ANZ is a large multinational company which manufactures aeroplanes. Growth is an important objective for the company. ANZ wants to start producing in country P for the first time. The new factory will operate for 24 hours a day. A pressure group in country P believes that all business activity is bad for the environment. It wants the Government to do more to control business activity. What is meant by ‘pressure group’? Identify two measures a Government could use to control business activity. Measure 1: Measure 2: Identify and explain two reasons why objectives are important to businesses such as ANZ. Reason 1: Explanation: Reason 2: Explanation: Identify and explain three advantages for country P of ANZ’s decision to open a new factory. Advantage 1: Explanation: Advantage 2: Explanation: Advantage 3: Explanation: Do you think that all business activity is bad for the environment? Justify your answer.

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THEORY

2013

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Greenfield manufactures furniture. The company imports wood and other raw materials from several countries. Marcos is the Managing Director of Greenfield. Marcos said that his company was affected by import quotas and changes in exchange rates. He said: ‘Greenfield has to buy its raw materials from other countries as there are no timber resources in our own country.’ What is meant by ‘import quota’? Identify two ways that Greenfield’s business might harm the environment. Way 1: Way 2: Identify and explain two ways in which changes in exchange rates could cause problems for Greenfield. Way 1: Explanation: Way 2: Explanation: The Government in Greenfield’s country is introducing consumer protection laws. Identify and explain three ways in which Greenfield’s business could be affected by these new laws. Way 1: Explanation: Way 2: Explanation: Way 3: Explanation: Greenfield’s management is thinking of expanding the business by taking over another furniture manufacturer. Do you think this is a good idea for Greenfield? Justify your answer.

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THEORY

2012

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SJD is in the private sector. It makes steel for construction businesses. SJD plans to make 3500 of its 9000 employees redundant. The Operations Director said: ‘Cheap steel imports and high business tax rates are affecting our business. There are also ethical issues that we must respond to. The Government should do more to help steel producers. Some of our competitors plan to close their factories and relocate to other countries. SJD may have to do the same.’ Identify two situations in which downsizing the workforce might be necessary. Situation 1: Situation 2: Identify two possible ethical issues that SJD might have to respond to. Issue 1: Issue 2: Identify and explain two possible problems for SJD if it decides to relocate its business. Problem 1: Explanation: Problem 2: Explanation: 1 1 Explain how each of the following factors might affect SJD’s business. High business tax rates: Explanation: Cheap imports: Explanation: Do you think the Government should help businesses like SJD? Justify your answer. [ 1 1

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THEORY

2018

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CFG is a social enterprise. It buys cocoa beans from local farmers and then uses the beans to make chocolate. Being ethical is important to the business. CFG has developed a new chocolate bar. The Marketing Manager plans to use skimming as its pricing method, and retailers as its distribution channel for the new product. He knows there are many legal controls over marketing that might affect a business. Define ‘social enterprise’. Identify two ways legal controls over marketing might affect a business. Way 1: Way 2: Outline one advantage and one disadvantage to CFG of using skimming as its pricing method. Advantage: Disadvantage: 1 2 Explain one advantage and one disadvantage to CFG of using retailers as its distribution channel for the new product. Advantage: Explanation: Disadvantage: Explanation: Do you think being ethical will always lead to lower profit for a business? Justify your answer. 1 2

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THEORY

2024

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Country W has a mixed economy. Herio is a Government economist. He said: ‘Business activity in the private sector can lead to external costs, such as pollution. It can also create external benefits. I believe that businesses that create external benefits should be encouraged and those that create external costs should be closed down.’ Country W has low economic growth and rising inflation. What is meant by ‘the private sector’? What is meant by ‘rising inflation’? Most businesses set objectives. Identify and explain two reasons why having objectives may be important for a business. Reason 1: Explanation: Reason 2: Explanation: Identify three external benefits and explain how business activity can create each benefit. Benefit 1: Explanation of how benefit is created: Benefit 2: Explanation of how benefit is created: Benefit 3: Explanation of how benefit is created: Herio believes businesses that create external costs should be closed down. Do you agree with him? Justify your answer.

