2023

• 1 (a) Which one of the following could market mapping be used for?(1)Select one answer.

  A Identifying how many customers there are in a marketB Identifying how many employees work in a businessC Spotting where there is a gap in the marketD To identify the location of a business

  ✅ C Spotting where there is a gap in the market
• 1 (b) Which one of the following is an impact of a decrease in interest rates?(1)Select one answer.

  A Businesses will borrow less moneyB Customers will borrow less moneyC Customers will borrow more moneyD Repayments on loans should go up

  ✅ C Customers will borrow more money
• 1 (c) Explain one advantage of starting a business as a private limited company.(3)

  An advantage of starting as a private limited company is limited liability. This means the owners are only responsible for the business debts up to the amount they invested, reducing personal financial risk.
• 2 (a) Which two of the following are examples of customer needs?(2)Select two answers.

  A ChoiceB ProfitC QualityD RiskE Taxation

  ✅ A Choice✅ C Quality
• 2 (b) Which two of the following are roles of an entrepreneur?(2)Select two answers.

  A Going to universityB Organising resourcesC Personal satisfactionD Taking risksE To be a sole trader

  ✅ B Organising resources✅ D Taking risks
• 2 (c) Using the information in Table 1, calculate the decrease in the break even level of output.(2)

  Original contribution per unit = £5.00 - £2.50 = £2.50New contribution per unit = £6.50 - £2.50 = £4.00Original break even = £10,000 ÷ £2.50 = 4,000 unitsNew break even = £10,000 ÷ £4.00 = 2,500 unitsDecrease = 4,000 - 2,500 = 1,500 units
• 2 (d) Explain one way a small business could become more competitive.(3)

  A small business could become more competitive by lowering its prices. This could attract more customers away from rivals, increasing its market share.
• 3 (a) Which two of the following are external stakeholders?(2)Select two answers.

  A EmployeesB SuppliersC OwnersD CustomersE Managers

  ✅ B Suppliers✅ D Customers
• 3 (b) Which two of the following are fixed costs?(2)Select two answers.

  A Fuel for delivery vansB PackagingC InsuranceD RentE Wages for shop workers

  ✅ C Insurance✅ D Rent
• 3 (c) Using the information in Table 2, calculate the total variable costs.(2)

  Variable cost per unit = £3.50Output = 4,000 unitsTotal variable costs = 4,000 × £3.50 = £14,000
• 3 (d) State one method of primary market research.(1)

  ✅ Questionnaire
• 3 (e) Explain one disadvantage to a small business of using overdrafts as a source of finance.(3)

  A disadvantage of using an overdraft is high interest rates. This increases costs for the business if they borrow for a long time, making it an expensive form of finance.