Business Studies Paper 2 November 2019

1. ARestricting small firms' access to government tenders and contracts
2. BRaising the minimum capital requirement needed to register and operate a new small business
3. CProviding subsidies to small firms in the form of low-cost loans and tax holidays
4. DIncreasing tariffs on the imported raw materials that small firms depend on

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1. AReduced tariffs between member states increase trade and widen the variety of goods available
2. BAll member countries must adopt a single common currency as soon as they join
3. CCompetition among firms operating within the region falls sharply once trade barriers are removed
4. DMember countries lose the right to trade with any country outside the grouping

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1. AA noticeable and sustained decrease in the firm's quarterly profit margin over recent periods
2. BA significant fall in the firm's monthly production output figures
3. CA steady increase in the firm's transport costs per unit produced
4. DNegative attitudes towards the firm from the local community or pressure groups

1. AThe level of demand and the elasticity of demand for the product
2. BThe number of public holidays observed in the firm's home country
3. CThe physical size of the firm's head office building
4. DThe average age of the firm's administrative staff

1. ASelling a single, standardised product to the whole market without targeting any particular group
2. BProducing goods in very large quantities to take full advantage of economies of scale
3. CSetting the lowest possible price so the product appeals to the broadest possible customer base
4. DIdentifying a small segment of a larger market and tailoring a product to suit it

1. ATargeting customers based on one narrow set of shared characteristics within a single niche
2. BIdentifying a small, specific segment of the market and tailoring a product exclusively to it
3. CSelling one largely standardised product to the whole market without targeting a segment
4. DProducing only small quantities of a highly specialised product for a select group of customers

1. AEmployees, who focus mainly on job security and pay
2. BBankers, who focus mainly on the firm's ability to repay loans
3. CThe government, who focuses mainly on the firm's tax liability
4. DShareholders, who focus mainly on profitability and future dividends

Answer this when you sit the paper.

Answer this when you sit the paper.

1. AJob enrichment, giving an employee greater responsibility and task variety
2. BA performance-related cash bonus paid for meeting agreed sales targets
3. CA share of company profits distributed to staff each year
4. DA permanent increase in an employee's basic monthly salary

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Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

Answer this when you sit the paper.

1. AIt is generally cheaper, avoiding the cost of external advertising and agency fees
2. BIt brings new ideas and skills into the organisation from outside
3. CIt gives the organisation access to the widest possible pool of external candidates available
4. DIt increases the diversity of skills and perspectives within the team

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1. AThe informal social relationships and grapevine communication networks among staff
2. BThe exact salary and bonus structure of each employee
3. CThe formal chain of command and reporting relationships between staff
4. DThe personal performance rating of each employee

Answer this when you sit the paper.

1. AMessages are typically sent in written form to create a permanent record
2. BThe receiver can give feedback, so the sender can check the message was understood
3. CThe sender does not need to consider how the receiver will interpret the message
4. DInformation flows only in one direction, from sender to receiver

1. AIssuing new ordinary shares to raise permanent capital
2. BPaying day-to-day expenses such as wages, rent and stock purchases
3. CPurchasing a brand new factory building as a long-term, non-current fixed asset
4. DRepaying the firm's long-term bank loan in full

1. AManagers work hardest when a target is imposed on them without discussion
2. BManagers are most motivated when the budget figure is kept secret from them
3. CManagers are more committed to targets they have helped to set themselves
4. DManagers ignore budget targets because performance is judged on cash flow

1. AIt replaces the need for departments to record what they actually spend
2. BIt sets the wages that each department must pay to its own employees
3. CIt shares out scarce funds between departments against agreed priorities
4. DIt increases the total funds the business has available for the coming year

Answer this when you sit the paper.

Answer this when you sit the paper.

