Business Studies Paper 2 November 2013

1. AResponsiveness of demand to a change in promotional spending
2. BResponsiveness of demand to a change in the price of a rival
3. CResponsiveness of supply to a change in promotional spending
4. DResponsiveness of demand to a change in the consumer's income

Answer this when you sit the paper.

1. AExtra promotion raises sales less than proportionately
2. BExtra promotion raises sales more than proportionately
3. CExtra promotion lowers the sales of the firm's own range
4. DExtra promotion has no effect at all on the firm's sales

Answer this when you sit the paper.

1. AA free good
2. BA giffen good
3. CA normal good
4. DAn inferior good

1. AThe firm's sales will grow twice as fast
2. BNeither firm's sales will change at all
3. CBoth firms will lose sales as incomes rise
4. DThe rival's sales will grow twice as fast

1. AChange the kind of promotion and its targeting
2. BStop all spending on promotion until sales recover
3. CSpend far more on the same advertising
4. DRaise prices to pay for more advertising

1. AThe ability to meet an unexpected rise in orders
2. BThe chance to lower its variable cost per unit
3. CThe ability to spread fixed costs over output
4. DThe right to negotiate new terms with its own workers

1. AImpose the change and dismiss any worker who refuses it
2. BConsult and negotiate before the change is introduced
3. CWait for a strike and then call in an arbitrator
4. DReplace the existing workers with new recruits

1. AA ruling given by a labour officer on a pay claim
2. BA ballot held among all the workers before a strike is called
3. CNegotiation between management and workers' representatives
4. DA meeting of shareholders to approve a wage rise

1. AThe arbitrator gives a decision on the dispute
2. BThe arbitrator must be employed by the company
3. CThe arbitrator represents the workers' interests
4. DThe arbitrator only helps the parties to talk

1. AA deal linking higher pay to higher output
2. BA promise by management not to make redundancies
3. CA plan to move workers onto shorter hours
4. DA guarantee of the same wage in every branch

1. AA rise in the basic hourly rate of pay
2. BJob rotation and better rest breaks
3. CProfit sharing at the end of the year
4. DA bonus paid on every extra unit made

1. AThe rate of interest charged by banks
2. BThe level of skill of its own workforce
3. CThe rate of value added tax on its goods
4. DThe number of rivals in its own market

1. ATechnological
2. BPolitical and legal
3. CCompetitive
4. DSocial and demographic

1. AStrengths and weaknesses
2. BWeaknesses and threats
3. COpportunities and threats
4. DStrengths and opportunities

1. AA fall in the value of the local currency
2. BA fall in the country's rate of inflation
3. CA rise in the value of the local currency
4. DA rise in the school leaving age

1. AIts suppliers will insist on cash on delivery
2. BIts wage bill will rise beyond its budget
3. CIts customers will begin to demand much longer credit terms
4. DIts equipment becomes obsolete before it wears out

1. AThe rate of company taxation
2. BThe gearing of the firm's balance sheet
3. CThe age structure of the population
4. DThe reliability of the power supply

1. AThey are the factors management is able to change
2. BThey are the only factors a SWOT analysis considers
3. CThey are unaffected by the state of the economy
4. DThey are always larger in money terms than external ones

1. AInternal factors matter only to very large firms
2. BExternal factors are always favourable to a firm
3. CInternal change takes time to plan and carry out
4. DExternal factors are easier to forecast accurately

1. AA small firm selling one product at home
2. BA new firm selling one product abroad
3. CA large firm selling many products in many markets
4. DA medium sized firm selling one product to a single buyer

Answer this when you sit the paper.

