2024

• 1 (b)

  Question:Which one of the following is a definition of insolvency? (1)Select one answer:A Business failure due to unpaid debtsB Credit offered by suppliersC The cost of borrowing moneyD When two businesses join together

  Answer:✅ A Business failure due to unpaid debts
• 1 (c)

  Question:Explain one disadvantage of starting a business as a partnership. (3)

  Answer (example):One disadvantage is that profits have to be shared between partners. This means each partner will get a smaller amount of the total profits than if they were a sole trader.
• 1 (a)

  Question:Which one of the following is a way of segmenting a market? (1)Select one answer:A CostB IncomeC MediaD Profit

  Answer:✅ B Income
• 1 (d)

  Question:Explain one benefit to a small business of having a USP. (3)

  Answer (example):A USP makes a product stand out from competitors, so customers are more likely to choose it, leading to increased sales.
• 1 (e)

  Question:Analyse the impact on a small business of receiving a poor review online. (6)

  Answer (example):A poor review online could damage the business’s reputation. Customers may read the review and decide not to buy from the business, which could lower sales revenue. In the long term, this might reduce profits and affect the survival of the business, especially if customers spread negative word of mouth.
• 2 (a)

  Question:Which two of the following could be used to collect secondary market research? (2)Select two answers:A Focus groupB InternetC Market reportsD ObservationE Survey

  Answer:✅ B Internet✅ C Market reports
• 2 (b)

  Question:Which two of the following are covered by employment law? (2)Select two answers:A Consumer rightsB DiscriminationC Health and safetyD Product qualityE Taxation

  Answer:✅ B Discrimination✅ C Health and safety
• 2 (c)

  Question:Using the information in Table 1, calculate the total costs for the small business. (2)

  Table 1 info:Fixed costs = £7,500Variable cost = £2 per unitOutput = 5,000 units

  Answer:Variable costs = 5,000 × £2 = £10,000Total costs = £7,500 + £10,000 = £17,500
• 2 (d)

  Question:Explain one disadvantage to a small business from using retained profit for expansion. (3)

  Answer (example):A disadvantage is that using retained profit reduces the amount of money available for other uses, such as covering emergencies or reinvesting in other parts of the business.
• 2 (e)

  Question:Explain one advantage of opening up a business as a franchise. (3)

  Answer (example):An advantage is that the franchisee gets support from the franchisor, such as training and marketing, which reduces the risk of business failure.
• 3 (a)

  Question:Which one of the following is a financial aim for a new business? (1)Select one answer:A ChallengeB IndependenceC Personal satisfactionD Survival

  Answer:✅ D Survival
• 3 (b)

  Question:Using the information in Figure 1, calculate the margin of safety for August. (2)

  Figure 1 info:Break-even = 5,000 unitsActual sales in August = 6,800 units

  Answer:Margin of safety = Actual sales – Break-even= 6,800 – 5,000= 1,800 units
• 3 (c)

  Question:Explain one disadvantage to a small business from an increase in unemployment. (3)

  Answer (example):An increase in unemployment means people have less disposable income to spend, so a small business may experience lower sales.
• 3 (d)

  Question:Explain one benefit to Keilan from producing a business plan for Adikoggz. (2)

  Answer (example):A business plan can help Keilan secure finance, because banks and investors can see how the business plans to operate and make a profit.