1. AOral communication
2. BWritten communication
3. CElectronic communication
4. DNon-verbal communication

1. AIt allows immediate feedback, so a message can be clarified through discussion
2. BIt does not require the sender and receiver to be available at the same time
3. CIt leaves less room for misinterpretation than a written message
4. DIt creates a permanent record that can be referred to again later

1. AThe firm's profits are shared with the community as a form of dividend
2. BThe community benefits from increased local tax revenue paid by the firm
3. CLocal employment opportunities increase as the firm expands its workforce
4. DDust and land degradation from the plant's operations pollute the area and reduce farmland

1. AThe business cannot own property or borrow money in its own name
2. BThe business cannot be sued in its own name, since it has no separate legal identity from its owners
3. CShareholders have limited liability, so their personal assets are protected if the business fails
4. DThe owners have unlimited personal liability for all the business's debts

1. ADaily output has to be reduced to keep the machinery within its warranty terms
2. BBricks need a longer drying time when computer controlled machines shape them
3. CMachines work at a steady rate for long periods, raising daily brick output
4. DEach machine is reprogrammed by hand between one batch of bricks and the next

1. AA separate machine is installed for each type of brick that the firm makes
2. BThe moulds are adjusted by hand at the start of each working day at the plant
3. CThe firm keeps to the brick type chosen when the machinery was first bought
4. DThe machine's program is changed, so a different brick can be made quickly

1. AA computerised line cannot be halted once a production run has been started
2. BComputer controlled machines raise the cost of the clay used in each brick
3. CComputerised production requires far larger stocks of finished bricks to be held
4. DA programming error or a virus can spoil a whole run before it is noticed

1. ARetraining the existing workers to operate and monitor the new machinery
2. BPaying redundancy to the existing workers even where they keep their jobs
3. CRecruiting a computer programmer to work alongside each of the 24 workers
4. DPaying the machinery supplier a fee for every brick the new line produces

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1. AA bank overdraft, arranged to cover short-term cash shortfalls
2. BTrade credit extended by suppliers for goods bought on account
3. CCash generated from the firm's day-to-day sales revenue
4. DDebentures, which raise a lump sum repaid over a long period

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1. AThe geographic region in which a firm's head office happens to be located
2. BThe entire mass market, targeted using one single, undifferentiated marketing approach
3. CA small segment of a larger market that large firms often overlook as less profitable
4. DA broad market that covers multiple large customer segments all at once

Answer this when you sit the paper.

Answer this when you sit the paper.

1. AReducing fixed costs, for example by negotiating lower rent
2. BReducing the selling price of the product
3. CIncreasing fixed costs by investing in additional premises
4. DIncreasing the variable cost per unit by using more expensive raw materials

1. AThe bank loans taken out while the company was private no longer need repaying
2. BThe company is freed from paying tax on the profit it earns from its fish sales
3. CThe four existing shareholders gain personal ownership of the company's boats
4. DA large amount of capital can be raised by selling shares to the general public

1. AThe money stays in the business, because shares change hands between investors
2. BShares are sold back to the company whenever a shareholder decides to leave
3. CShares may be transferred to a new owner with the agreement of all directors
4. DShares are repaid to shareholders in cash at the end of each trading year

1. AMore than half of its shares must be sold to a single institutional investor
2. BShareholders lose limited liability and answer personally for company debts
3. CCompetitors can study its costs, margins and profits from the published figures
4. DDirectors must be replaced by government appointed officials each trading year

1. AThe stock exchange decides which investors are allowed to hold the shares
2. BAn outside buyer can build a stake large enough to take control of the company
3. CThe founders keep control, because their own shares each carry ten votes
4. DThe company may refuse to register any buyer it dislikes as a shareholder

Answer this when you sit the paper.

Answer this when you sit the paper.

1. AThe shop is able to reduce the range of accessories it needs to hold in stock
2. BThe shop's suppliers agree to lower the wholesale prices that they charge it
3. CAssistants advise customers accurately, so sales rise and returns fall
4. DAssistants can be paid a lower basic wage once their training has been completed

1. ATrained staff are legally entitled to a supervisory post within the business
2. BTrained staff work fewer hours because training counts as contracted time
3. CSupervisory and administrative costs fall because staff work with less oversight
4. DTrained staff must be checked more closely to confirm the training was followed

1. ATrained workers must be promoted to a higher grade within a year of training
2. BTrained workers are worth more elsewhere, so the firm loses what it paid for
3. CTrained workers give up the right to resign for a fixed period after training
4. DTrained workers repay the cost of their training out of their monthly wages

1. ANobody is serving customers while the training runs, so sales are lost
2. BThe shop must close for the whole day on which the training takes place
3. CManagers from head office must be sent to replace the absent assistants
4. DStaff on training are entitled to double their normal wage under the law

1. AStaff must be retrained whenever a new member joins their existing team
2. BSuppliers forbid a shop from training its staff on more than one brand
3. CProduct knowledge dates within months, so training has to be repeated often
4. DTraining in customer service loses its value as soon as new products arrive

Answer this when you sit the paper.

