GCSE Edexcel Business Studies Unit 1 January 2011

20 Questions | Total Attempts: 435

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GCSE Edexcel Business Studies Unit 1 January 2011

20 questions = 20 marks


Questions and Answers
  • 1. 
    Which one of the following is an example of primary market research? Select one answer:
    • A. 

      Government statistics.

    • B. 

      Newspaper articles.

    • C. 

      Survey of customers.

    • D. 

      Internet research.

  • 2. 
    Which two of the following are key features of enterprise? Select two answers:
    • A. 

      Employing at least one worker.

    • B. 

      Having the right qualifications to run a business.

    • C. 

      Being prepared to take risks.

    • D. 

      Having a willingness to take on new ventures.

    • E. 

      Registering as a private limited company.

  • 3. 
    • A. 

      The cost of the initial investment can be high.

    • B. 

      Franchises have to take out a patent.

    • C. 

      Franchises have to pay a higher rate of Value Added Tax (VAT).

    • D. 

      A lack of freedom for the owner in making decisions.

    • E. 

      It can access help and advice from the franchise owner.

  • 4. 
    • A. 

      £450

    • B. 

      £650

    • C. 

      £800

    • D. 

      £1500

  • 5. 
    The owners of Hancock’s decide to try to increase profit. Which three of the actions below will most likely achieve this, assuming it sells the same number of pots each month? Select three answers:
    • A. 

      Buy cheaper raw materials used to make its products.

    • B. 

      Increase the sales price of an average pot to £11.

    • C. 

      Increase the number of workers employed during the weekend.

    • D. 

      Buy more expensive raw materials used to make its pots.

    • E. 

      Increase advertising expenditure.

    • F. 

      Relocate to cheaper premises.

  • 6. 
    Marcus Borega is a sole trader. His business imports high quality toy cars from the USA. His main customers are collectors and sports car enthusiasts in the UK. The exchange rate is very important for the business. When Marcus started the business the exchange rate was £1 = $2. After one year in business, the exchange rate changed to £1 = $1.70. Marcus decided to keep the prices he charged his customers the same. Identify two possible effects of the change in the exchange rate on the business. Select two answers:
    • A. 

      Lower fixed costs for the business.

    • B. 

      The costs of buying the toy cars from the USA will rise.

    • C. 

      Makes it easier for Marcus to sell his toy cars in the UK.

    • D. 

      Increased added value on each toy car sold by Marcus.

    • E. 

      Marcus will make lower profits on each sale.

  • 7. 
    Marcus used the idea of deliberate creativity to develop his ideas for the business. Deliberate creativity involves which two of the following techniques? Select two answers:
    • A. 

      Starting a business which provides a service.

    • B. 

      Brainstorming business ideas.

    • C. 

      Drawing lists to compare options.

    • D. 

      Producing a cash flow forecast.

    • E. 

      Preparing a business plan.

  • 8. 
    A sole trader has unlimited liability. Identify one disadvantage of unlimited liability for a sole trader such as Marcus. Select one answer:
    • A. 

      The need to pay higher taxes.

    • B. 

      Less control of the business.

    • C. 

      The need to share profit with other shareholders.

    • D. 

      Risk of losing personal possessions.

  • 9. 
    Which two of the following taxes will Marcus have to pay in the course of running his business? Select two answers:
    • A. 

      Corporation tax.

    • B. 

      Distribution tax.

    • C. 

      Income tax.

    • D. 

      Labour tax.

    • E. 

      National Insurance contributions.

  • 10. 
    Mark Steel is a qualified hairdresser looking to set up in business as a sole trader. He has carried out some market research in the town where he lives. There are 11 hairdressing businesses in the town. Mark’s speciality is in creating styles which involve a high degree of skill that adds significant value. Mark’s reputation has been boosted by winning a styling competition in a leading fashion magazine. Mark has produced a market map to identify whether any gaps in the market exist. This is shown below. According to the market map, where is there a gap in the market? A business which provides: Select one answer:
    • A. 

      High price/traditional.

    • B. 

      High price/fashion.

    • C. 

      Low price/traditional.

    • D. 

      Low price/fashion.

  • 11. 
    • A. 

      A

    • B. 

      B

    • C. 

      C

    • D. 

