Edexcel GCSE: Business Studies Quiz
19 questions = 36 marks
Questions and Answers
- 1.
Which one of the following is the definition of innovation? Select one answer:
- A.
Bringing a new idea to market
- B.
Taking a calculated risk
- C.
The process of thinking ahead
- D.
Developing competitive advantage
Correct Answer
A. Bringing a new idea to marketExplanation
The definition of innovation is bringing a new idea to market. This involves the creation and implementation of new concepts, products, or services that have not been previously available. Innovation is about introducing something new and different that can potentially disrupt existing markets or create new ones. It requires creativity, problem-solving skills, and the ability to identify opportunities for improvement or change. Bringing a new idea to market can lead to business growth, increased competitiveness, and the potential for societal impact.Rate this question:
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- 2.
Which two of the following are methods of protecting business ideas? Select two answers:
- A.
Franchising
- B.
Limited liability
- C.
Copyright
- D.
Business plan
- E.
Patent
Correct Answer(s)
C. Copyright
E. PatentExplanation
Copyright and patent are two methods of protecting business ideas. Copyright provides legal protection for original creative works, such as books, music, and artwork. It gives the creator exclusive rights to reproduce, distribute, and display their work. Patent, on the other hand, protects inventions and new technologies. It grants the inventor exclusive rights to make, use, and sell their invention for a limited period of time. Both copyright and patent provide legal protection against others copying or stealing the ideas or inventions of a business.Rate this question:
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- 3.
Which three of the following are examples of market segments for a small sports retailer? Select three answers:
- A.
Rival sports retailers in the same area
- B.
Young members of local sports teams
- C.
A questionnaire conducted with customers
- D.
Individuals with interests in specialist sports
- E.
Manager of a local netball team.
- F.
An advertisement in a local newspaper
Correct Answer(s)
B. Young members of local sports teams
D. Individuals with interests in specialist sports
E. Manager of a local netball team.Explanation
The correct answer is Young members of local sports teams, Individuals with interests in specialist sports, and Manager of a local netball team. These three options represent specific market segments that a small sports retailer can target. Young members of local sports teams are likely to be interested in purchasing sports equipment and apparel. Individuals with interests in specialist sports are also a potential market segment as they may have specific needs for equipment related to their chosen sport. The manager of a local netball team can be targeted as they may have a need for team uniforms and equipment.Rate this question:
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- 4.
Which three of the following are the most likely causes of the fall in the price of cocoa? Select three answers:
- A.
Less supply of cocoa by African producers
- B.
Higher demand for cocoa by European chocolate manufacturers
- C.
Increased awareness of the possible dangers of cocoa consumption
- D.
Good harvests of cocoa in producer countries
- E.
Rising consumption of goods for which cocoa is an ingredient
- F.
Greater demand for cocoa substitutes
Correct Answer(s)
C. Increased awareness of the possible dangers of cocoa consumption
D. Good harvests of cocoa in producer countries
F. Greater demand for cocoa substitutesExplanation
The fall in the price of cocoa can be attributed to three main factors. Firstly, the increased awareness of the possible dangers of cocoa consumption has led to a decrease in demand for cocoa products, resulting in a decrease in price. Secondly, good harvests of cocoa in producer countries have led to an increase in the supply of cocoa, causing the price to fall. Lastly, the greater demand for cocoa substitutes has also contributed to the decrease in price as consumers opt for alternative products.Rate this question:
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- 5.
Hayley Franks wants to own and run her own shoe shop. She can set up as a sole trader or as a franchise with a major UK shoe brand. Research shows that the franchise has an 80% success rate. The sole trader has a 50:50 chance of survival. Using the principle of calculated risk, which decision should Hayley make? Select one answer:
- A.
Don’t choose either option as both have a chance of failing
- B.
Choose the franchise as it is the least risky option
- C.
Choose to start as a sole trader as she will keep all profits made
- D.
Choose to start as a sole trader as there is a 50% chance of success
Correct Answer
B. Choose the franchise as it is the least risky optionExplanation
Hayley should choose the franchise as it is the least risky option. This is because the research shows that the franchise has an 80% success rate, which is higher than the 50:50 chance of survival for a sole trader. By choosing the franchise, Hayley is more likely to have a successful business and minimize the risk of failure. Additionally, even though she won't keep all the profits made, the higher success rate of the franchise makes it a more favorable choice.Rate this question:
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- 6.
Hayley decides to produce a business plan to help minimise the risk when starting up her business. Which two of the following would not be necessary to include in her business plan? Select two answers:
- A.
Name and addresses of all employees
- B.
A summary of market research she has carried out
- C.
A cash flow forecast
- D.
Photograph of the business owner
- E.
An overview of the nature of the business
Correct Answer(s)
A. Name and addresses of all employees
D. Photograph of the business ownerExplanation
The name and addresses of all employees and a photograph of the business owner would not be necessary to include in a business plan as they are not directly related to minimizing risk or providing information about the business itself. The other options, such as a summary of market research, a cash flow forecast, and an overview of the nature of the business, are all important components of a business plan that can help minimize risk and provide a comprehensive understanding of the business.Rate this question:
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- 7.