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THEORY

2012

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APQ is a multinational company. It makes chemicals that are sold to farmers which help increase the amount of food produced. It plans to open a factory in country X, a developing country with low interest rates. The Finance Director said: ‘This factory will create many external benefits. APQ is a public limited company which tries to act in an ethical way with all its stakeholder groups.' The new factory will cost $100m and there will be an opportunity cost for APQ. The Finance Director cannot decide which source of finance to use for the new factory. What is meant by ‘opportunity cost’? Identify two possible external benefits that might result from the new factory. Benefit 1: Benefit 2: Identify and explain two advantages to APQ of being a multinational company. Advantage 1: Explanation: Advantage 2: Explanation: 1 3 Identify two stakeholder groups of APQ. Explain how APQ could act in an ethical way with each stakeholder group. Stakeholder group 1: Explanation: Stakeholder group 2: Explanation: Explain two suitable sources of finance that APQ could use for the new factory. Recommend which source of finance APQ should use. Justify your answer. [ 1 3

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THEORY

2016

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FTT is a social enterprise. It sells its high quality fair-trade coffee beans to retailers in country P. Being ethical is important to FTT. It provides local people with information about micro-finance and skills so they can then start growing beans for FTT to sell for them. FTT wants to start exporting coffee beans as its market research shows increasing demand for coffee in other countries. FTT’s managers will have to decide on an appropriate pricing method to use when selling the coffee beans in other countries. What is meant by ‘social enterprise’? What is meant by ‘micro-finance’? Identify and explain two factors that might affect the accuracy of FTT’s market research. Factor 1: Explanation: Factor 2: Explanation: 1 1 Identify and explain two ways in which being ethical might help FTT. Way 1: Explanation: Way 2: Explanation: Recommend an appropriate pricing method for FTT to use if it starts selling in other countries. Justify your answer. [ 1 1

7115_w18_qp_12

THEORY

2018

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EQR owns 150 cafes. It sells a range of drinks including coffee. Being ethical is important to EQR. The Managing Director has been analysing EQR’s statement of financial position. The business has the objective to increase its 6% market share. The Managing Director plans to grow the business by selling franchises for $85000. She is also considering ways to increase added value. Define ‘market share’. Define ‘statement of financial position’. Outline two ways EQR could increase added value. Way 1: Way 2: 1 2 Explain two advantages to EQR of selling franchises as a way to grow its business. Advantage 1: Explanation: Advantage 2: Explanation: Do you think a business being ethical will always lead to lower profits? Justify your answer. [ 1 2

7115_w22_qp_12

THEORY

2022

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FSW is a multinational company with operations in 6 countries. It manufactures steel for use in the construction industry. Quality assurance is used to ensure quality production. FSW has many stakeholder groups who are interested in its activities. The Managing Director knows FSW’s business creates external costs. She is aware that pressure groups try to influence business decisions. Define ‘external costs’. Identify one objective each of the following stakeholder groups might have: Employees: Customers: Identify four ways a pressure group might try to influence business decisions. Way 1: Way 2: Way 3: Way 4: Explain one possible benefit and one possible drawback to a country of having FSW (a multinational company) operating there. Benefit: Explanation: Drawback: Explanation: Do you think quality assurance is the best way for a business to achieve quality production? Justify your answer.

7115_w24_qp_11

THEORY

2024

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SNT is an ethical business. It manufactures a range of soft drinks using batch production. In 2023 SNT produced 300000 bottles of soft drinks each week. There are many factors which affect how much inventory the business should hold. SNT’s directors are planning to expand the business into new markets in other countries by forming a joint venture. They are considering licensing as another way to help overcome the potential problems of entering these new markets. Define ‘licensing’. Identify two factors which might affect how much inventory a business should hold. Factor 1: Factor 2: Outline two benefits to SNT of using batch production. Benefit 1: Benefit 2: Explain one advantage and one disadvantage to SNT of forming a joint venture when entering new markets in other countries. Advantage: Explanation: Disadvantage: Explanation: Do you think the advantages to a business of being ethical are greater than the disadvantages? Justify your answer.

7115_w24_qp_12

THEORY

2024

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