      D

  • 12. 
    In setting up his business Mark knows he will have to take a calculated risk. Which one of the following would be an example of a calculated risk for Mark? Select one answer:
    • A. 

      His fixed costs are 50% of his total costs.

    • B. 

      There is a 40% chance of the business surviving the first year.

    • C. 

      Mark’s variable costs rise by 25% in the first six months.

    • D. 

      10% of his customers will be over 65 years old.

  • 13. 
    Mark is considering different sources of finance to start his business. Which two of the following sources of finance would be most appropriate for Mark to start up his business? Select two answers:
    • A. 

      Personal savings.

    • B. 

      Selling the business’s assets.

    • C. 

      Issuing shares to new shareholders.

    • D. 

      Retained profit.

    • E. 

      Bank loan.

  • 14. 
    Which two of the following are sources of added value for Mark’s business? Select two answers:
    • A. 

      Offering late-night opening appointments.

    • B. 

      Asking customers to complete a questionnaire after their appointment.

    • C. 

      Ensuring he manages cash flow effectively.

    • D. 

      Providing free refreshments and drinks for customers.

    • E. 

      Locating in an area where other hairdressers already operate.

  • 15. 
    Job Advertisement Print Designer Moorland is a small printing business that has a vacancy for a male print designer working as part of a busy team in a well equipped office environment. Applicants must be aged between 18 and 20 and: • have 5 GCSEs at A* – C (including maths and English) • have experience of using Graphix 2302 software • be well organised and able to meet deadlines • be able to work as a member of a team. No wheelchair users need apply. The above was the advertisement that Moorland initially planned to use. One of the managers pointed out that it contained three pieces of information which would break employment legislation. Select three answers:
    • A. 

      Male print designer.

    • B. 

      Having 5 GCSEs at A* – C.

    • C. 

      No wheelchair users need apply.

    • D. 

      Must be aged between 18 and 20.

    • E. 

      Well organised and able to meet deadlines.

    • F. 

      Have experience of using Graphix 2302 software.

  • 16. 
    Person Profile Name: James Grant Qualifications: 5 GCSEs at A* – C (including maths and English) Skills/experience: • Used range of IT during GCSEs. • Used Graphix 2302 software. • Part-time work as a sales assistant in a petrol station. Attitudes (from interview) ‘I’m a ‘people person’…like working with others’ ‘keen to learn and to start at the bottom’ ‘never had a day off at school’ Moorland decided that the job would be offered to James Grant. Using the information, identify the two most likely reasons why James was successful. Select two answers:
    • A. 

      He has a degree in computing.

    • B. 

      Experience of specific software.

    • C. 

      He preferred to work alone rather than in a team.

    • D. 

      Relevant work experience in a print office.

    • E. 

      Positive attitude towards the specific job.

  • 17. 
    The chart shows a rise in the world price of cocoa. Cocoa is a commodity which is used by a range of industries. For chocolate producers cocoa is the main ingredient. Chocolicious is a small business making hand-made chocolates. The market it operates in is very competitive. One source of competitive advantage it holds is in the quality of its chocolates. The owners of Chocolicious are worried by the recent rise in the price of cocoa. Which three factors below are the most likely causes of the rise in price of cocoa? Select three answers:
    • A. 

      Lower demand for cocoa from chocolate producers.

    • B. 

      Increased profits made by cocoa producers.

    • C. 

      News reports suggesting some health benefits from cocoa.

    • D. 

      Greater supply of cocoa by producers.

    • E. 

      Poor weather leading to a poor harvest of cocoa.

    • F. 

      Higher demand for cocoa by chocolate manufacturers.

  • 18. 
    Chocolicious has decided that it needs to change its marketing mix in response to the rising price of cocoa. Which two changes to the marketing mix would you advise, given what is happening in this market? Select two answers:
    • A. 

      Reducing its Corporation Tax payments.

    • B. 

      Producing a new business plan.

    • C. 

      Contacting supermarkets to seek new retailers for its products.

    • D. 

      Making five members of staff redundant to cut costs.

    • E. 

      Using cheaper ingredients in the product.

  • 19. 
    Which two of the following are the most likely explanations for the change in revenue at Chocolicious? Select two answers:
    • A. 

      A rise in variable costs.

    • B. 

      A downturn in the business cycle.

    • C. 

      An improved cash flow position.

    • D. 

      A fall in sales.

    • E. 

      A rise in profits.