According to the information in the cash flow forecast, which two conclusions can be drawn from the data? Select two answers:
- A.
Total net cash flow for May to June will be £9 000
- B.
A bank would be likely to grant this business an overdraft
- C.
Hayley’s business will make a profit of £13 600 in June
- D.
Other costs’ are forecast to decrease between April to June
- E.
The cash flow for July to December will be positive
Correct Answer(s)
A. Total net cash flow for May to June will be £9 000
B. A bank would be likely to grant this business an overdraftExplanation
Based on the information in the cash flow forecast, two conclusions that can be drawn are:
1. The total net cash flow for May to June will be £9,000. This can be inferred from the data provided in the forecast.
2. A bank would be likely to grant this business an overdraft. This can be deduced from the positive net cash flow and the potential for the business to generate enough funds to cover expenses and repay the overdraft.Rate this question:
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- 8.
Hayley imports all her stock from the USA. What would be two effects on the business if the pound weakened against the dollar by 20%, assuming all other costs and receipts remain the same? Select two answers:
- A.
Fixed costs would increase by 20%
- B.
Total costs would increase
- C.
Hayley could charge a lower price for her shoes
- D.
Raw materials costs would fall by 20%
- E.
The net cash flow position of the business would worsen
Correct Answer(s)
B. Total costs would increase
E. The net cash flow position of the business would worsenExplanation
If the pound weakened against the dollar by 20%, it would result in two effects on Hayley's business. Firstly, the total costs would increase because importing goods from the USA would become more expensive due to the weakened pound. Secondly, the net cash flow position of the business would worsen because the increased costs would reduce the overall profitability of the business.Rate this question:
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- 9.
Job Advertisement Trainee Accountant Hammills Accountants are looking to appoint a young trainee accountant. Candidates should have 5 GCSEs at A*-C, including Maths and English, plus at least two A-Levels at grade C or higher. Experience is desirable but not essential as full training is given. The successful candidate must be aged between 18 and 25 and will be expected to work as part of a team. Applicants should not have any record of illness in the previous 12 months. Hammills Accountants received nine applications for the post. Two candidates – Amandeep and David – were shortlisted for interview. David arrived at the interview in his wheelchair. Following the interview the owner of the business decided to appoint Amandeep, even though her qualifications were not as good as David’s. The owner felt that Amandeep did better in the interview. He was also worried that David’s wheelchair would put him at a disadvantage. Which two of the following broke employment legislation in this recruitment process? Select two answers:
- A.
Requiring candidates to have specific qualifications
- B.
Not appointing the candidate with the best qualifications
- C.
Rejecting David due to his disability
- D.
Advertising for a trainee accountant aged between 18 and 25
- E.
Stating that experience is desirable
Correct Answer(s)
C. Rejecting David due to his disability
D. Advertising for a trainee accountant aged between 18 and 25Explanation
The two actions that broke employment legislation in this recruitment process are rejecting David due to his disability and advertising for a trainee accountant aged between 18 and 25. Rejecting David based on his disability is a violation of the Equality Act, which prohibits discrimination based on disability. Advertising for a specific age range is also discriminatory, as it excludes individuals outside of that age range from applying for the position.Rate this question:
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- 10.
When recruiting staff employers need to ensure they find someone with the right skills and attitudes. Which two of the following are examples of the employee attitudes that might be desirable for Hammills? Select two answers:
- A.
A willingness to undertake training
- B.
Having experience of similar work
- C.
Being able to operate different office equipment
- D.
Having a range of academic qualifications
- E.
Being prepared to work as part of a team
Correct Answer(s)
A. A willingness to undertake training
E. Being prepared to work as part of a teamExplanation
Employers often look for candidates who are willing to learn and develop their skills, which is reflected in their willingness to undertake training. Additionally, employers value employees who can work well with others and contribute effectively in a team, making being prepared to work as part of a team another desirable attitude.Rate this question:
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- 11.
Some businesses produce goods whilst others produce services. Which two of the following are examples of goods? Select two answers:
- A.
A bus journey
- B.
Freshly-prepared sandwiches
- C.
A newspaper
- D.
Haircut
- E.
Computer repairs
Correct Answer(s)
B. Freshly-prepared sandwiches
C. A newspaperExplanation
Freshly-prepared sandwiches and a newspaper are examples of goods because they are tangible products that can be physically consumed or used. A bus journey, a haircut, and computer repairs, on the other hand, are examples of services because they are intangible actions or tasks performed for the benefit of the consumer.Rate this question:
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- 12.
Andrew Plant lost his job as a fitness instructor at a local gym. He always wanted to run his own business. He was keen to use his interest in cooking. Andrew had a talent for producing high quality desserts. He decided to set up a business, with three friends, as a private limited company supplying desserts to local restaurants. Identify two advantages to Andrew of setting up as a private limited company rather than starting as a sole trader. Select two answers:
- A.
The potential to raise more finance
- B.
All profits will go to Andrew
- C.