1. AOpportunities for promotion within the company
2. BA performance-related bonus paid to staff for meeting sales targets
3. CJob enrichment, giving staff greater responsibility and variety in their tasks
4. DPublic recognition and praise from management for good performance

Answer this when you sit the paper.

1. AResponsibility for departmental results passes to the communications officer
2. BDepartments learn what the others are doing, so their work is coordinated
3. CDepartments no longer need objectives, because instructions arrive directly
4. DThe number of departments the business needs to operate is reduced sharply

1. AOfficial messages travel faster because the informal network is written down
2. BThe informal network is the formal route by which managers brief their staff
3. CThe informal network disappears once an internal email system is installed
4. DAccurate official messages leave less room for rumour to take hold

1. ADecisions improve when information is withheld until the choice is made
2. BDecisions rest on the firm's real position rather than on assumption
3. CDecisions take longer, and their quality falls as more information arrives
4. DDecisions rest on the number of messages received rather than their content

1. AStaff take over responsibility for disciplining their own colleagues
2. BStaff understand the reasons, so industrial action is less likely to follow
3. CStaff who are told of a change lose their right to union representation
4. DStaff who are kept informed can be paid less because morale is higher

Answer this when you sit the paper.

1. ASMEs create a significant number of employment opportunities within the local economy
2. BSMEs typically reduce the government's overall tax revenue
3. CSMEs generally reduce the range and variety of goods and services available to consumers
4. DSMEs tend to reduce the level of competition faced by large, established businesses

Answer this when you sit the paper.

1. ATo extend the physical shelf life of the ice-cream
2. BTo reduce the cost of raw materials used in production
3. CTo differentiate the manufacturer's products from competitors' products
4. DTo comply with government food safety regulations

1. AThe total output a business produces in a given period of time
2. BThe profit a business earns on each unit of output that it sells
3. CThe share of a business's output that passes its own quality checks
4. DThe output produced per worker or per machine in a given period

1. AThe amount of raw material used in each unit produced is increased
2. BEach worker completes more work in an hour and makes fewer mistakes
3. CMore workers are needed to complete the same amount of work each hour
4. DThe price the business can charge for each unit produced is increased

1. AJob rotation, which lowers output by keeping workers on one narrow task
2. BPiece rates, which pay a fixed wage regardless of how much a worker produces
3. CJob enlargement, which gives workers a share of the yearly profit as a reward
4. DJob enrichment, which raises effort by making the work itself more rewarding

1. AIt counts the units of raw material that are held in the firm's stores
2. BIt fixes the number of hours each worker is contracted to work weekly
3. CIt sets the wage rate that is paid to each grade of worker in the firm
4. DIt removes wasted movement, so each task takes less time to complete

1. AThe law caps how much output any single worker is allowed to produce
2. BThe methods cost money to introduce and workers may resist the change
3. CNew methods must be approved by the revenue authority before being used
4. DOutput falls permanently because workers need time to learn new methods

Answer this when you sit the paper.

1. AThe cost of advertising the finished product
2. BThe cost of raw materials purchased for production
3. CThe cost of delivering finished goods to customers
4. DStorage and warehousing costs for keeping the stock

1. AThe unit cost of producing each item the company sells is reduced
2. BThe company no longer needs to distribute its products through retailers
3. CCustomers come to know and recognise the brand when they are ready to buy
4. DThe price competitors can charge for similar products is fixed by law

1. AIt tells the market the product exists and explains what it does
2. BIt reduces the market research the company must carry out first
3. CIt secures shelf space in every retail outlet across the country
4. DIt shortens the time the product spends in the development stage

1. AThe company must lower its prices at the same time as it advertises
2. BThe spending must be met out of the profit the campaign itself generates
3. CThe company is committed to running the same campaign for a full year
4. DThe spending comes first while the extra sales it may bring are uncertain

1. AAdvertising spending is not recorded in the accounts, so it cannot be compared
2. BSales move for many reasons at once, so the campaign's own effect is unclear
3. CSales figures appear too late in the year for any comparison to be made
4. DAdvertising agencies may not disclose how many people saw a campaign

1. AThe company can charge a higher price because the claim raises demand
2. BThe company must supply the product free to anyone who read the claim
3. CThe claim must then be repeated in every advertisement the company runs
4. DCustomers who feel misled stop buying, and the regulator may intervene

Answer this when you sit the paper.

