialization

Answer 21

When people or businesses focus on what they are best at

Question 22

Identify two methods of production

Answer 22

1. Batch
2. Flow

Question 23

Identify two reasons why a business might have cash-flow problems

Answer 23

1. Poor financial planning
2. Too much inventory

Question 24

Identify two factors that might affect the accuracy of market research

Answer 24

1. Age of information
2. Use of AI

Question 25

Identify two benefits to a business using market segmentation

Answer 25

1. Identify gaps in the market
2. Help increase revenue

Question 26

Identify two reasons why a business might offer training to its employees

Answer 26

1. Increase knowledge
2. Improve motivation

Question 27

Identify two ways a business plan can help a business to reduce risk

Answer 27

1. Help secure funding
2. Help set goals

Question 28

Identify two possible reasons why a business might want to expand

Answer 28

1. Increase revenue
2. Increase market share

Question 29

Define diseconomies of scale

Answer 29

Factors that lead to an increase in average costs as a business grows beyond a certain size.