1. AEconomic
2. BCompetitive
3. CPolitical
4. DInternal

1. AIts own gearing and its cash flow position
2. BIts own management structure and culture
3. CRivals, suppliers, buyers and new entrants
4. DIts own product range and pricing policy

1. AA rise in the bank lending rate
2. BA power cut at the firm's factory
3. CA new import tariff on fabric
4. DA change in tastes and lifestyles

1. AAttracting suitable applicants for a vacancy
2. BSettling a new employee into the job
3. CChoosing one applicant from a shortlist
4. DAssessing an employee's performance over the year

1. AThe location at which the work is carried out
2. BThe duties and the reporting line of the post
3. CThe qualities and skills the holder must have
4. DThe wage and the hours attached to the post

1. AIt widens the field of applicants considerably
2. BThe candidate is known and settles in quickly
3. CIt avoids the need for any selection process
4. DIt brings fresh ideas into the organisation

1. AIt takes longer than an external search
2. BIt brings in no new skills or ideas
3. CIt costs more than advertising externally
4. DIt is forbidden by employment law

1. AInterviews cost more than any written test
2. BInterviews are forbidden for senior posts
3. CInterviews cannot lawfully be used on internal candidates
4. DInterviews on their own predict performance poorly

1. AThe duty to publish annual accounts
2. BThe rules on paying value added tax
3. CThe rules on depreciating fixed assets each year
4. DThe law against discrimination in hiring

1. AA regular formal review of an employee against agreed standards
2. BA survey asking customers to rate a firm's service
3. CA ranking of every job by its worth to the employer
4. DA yearly count of the hours that each employee has actually worked

1. AService firms employ far fewer people overall
2. BThe customer is present while the service is given
3. CService staff are always paid on results
4. DService firms are required by law to appraise staff

1. AThe substitution effect
2. BThe hierarchy effect
3. CThe halo effect
4. DThe multiplier effect

1. AAgents refuse to answer any calls at all
2. BAgents spend far longer on each customer
3. CAgents end calls before the problem is settled
4. DAgents pass every call they receive to their supervisor

1. AA revised job description for the whole team
2. BA ranking of every post in the organisation
3. CA record of the employee's daily attendance
4. DAn agreed plan of training and development

1. AIt rests on one manager's private opinion
2. BIt is used mainly as the first step on the way to dismissal
3. CThe criteria are agreed in advance and appraisers trained
4. DIt is held once every three or four years

1. AAll the firm's branches trade under one brand name
2. BAuthority to decide is kept at the top of the firm
3. CAll the firm's offices are housed on a single site
4. DAuthority to decide is passed to branch managers

1. ADividing a large department into smaller ones
2. BPassing authority for a task to a subordinate
3. CPassing responsibility for a result to a superior
4. DDismissing a manager who has failed to deliver

1. AThe choice of a local delivery driver
2. BThe reordering of stock in one shop
3. CThe raising of capital for the whole group
4. DThe rota for a branch's weekend counter staff

1. AA crisis that threatens the firm's own survival
2. BBranches spread across many distant towns
3. CA product whose price is fixed by law
4. DA single site with fifteen employees

1. ALower training costs for junior managers
2. BFaster decisions at every branch counter
3. CThe same standard applied in every branch
4. DGreater job satisfaction among the tellers

1. AIt falls, because supervision of the work becomes closer
2. BIt is unchanged, since pay does not alter
3. CIt rises, because responsibility is a motivator
4. DIt falls, because the workload rises

1. ADelegate widely to junior managers
2. BCentralise decisions and supervise closely
3. CSet up a works council for regular consultation
4. DIntroduce autonomous work groups

1. AAllowing workers to choose their own hours
2. BInvolving employees in decisions that affect them
3. CTraining workers to carry out several jobs
4. DPaying workers a share of the profit earned in the year

1. AAn overtime rota
2. BA quality circle
3. CA redundancy payment
4. DA piece rate scheme

1. AIt removes the need for any supervision
2. BIt guarantees a rise in output every year
3. CIt sharply reduces resistance to change
4. DIt ends the need to pay overtime rates

1. AThe decision must be put to a vote
2. BEmployees must be paid a bonus
3. CThe decision cannot be reversed
4. DThe decision takes longer to reach

1. AOutput depended entirely on the piece rate that was paid
2. BOutput fell whenever workers were consulted
3. COutput rose only when lighting was improved
4. DOutput rose when workers felt noticed and involved

