Understanding business activity

Worked examples (6)

• 1Define needs and wants (2 marks)
• 2Identify the factors of production and their rewards (4 marks)
• 3Calculate added value and explain how to increase it (6 marks)
• 4Explain two benefits of specialisation, applied (8 marks)
• 5Evaluation: is profit the main purpose of business activity? (12 marks)
• 6Evaluation: oven vs second branch — which should the bakery choose? (12 marks)

Model answers (6)

• ✓Model answer — Paper 1, part (a) style
• ✓Model answer — Paper 1, part (b) style
• ✓Model answer — Paper 1 analysis style
• ✓Model answer — Paper 2, part (a) style — 8 marks (applied)
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'

Worked examples (6)

• 1Define the secondary sector (2 marks)
• 2Distinguish the public and private sectors (4 marks)
• 3Trace the chain of production for bread (6 marks)
• 4Explain why the sector mix changes as a country develops (8 marks)
• 5Evaluation: should a key utility be public or private sector? (12 marks)
• 6Evaluation: is the growth of the tertiary sector always good? (12 marks)

Model answers (6)

• ✓Model answer — Paper 1, part (a) style
• ✓Model answer — Paper 1, part (b) style
• ✓Model answer — Paper 1 analysis style
• ✓Model answer — Paper 2, part (a) style — 8 marks (applied)
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'

Worked examples (6)

• 1Define 'entrepreneur' (2 marks)
• 2Identify and explain entrepreneur characteristics (4 marks)
• 3Methods of measuring business size and their limits (6 marks)
• 4Explain why a business might remain small, applied (8 marks)
• 5Evaluation: internal vs external growth — which to choose? (12 marks)
• 6Evaluation: is lack of finance the main cause of business failure? (12 marks)

Model answers (6)

• ✓Model answer — Paper 1, part (a) style
• ✓Model answer — Paper 1, part (b) style
• ✓Model answer — Paper 1 analysis style
• ✓Model answer — Paper 2, part (a) style — 8 marks (applied)
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'

Worked examples (6)

• 1Define 'limited liability' (2 marks)
• 2Explain advantages of being a sole trader (4 marks)
• 3Franchise — definition, pros and cons (6 marks)
• 4Explain why a business changes from sole trader to Ltd (8 marks)
• 5Evaluation: sole trader, partnership or Ltd for a new business? (12 marks)
• 6Evaluation: should a company become a plc to grow? (12 marks)

Model answers (6)

• ✓Model answer — Paper 1, part (a) style
• ✓Model answer — Paper 1, part (b) style
• ✓Model answer — Paper 1 analysis style
• ✓Model answer — Paper 2, part (a) style — 8 marks (applied)
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'

Worked examples (6)

• 1Define 'stakeholder' (2 marks)
• 2Explain business objectives (4 marks)
• 3Identify stakeholders and their interests (6 marks)
• 4Explain stakeholder effects of a cost-cutting decision (8 marks)
• 5Evaluation: should a business always put shareholders first? (12 marks)
• 6Evaluation: is growth the right objective now? (12 marks)

Model answers (6)

• ✓Model answer — Paper 1, part (a) style
• ✓Model answer — Paper 1, part (b) style
• ✓Model answer — Paper 1 analysis style
• ✓Model answer — Paper 2, part (a) style — 8 marks (applied)
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'
• ✓Model answer — Paper 2, part (b) style — 12 marks, 'Justify your answer'