Business Enterprise Skills Paper 2 Specimen A 2026

Answer this when you sit the paper.

1. AA shift supervisor employed in the enterprise's packing section
2. BA machine operator working on the enterprise's production line
3. CThe production manager who supervises the enterprise's factory
4. DA supplier who delivers the raw fruit used in the factory

1. Aset the wage rates that every business in the industry must pay.
2. Bcombine the other factors of production and bear the risk of loss.
3. Csupply the labour that is used on the production line each day.
4. Dlend money to the business at an agreed rate of interest each year.

1. AA shortage of foreign currency to pay for imported raw materials
2. BA decision to run the factory on two shifts instead of one shift
3. CThe owner's choice of colour for the product's outer packaging
4. DAn argument between two managers about their holiday dates

1. Athe shares can be offered for sale to any member of the general public.
2. Bthe business no longer has to pay any tax on the profits that it earns.
3. Cthe business is freed from the duty to keep any accounting records.
4. Dthe owners gain limited liability, so their personal assets are protected.

1. Ashare capital, since the friends become part owners of the business.
2. Bretained profit, since it is money the business did not have to earn.
3. Can external source of finance, since it comes from outside the business.
4. Dan internal source of finance, since no interest is charged on the loan.

1. Athe number of years the enterprise has already been trading for.
2. Bthe length of time for which the money will actually be needed.
3. Cthe amount of profit the enterprise earned in the previous year.
4. Dthe number of employees the enterprise has on its payroll.

1. Acustomers there have different tastes, languages and cultural habits.
2. Bthe enterprise is not allowed to use the same brand name abroad.
3. Cforeign buyers pay only in the currency of the exporting country.
4. Dtransport regulations require every product to be sold unpackaged.

1. Adeciding which raw materials the enterprise ought to be ordering.
2. Bremoving the enterprise's obligation to pay for the goods it orders.
3. Cshortening the time between placing an order and receiving the goods.
4. Dsetting the prices at which the suppliers must sell their materials.

1. Amushrooms can be stored for several years in a shed before they are sold.
2. Bmushroom growing needs no equipment beyond an ordinary garden plot.
3. Cthe price of mushrooms is fixed by law and so cannot change during the year.
4. Dthe crop is perishable, so growing, harvesting and selling must be timed together.

1. Athe enterprise is no longer able to borrow money from any of the banks.
2. Bunit costs begin to rise because the business becomes harder to manage.
3. Cthe enterprise must reduce the number of different products it makes.
4. Dthe total cost of production falls each time that output is increased.

1. Athe owner keeps closer personal contact with every single customer.
2. Bthe enterprise needs less working capital than it did before it grew.
3. Cdecisions can be taken more quickly than in a smaller enterprise.
4. Dbuying in larger quantities earns discounts and lowers the unit cost.

1. Athe speed of the journey and the cooling available during it.
2. Bthe number of workers the grower employs on the plantation.
3. Cthe year in which the grower's own farm was first established.
4. Dthe colour of the packaging in which the fruit will be transported.

1. Atransport costs fall because the distance travelled is much greater.
2. Ba larger market absorbs a harvest that would glut the local market.
3. Cthe grower is paid for the crop before the bananas have been picked.
4. Dthe fruit no longer needs to be graded before it is packed for sale.

1. Ameeting the plant health standards and the volumes that buyers demand.
2. Bthe absence of competitors already supplying that foreign market.
3. Cbeing paid in a currency that is stronger than the local currency.
4. Dthe shorter distance the fruit must travel to reach the foreign buyer.

Answer this when you sit the paper.

1. Athey pay lower wages than producers in the other member states do.
2. Bthey are protected from competition by producers in the member states.
3. Cthey sell into a much larger market free of tariffs and of quotas.
4. Dthey are guaranteed a fixed price for everything that they produce.

1. Athe answer changes according to how widely the market is defined.
2. Ban enterprise's share of a market is never recorded anywhere at all.
3. Cmarket share falls whenever an enterprise increases its total output.
4. Donly enterprises listed on a stock exchange are able to hold a share.

1. Aa higher price for the raw materials that it buys from its suppliers.
2. Ban obligation to employ more managers than a modern factory does.
3. Clow output and high unit costs compared with a modern competitor.
4. Dlower spending on maintenance than a modern factory would need.

1. Ait borrows from the banks at a lower rate than a large enterprise does.
2. Bit buys its raw materials more cheaply than a large enterprise does.
3. Cit can afford to spend more on advertising than a large enterprise can.
4. Dit can change what it produces quickly as customer demand changes.

1. Ait cannot gain the economies of scale that lower a large firm's costs.
2. Bdecisions take longer to make because of the layers of management.
3. Cit is not permitted by law to employ more than a handful of workers.
4. Dit is unable to build a close relationship with its own customers.

1. Amost of the costs are paid months before the crop earns any revenue.
2. Bthe grower is paid for the crop before the seed has been planted.
3. Cthe price of potatoes is fixed for the whole of the growing season.
4. Dthe grower has no costs at all to meet until the crop is harvested.

1. Athe government charges a higher rate of tax on ethical businesses.
2. Bsuppliers refuse to give credit to an enterprise that pays them on time.
3. Cfair wages, safe conditions and proper waste disposal all cost money.
4. Dcustomers pay less for goods that are made by a responsible enterprise.

1. Aan ethical enterprise is exempt from inspection by the authorities.
2. Bethical conduct costs an enterprise nothing at all to put in place.
3. Ca reputation lost through unethical conduct is expensive to rebuild.
4. Dcustomers are unable to tell how an enterprise treats its own workers.

1. Aa legal requirement that every adult must register a business.
2. Ba shortage of formal jobs, which pushes people to work for themselves.
3. Can abundance of cheap long-term finance offered by the banks.
4. Dan obligation on employers to release staff to start their own businesses.

1. Athe wish to receive a salary that is paid at the end of each month.
2. Bthe wish to avoid paying any tax at all on the income they earn.
3. Cthe wish to work fewer hours than an employee normally works.
4. Dthe wish to take their own decisions and to be their own boss.

1. Aset the prices at which small enterprises are able to sell goods.
2. Blower the cost of reaching customers and of taking payment.
3. Csupply the start-up capital that a new enterprise needs to begin.
4. Dremove the need for an enterprise to hold any stock at all.