1. AEmployees find the decision was already taken
2. BEmployees receive information from a rival firm
3. CEmployees learn how the firm's profits are shared
4. DEmployees are asked to attend extra meetings

1. AIt was protected by a patent for too long
2. BIt was priced above the cost of making it
3. CIt was launched without evidence of demand
4. DIt was sold through the firm's own outlets

1. ASales of those products will eventually decline
2. BSales of those products are the hardest to measure
3. CMature products cannot be advertised
4. DMature products cannot be sold on credit

1. AA cash cow
2. BA dog
3. CA new entrant
4. DA star

1. AJob evaluation of the design department's posts
2. BVariance analysis of last year's production costs
3. CRatio analysis of the previous year's accounts
4. DInvestment appraisal of the forecast cash flows

1. AAn exemption from consumer protection law
2. BA subsidy from government towards its cost
3. CA right to stop others copying it for a period
4. DA guarantee that the product will sell well abroad

1. AA new product takes sales from the firm's own range
2. BA rival copies the firm's new design
3. CA supplier raises the price of a component
4. DA product is withdrawn shortly before it is launched

1. AMarket penetration
2. BMarket development
3. CUnrelated diversification
4. DProduct development

1. ASmall firms are barred from holding patents
2. BMost new products fail and the money is gone
3. CNew products must be sold below their cost
4. DSmall firms cannot carry out market research

1. ABecause every product eventually declines
2. BBecause the law requires firms to innovate
3. CBecause it always lowers the unit cost
4. DBecause rivals cannot copy a new product

1. ACustomers refuse to buy a product twice
2. BRivals imitate it without paying the development cost
3. CNew products cannot be advertised nationally
4. DPatents are granted only to the largest firms in an industry

1. APharmaceuticals
2. BDomestic cleaning
3. CCement manufacture
4. DBuilders' merchants

1. ACash generated by its mature products
2. BA short term loan from a moneylender
3. CTrade credit taken from its suppliers
4. DAn overdraft repayable on demand

1. AProduction financed entirely by borrowing
2. BProduction using labour for most of the work
3. CProduction carried out by a single skilled worker
4. DProduction using machinery for most of the work

1. AA rise in the rent charged for premises
2. BA rise in wages and employment costs
3. CA fall in the price of its raw material
4. DA fall in the market rate of interest

1. AHigh fixed cost and low variable cost
2. BHigh fixed cost and high variable cost
3. CNo fixed cost and no variable cost
4. DLow fixed cost and high variable cost

1. AMaterials become cheaper to buy in bulk from suppliers
2. BFaults are found earlier by inspectors
3. CEvery unit is made to the same tolerance
4. DEvery unit can be made to order

1. ASkilled operators are unavailable at such a low output
2. BMachines cannot run for more than one shift
3. CThe heavy fixed cost must be spread over many units
4. DRaw materials cost more when output is low

1. AThe redundancy payments and lost goodwill
2. BThe purchase price of the new equipment
3. CThe interest charged on the loan raised
4. DThe electricity used to run the new machines

1. AProducing goods and receiving materials only as needed
2. BOrdering all the materials once a year from one supplier
3. CProducing goods well ahead of the delivery date
4. DHolding a large buffer stock of every component

1. AThe price paid for raw materials falls
2. BThe wage bill for the whole factory falls
3. CThe rate of interest charged by its own bank falls
4. DWorking capital tied up in stock is released

1. AA single product made in very small batches
2. BSuppliers delivering reliably and to specification
3. CA large warehouse near the factory
4. DA workforce paid entirely on piece rates

1. AOne late delivery halts production immediately
2. BMaterials will be bought at a higher price
3. CStorage space will be left standing empty
4. DStock will become obsolete before it is used

1. AInterest on capital tied up in stock
2. BDelivery cost, through frequent small loads
3. CWages of the warehouse security staff
4. DInsurance on the finished goods store