1. ACurrent assets less current liabilities, the funds used in day to day trading
2. BTotal assets less total liabilities, the amount the owners have in the firm
3. CThe cash the business holds at the bank on the last day of its financial year
4. DThe value of the machinery and premises the business uses in its production

1. AReduce the rate of interest it is charged on its long term borrowings
2. BPay wages and suppliers on time as each bill falls due each month
3. CIncrease the market value of the premises the business owns and occupies
4. DRaise the profit margin it earns on every unit that it sells to customers

1. AA business short of working capital cannot record a profit in its accounts
2. BA business short of working capital must sell its shares back to its owners
3. CA business short of working capital is required by law to cease trading at once
4. DA profitable business can still fail if it runs out of cash to settle debts

1. AIt removes the need to agree any credit terms with its own suppliers
2. BIt can claim bulk buying and prompt payment discounts on its purchases
3. CIt allows the business to delay paying suppliers without any penalty
4. DIt obliges its suppliers to reduce the list prices that they charge it

Answer this when you sit the paper.

Answer this when you sit the paper.

1. AThe profit earned and the dividend that may be paid out of it
2. BThe selling price the company sets for each of its products
3. CThe wages that the company pays to its own production staff
4. DThe suppliers from which the company chooses to buy materials

1. AWhat wages the business is required to pay to each of its staff
2. BWhat rate of interest the central bank will set in the coming year
3. CWhether the business can meet the interest and repay the loan
4. DWhich of the business's products the bank should help to promote

1. ATo set the prices at which the business sells goods to consumers
2. BTo appoint the directors who will run the business in the year ahead
3. CTo assess the tax the business owes on the profit it has earned
4. DTo decide the dividend the business will pay to its shareholders

1. AThe statements record what has already happened, not what is coming
2. BThe statements cover a single month, so a full year cannot be judged
3. CThe statements record forecasts, so they cannot be checked afterwards
4. DThe statements are prepared before the year begins and exclude its trading

1. AWhether the business is secure enough to keep paying their wages
2. BWhich customers the business should be serving in the year ahead
3. CWhich directors the business should appoint to run it next year
4. DWhat production target their own department should be set

1. AThe figures must be approved by every shareholder before publication
2. BThe figures are prepared by the auditor rather than by the company itself
3. CThe figures hide the currency in which the transactions were recorded
4. DThe figures may lead the reader to a more flattering view than is warranted

Answer this when you sit the paper.

1. AImplementing and executing the agreed project plan
2. BMonitoring and controlling the project's progress once under way
3. CIdentifying the business need or opportunity to be addressed
4. DEvaluating and reviewing the completed project's final outcomes

1. AThey keep full control, because no new shares in the company are issued
2. BThe loan may be repaid at any time the company chooses without penalty
3. CThe interest payments fall automatically in a year the company makes a loss
4. DThe lender takes a share of the profit instead of a fixed interest payment

1. AInterest exempts the company from tax on the profit it earns from trading
2. BInterest is deducted before profit is taxed, so the tax bill is lower
3. CInterest is refunded by the revenue authority at the end of the year
4. DInterest is treated as a dividend and taxed in the shareholders' hands

1. AInterest and instalments are recalculated as a share of the monthly revenue
2. BInterest and instalments still fall due whatever the company has earned
3. CInterest and instalments are suspended for any year in which a loss is made
4. DInterest and instalments are met from the shareholders' own personal funds

1. AGearing falls, because borrowed funds are not owners' funds at all
2. BGearing rises, and with it the risk that lenders and owners carry
3. CGearing is unchanged, since it counts the owners' invested capital alone
4. DGearing rises, and the dividend paid to shareholders rises with it

1. ATaking ownership of the business itself for the whole life of the loan
2. BRequiring the business to keep the borrowed funds in a separate account
3. CRequiring the business to insure the loan with a state owned agency
4. DTaking security it can sell if the business fails to repay the loan

Answer this when you sit the paper.