Cambridge IGCSE Business Studies 0450: Command words and keywords

Cambridge IGCSE Business Studies (0450) uses the standard Cambridge command words. Examiner reports consistently highlight that candidates lose marks through weak understanding of business terminology and incorrect response to command words. Application must be linked to the context in the question—each application can only be credited once per question.

Command words in Business Studies 0450

Command word	What to do in Business Studies	Common mistake
State	Short answer; one point per mark	Overwriting
Identify	Choose from case study or knowledge	Adding explanation
Define	Precise business meaning	Vague or everyday language
Describe	What the business does or what happens; no “why”	Adding explanation
Explain	Why or how; use “because”	Only describing
Suggest	Apply to the case study; propose reasons	Generic textbook answer
Compare	Similarities and differences	Listing separately
Analyse	Break down; show relationships	Only describing
Evaluate	Judge; conclude with justified decision	Repetition of explained points; no conclusion
Discuss	Explore aspects; reach conclusion	One-sided
Calculate	Work out; show working; units	Missing working or formula
Outline	Main points only	Too much detail
Justify	Support with evidence from case study	Unsupported claim

Critical: Application (AO2)

For parts (c) and (d), each point must be linked to the context in the question stem. Use different applications for each knowledge point—each application can only be credited once per question. Examiner reports note that candidates often waste time with unnecessary application in part (e) questions, which no longer include marks for application.

Critical: Evaluation (part e)

Effective evaluation requires a justified decision that follows from points raised in the answer—not mere repetition of previously explained points. The mark scheme includes examples of acceptable evaluation approaches.

Business keywords examiners look for

Examiner reports identify working capital, break-even analysis and added value as concepts where terminology causes confusion. Learn precise definitions.

Enterprise and business structure

Term	Use correctly	Avoid
Entrepreneur	Person who takes risk to start a business	”Business owner”
Primary sector	Extraction of raw materials	”Farming” (narrow)
Secondary sector	Manufacturing	”Factories”
Tertiary sector	Services	Secondary
Sole trader	One owner; unlimited liability	”Small business”
Partnership	2–20 owners; shared liability	Sole trader
Private limited company	Ltd; shares not on stock exchange	Public limited
Public limited company	Plc; shares on stock exchange	Pvt Ltd
Franchise	Right to use business name and system	”Branch”
Stakeholder	Person/group with interest in business	”Shareholder” only
Shareholder	Owner of shares	Stakeholder (broader)

Finance and accounting

Term	Use correctly	Avoid
Working capital	Current assets minus current liabilities	”Money in bank”
Current assets	Cash, stock, debtors	Fixed assets
Current liabilities	Debts due within one year	Long-term
Break-even	Output where total revenue = total cost	”Making no profit” (incomplete)
Break-even point	Level of output where no profit/loss	Wrong formula
Fixed costs	Do not vary with output	Variable costs
Variable costs	Vary with output	Fixed costs
Contribution	Selling price minus variable cost per unit	”Profit”
Profit	Revenue minus total costs	”Money made”
Cash flow	Movement of cash in and out	Profit
Cash flow forecast	Estimate of future cash flows	”Budget”
Liquidity	Ability to pay short-term debts	”Having cash”
Added value	Selling price minus cost of bought-in materials	”Profit”
Gross profit	Revenue minus cost of sales	Net profit
Net profit	Gross profit minus expenses	Gross profit
Retained profit	Profit kept in business	”Savings”
Overdraft	Negative balance; short-term borrowing	Loan

Marketing

Term	Use correctly	Avoid
Market research	Collecting information about market	”Survey”
Primary research	Data collected first-hand	Secondary
Secondary research	Data already collected	Primary
Market segment	Group with similar characteristics	”Customers”
Target market	Specific group business aims at	”Everyone”
Marketing mix	Product, Price, Place, Promotion	”4 Ps” only
Brand	Identity that distinguishes product	”Logo”
Product life cycle	Stages from launch to decline	”Life of product”

Operations and human resources

Term	Use correctly	Avoid
Division of labour	Workers specialise in specific tasks	Specialisation (related but different)
Specialisation	Concentrating on what you do best	Division of labour
Productivity	Output per worker/hour	”Efficiency”
Quality	Meeting customer expectations	”Good”
Motivation	Willingness to work	”Pay”
Recruitment	Process of hiring staff	”Hiring”
Training	Improving skills	”Teaching”
Redundancy	Job no longer needed	”Sacking”
Dismissal	Firing for misconduct/performance	Redundancy

What examiner reports say

• Define—precise business definitions; avoid confusion (e.g. specialisation vs division of labour, cash flow vs cash flow problems).
• Application—link each point to the case study; different applications per point; part (e) no longer has application marks.
• Evaluation—justified decision from points raised; not repetition.
• Answer the question—candidates often use own knowledge instead of addressing what was asked.
• Weak topics—1.3.3, 1.4.1, 6.2.1, 6.3.1 show limited knowledge.

Tips for Business Studies 0450

1. Underline the command word and any limits (e.g. “two reasons”).
2. Define precisely—e.g. “Working capital is current assets minus current liabilities.”
3. Link to context for application—refer to the case study.
4. Evaluate with justification—conclude from your analysis.
5. Don’t over-apply in part (e)—evaluation only.
6. Past papers + mark schemes show acceptable wording.

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Based on Cambridge IGCSE Business Studies 0450 syllabus and examiner reports. Check the latest syllabus for your exam series.