1. AQuality at every stage is already very high
2. BDemand is steady and suppliers are close by
3. CSupply is unreliable and a stockout is costly
4. DThe workforce is flexible and multi skilled

1. ABuying land and buildings for the business
2. BDistributing the year's profit to the shareholders
3. CFunding day to day trading between paying and being paid
4. DRepaying the capital borrowed on a long term loan

1. AIt cannot find cash to meet debts as they fall due
2. BIts profit is taxed at too high a rate
3. CIts assets are worth more than its liabilities
4. DIts shareholders refuse to take a dividend

1. AThe interest owed on the owner's own savings
2. BCosts incurred before any revenue is earned
3. CThe dividends owed in the first trading year
4. DThe tax charged on the first year's profit

1. AEvery sale is matched with a receipt
2. BLong lived assets are funded by long term finance
3. CEvery expense is matched by a bank transfer
4. DAll finance is raised from a single lender

1. AAssets must be replaced every trading year
2. BProfit cannot lawfully be spent on equipment
3. COld assets must be sold at their original cost
4. DDepreciation charged is not a fund of cash

1. AMoney owed by customers who bought on credit
2. BMoney left in the business out of past profits
3. CMoney borrowed for a fixed period at agreed interest
4. DMoney raised by selling shares to new investors

1. AA loan never has to be repaid in full
2. BA lender gains no vote and no share of profit
3. CA lender takes on part of the trading risk
4. DA loan costs less than shares in every year

1. AInterest is paid only when profits are made
2. BInterest is an allowable expense against tax
3. CInterest is refunded once the loan is repaid
4. DInterest is fixed for the life of every loan

1. AThe proportion of its assets that are current
2. BThe proportion of its sales made on credit
3. CThe proportion of its costs that are variable
4. DThe proportion of its finance that is borrowed

1. AThe lender may demand a seat on the board
2. BThe loan must be repaid out of the share capital
3. CThe rate of interest can never be renegotiated
4. DInterest and instalments fall due in a bad year too

1. AA share of the company's voting rights
2. BA guarantee of a minimum yearly profit
3. CSecurity over an asset of the business
4. DA seat for its own nominee on the board

1. ABuying a machine whose life matches the loan term
2. BBuying delivery vehicles repaid over five years
3. CCovering a few weeks of seasonal cash shortage
4. DBuilding a warehouse repaid over twenty years

1. APresenting the accounts to flatter the firm's position
2. BPublishing the accounts later than the law allows
3. CRefusing to let an auditor examine the records
4. DPreparing accounts for each branch separately

1. AA wish to pay its suppliers more quickly
2. BA duty to train its accounting staff
3. CA plan to move to larger premises
4. DA need to satisfy a lender's loan covenant

1. AIt removes the need to charge depreciation
2. BIt lowers the value of the closing stock
3. CIt raises the reported gross profit margin
4. DIt leaves more cash in the reported figures

1. AIt makes ratios unnecessary for lenders
2. BIt makes ratios unreliable as a guide
3. CIt makes ratios easier to calculate
4. DIt makes ratios comparable between firms

1. AA forecast of the country's inflation rate
2. BA statement of the firm's assets and debts
3. CA record of last year's actual spending
4. DA financial plan for a future period

1. AComparing actual results with budget and acting
2. BSetting the budget for the following year
3. CAuditing the budget before it is approved
4. DRefusing any spending above the agreed budget

1. AActual cost was lower than the budget allowed
2. BActual cost was higher than the budget allowed
3. CThe budget was set by the manager responsible
4. DThe budget was approved after the period began

1. AExamining every item of expenditure each month
2. BAllowing each manager to write their own budget
3. CInvestigating only the results that differ from plan
4. DExcusing a manager who misses an agreed target

1. AThe wages budget, because labour is the largest cost
2. BThe cash budget, because a shortage of cash closes firms
3. CThe sales budget, because revenue is the largest figure
4. DThe capital budget, because assets last many years