Andrew has total control of the business
- D.
Less risk due to limited liability
- E.
Fewer legal requirements
Correct Answer(s)
A. The potential to raise more finance
D. Less risk due to limited liabilityExplanation
Setting up as a private limited company allows Andrew to have the potential to raise more finance compared to being a sole trader. This is because a private limited company can issue shares to investors and attract capital from a wider range of sources. Additionally, by setting up as a private limited company, Andrew can benefit from limited liability. This means that his personal assets are protected in case the business incurs any debts or legal issues, reducing the risk he faces compared to being a sole trader.Rate this question:
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- 13.
Which one of the following sources of finance would be most appropriate in starting a private limited company? Select one answer:
- A.
Retained profit
- B.
Share capital
- C.
Overdraft
- D.
Sale of business assets
Correct Answer
B. Share capitalExplanation
Share capital would be the most appropriate source of finance in starting a private limited company because it involves raising funds by issuing shares to shareholders. This allows the company to generate capital from external investors, which can be used to fund initial expenses, purchase assets, and cover operating costs. By selling shares, the company can also distribute ownership and control among shareholders, providing a long-term and stable source of finance for the company's growth and development.Rate this question:
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- 14.
A business has the following cost and price information: Variable Costs: Raw materials – £2.70 per unit Packaging – £1.20 per unit Delivery – £0.50 per unit Fixed Costs: £450 per month The selling price for each unit of output is £10 The business produces 500 units in one month. What is the total monthly value of variable costs? Select one answer:
- A.
£4.40
- B.
£454.40
- C.
£1 350
- D.
£2 200
Correct Answer
D. £2 200Explanation
The total monthly value of variable costs can be calculated by multiplying the cost per unit of each variable cost (raw materials, packaging, and delivery) by the number of units produced. The cost per unit for raw materials is £2.70, for packaging is £1.20, and for delivery is £0.50. Therefore, the total monthly value of variable costs is (2.70 + 1.20 + 0.50) * 500 = £2,200.Rate this question:
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- 15.
A business has the following cost and price information: Variable Costs: Raw materials – £2.70 per unit Packaging – £1.20 per unit Delivery – £0.50 per unit Fixed Costs: £450 per month The selling price for each unit of output is £10 If the business sells 500 units but its fixed costs rise by £200, what is its monthly profit? Select one answer:
- A.
£2 150
- B.
£2 350
- C.
£2 550
- D.
£2 600
Correct Answer
A. £2 150Explanation
The monthly profit can be calculated by subtracting the total costs from the total revenue.
Total variable costs for 500 units = (2.70 + 1.20 + 0.50) * 500 = £2,650
Total fixed costs = £450 + £200 = £650
Total costs = Total variable costs + Total fixed costs = £2,650 + £650 = £3,300
Total revenue for 500 units = Selling price per unit * Number of units sold = £10 * 500 = £5,000
Monthly profit = Total revenue - Total costs = £5,000 - £3,300 = £1,700
Therefore, the monthly profit is £1,700.Rate this question:
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- 16.
The business is looking at ways of raising awareness of a new product. Which element of the marketing mix would it use? Select one answer:
- A.
Price
- B.
Product
- C.
Promotion
- D.
Place
Correct Answer
C. PromotionExplanation
The business would use the element of promotion to raise awareness of a new product. Promotion involves activities such as advertising, public relations, and sales promotions to communicate and promote the product to the target market. This element helps create awareness, generate interest, and persuade potential customers to try the new product.Rate this question:
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- 17.
Hardacres is a small family-run hardware business. It has one shop which provides a range of household equipment. The business has taken out a bank loan of £25 000 in order to carry out improvements to the shop. The bank charges Hardacres an interest rate of 8.5% on the loan. Hardacre’s has a large number of customers who regularly return to shop at the store. This is an example of: Select one answer:
- A.
Market mapping
- B.
Repeat purchase
- C.
Customer service
- D.
Business offering
Correct Answer
B. Repeat purchaseExplanation
The fact that Hardacres has a large number of customers who regularly return to shop at the store indicates that they have a high rate of repeat purchase. This means that customers are satisfied with their previous purchases and continue to choose Hardacres for their household equipment needs. This is a positive indication of customer loyalty and the quality of the business's products or services.Rate this question:
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- 18.
The bank increases the rate of interest on Hardacres loan to 10.5%. Identify two effects of this change on the business. Select two answers:
- A.
An increase in cash outflows
- B.
Higher National Insurance payments
- C.
Lower variable costs
- D.
Higher fixed costs
- E.
Lower Value Added Tax (VAT) payments
Correct Answer(s)
A. An increase in cash outflows
D. Higher fixed costsExplanation
When the bank increases the rate of interest on the loan, it means that the business will have to pay more interest on the loan, resulting in an increase in cash outflows. Additionally, higher interest rates can also lead to higher fixed costs for the business, as it may become more expensive to borrow money for investments or expansion.Rate this question:
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Mar 20, 2023Quiz Edited by
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May 14, 2013Quiz Created by
Leeaaronbaker
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