1. AA budget prepared later than the agreed date
2. BAn allowance deliberately padded by the manager
3. CAn overspend carried into the next period
4. DA budget that has not yet been approved

1. AIt carries last year's waste forward
2. BIt cannot be used by a service business
3. CIt ignores the previous year's actual figures
4. DIt requires every cost to be justified afresh

1. AThe manager is not told what the target is
2. BThe target is expressed in money terms
3. CThe manager had no part in setting the target
4. DThe target is reviewed part way through

1. AThe path holding the largest number of activities
2. BThe path on which the most money is being spent
3. CThe longest path, which fixes the project duration
4. DThe shortest route between the first and last activity

1. AThe smaller of the two arriving times
2. BThe larger of the two arriving times
3. CThe average of the two arriving times
4. DThe sum of the two arriving times

1. ADuration less latest finish plus earliest start time
2. BEarliest start time less duration less latest finish
3. CLatest finish time plus duration plus earliest start
4. DLatest finish time less duration less earliest start

Answer this when you sit the paper.

1. AA, B, C and D
2. BA, C and E
3. CA, B and E
4. DB, D and E

Answer this when you sit the paper.

1. ANon critical activities cost more to shorten
2. BThe project still waits on the critical path
3. CNon critical activities cannot be shortened
4. DThe float on the activity would then rise

1. AThe project duration is unaffected by it
2. BThe following activity absorbs the two weeks
3. CThe whole project finishes two weeks late
4. DThe float on that activity falls by two weeks

1. AIt removes the need to hold any stock at all
2. BIt shows when each activity's materials are needed
3. CIt fixes the price the supplier may charge
4. DIt sets the discount available for bulk orders

1. AIt rests on estimates of how long each activity takes
2. BIt cannot be drawn for a project of many activities
3. CIt gives no indication of the project's duration
4. DIt cannot show activities running at the same time

1. ARepetitive daily production of one item
2. BRoutine clerical work in a small office
3. CA small job of three or four simple steps
4. DA large one off project with a firm deadline

1. ANothing changes unless managers act on it
2. BIt applies only to projects funded by loans
3. CIt cannot be updated once the project starts
4. DIt produces no figures a manager can use

1. AA pictogram
2. BA line graph
3. CA pie chart
4. DA pie diagram

1. AShowing how one total divides into its parts
2. BShowing how a figure has changed over ten years
3. CShowing the relationship between two variables
4. DShowing the exact value of every figure quoted

1. AIt shows the make up of each total
2. BIt handles unequal class widths correctly
3. CIt shows the exact figure above each bar
4. DIt shows several categories side by side

1. AThat sales would fall without advertising
2. BThat advertising causes the rise in sales
3. CThat the advertising was worth its cost
4. DThat the two figures move together

1. ASmall differences look far larger
2. BThe chart shows the total of the bars
3. CSmall differences disappear entirely
4. DThe bars become impossible to compare

1. AIt cannot be understood without training
2. BIt cannot be printed in an annual report
3. CPart symbols cannot be read precisely
4. DIt cannot show more than two categories

1. AWhen the audience is a general one
2. BWhen a strong impression is wanted
3. CWhen only a trend needs to be shown
4. DWhen exact values must be read off

1. AThe median and quartiles of a set of values
2. BThe make up of each total as well as its size
3. CThe frequency of a continuous distribution
4. DThe relationship between two measured variables

1. AThe mean and the standard deviation
2. BThe range and the arithmetic mean
3. CThe mode and the total frequency
4. DThe median and the quartiles

1. AThe software the analyst happens to own
2. BThe size of the firm collecting the data
3. CThe cost of printing the finished report
4. DThe type of data and the audience for it

1. AA chart cannot show a sample's size
2. BA biased sample stays biased when drawn
3. CCharts are read less carefully than tables
4. DSoftware cannot draw a small sample

1. AThe chart shows only the largest segment
2. BThe chart cannot be drawn by software
3. CThe segments no longer sum to the total
4. DSimilar segments cannot be told apart