Business Studies 0450/11 October/November 2025: question paper and mark scheme

Mark scheme

1(a) Define ‘trade union’. 2 For two marks needs the idea of who is involved (a group/organisation of workers) and why it exists (protect Award 2 marks for a full definition. Award 1 mark for a partial their rights/ interests). definition. • Group of workers who join together to ensure their interests are protected [2] • An organisation of employees aimed at improving pay and working conditions [2] • An organisation that exists to provide workplace support for its members [2] Partial definition e.g. • Group of workers/employees (who join together) [1] • People/organisation who fight for employee/worker rights [1] • Stand for worker`s rights/protect workers [1] • Group of people who protect workers [1] • An organisation that ensures workers’ rights are not violated [1] 1(b) Define ‘secondary sector’. 2 Do not award examples of manufactured goods Award 2 marks for a full definition. Award 1 mark for a partial definition. Businesses that: • Process/manufacture goods from natural resources [2] • Manufacture goods using the raw materials provided by the primary sector [2] • Use manufacturing to transform the raw materials generated in the primary sector into a product [2] • Converts raw materials into manufactured goods [2] Partial definition e.g. • Makes products [1] • Manufactures goods [1] • Refines/processes raw materials [1] 1(c) Identify four reasons why a business might remain 4 Only award the first four responses given. small. Do not award vague statements such as less stressful/have Award 1 mark per reason (max 4). more free time/less likely to have communication issues. Points might include: • Limited access to/lack of capital (to expand) • Limited access to/lack of suitable labour • Limited access to/lack of suitable land • Limited access to/lack of suitable resources/raw materials • Personal preference / owners’ choice / owner does not want the responsibility / wants to keep control • Lack of skills/knowledge/experience (to expand) • Size of the market / amount of customers / level of demand / small market • To maintain close customers relationships / provide a personal service / type of industry • Some large firms dominate the market / low market share / too much competition • Can be flexible / respond quickly to changes in customer tastes • No economies of scale / to avoid diseconomies of scale • Operating at maximum possible output Other appropriate responses should be credited. 1(d) Explain two possible effects of WMH introducing new 6 To use words from the stem as application, the reference technology. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for identification of each relevant effect (max 2). The following words are likely to be appropriate for this Award 1 mark for each relevant reference to this business question: (max 2). • Furniture or related words such as tables/chairs Award 1 mark for each relevant explanation (max 2). • Trade union • Factory Points might include: • Small business Positive effects: • Secondary sector/manufacturing • Improve quality / less waste / fewer mistakes [k] leading • Location is important to a better reputation [an] for its furniture [app] • Increases productivity / efficiency / quicker production Other appropriate examples can be credited. [k] leading to lower (average) costs [an] for this small business [app] Some points can be [k] or [an] but do not award the same • Improved communication [k] leading to fewer mistakes / point twice. better efficiency [an] in the factory [app] • Can design new products [k] which may increase sales / Some analysis can be used for more than one point, but access new markets [an] only award once. • Greater job satisfaction/motivation [k] reducing absenteeism/lowering labour turnover [an] • Employees may gain new skills [k] leading to higher pay/chances of promotion [an] • Reduces time/costs to design new products [k] • Increase output [k] • Safer workplace [k] 1(d) Negative effects: • Purchasing new equipment / expensive to buy/set up [k] increasing cash outflows/debt [an] • Need to train workers [k] which can increase costs [an] • If technology is rapidly changing it will need to change often to remain competitive [k] which will increase costs [an] • Some employees may lose their jobs/made redundant [k] • May demotivate employees [k] Other appropriate responses should be credited. 1(e) Explain two factors a manufacturing business should This is a general question so there are no marks for consider when deciding on a suitable location for a application factory. Which factor is likely to be the most important? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award up to 2 marks for justified decision as to which location factor is likely to be the most important for a manufacturing business. 1(e) Points might include: 6 . • Access to skilled labour [k] as may be difficult to find/recruit / could increase recruitment/labour costs [an] • Access to raw materials/components [k] so production is not delayed [an] • Availability / rent of suitable land [k] which could restrict size of factory / increase fixed costs [an] • Good transport links [k] to ensure materials arrive / products sent when needed [an] • Proximity to market [k] to ensure sales/revenue can be made [an] • Type of product [k] a fragile/heavy product may need to be closer to customers to reduce risk of damage/cost [an] • Government grants [k] which could help reduce costs [an] • Legal controls [k] which may prevent the business from locating in certain areas [an] • Access to utilities/power/water [k] as needed for production [an] • Trade barriers [k] • Security of the area/level of crime [k] Other appropriate responses should be credited. Justification might include: Skilled labour [k] if difficult to find could increase recruitment costs [an]. Another factor is availability of suitable land [k] which could restrict the size of the factory [an]. Having suitable land is more important because this might limit output which could reduce its ability to meet demand [eval] whereas a business can train employees, and the extra cost might be covered by the additional revenue gained [eval].

Mark scheme

2(a) Define ‘import tariff’. 2 First mark is for understanding this is a tax. Award 2 marks for a full definition. Award 1 mark for a partial definition. • A tax (placed) on imported goods [2] • A tax applied to the value of imported goods [2] • A specific form of tax imposed/charged on imported goods [2] Partial definition: • A type of tax [1] 2(b) Identify one non-current asset and one current liability. 2 Only award the first responses given for each. Award 1 mark per non-current asset/current liability (max 2). Points might include: Non-current assets: • Machinery • Equipment • Land • Buildings/shops/factories/offices • Motor vehicles/delivery vehicles Current liabilities: • Overdraft • Short-term loan • Trade payables (creditors) Other appropriate responses should be credited. 2(c) Outline two ways the information in Table 2.1 might be 4 To use words from the stem as application, the reference useful to CPW. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for each relevant way (max 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: • Private sector business Points might include: • Electrical goods or examples such as kettles/ovens • Show value of liabilities/what the business owes [k] as • (36) shops has current liabilities of $110 million [app] • (Inventory from) local suppliers • Show value of assets/what the business owns [k] which • Import tariffs is $190 million [app] • Delivery (service) • Support loan application/help raise finance [k] for the 10 • (10) vehicles vehicles [app] • Source of finance • Calculate working capital/current assets minus current • Local suppliers liabilities [k] of this private sector business [app] • $75 million (non-current liabilities) • Show how the business finances its activities [k] when • $120 million (non-current assets) selling kettles/ovens [app] • $110 million (current liabilities) • Calculate current ratio/ratio of current assets to current • $70 million (current assets) liabilities [k] 0.63:1/0.64:1 [app] • 0.63:1/0.64:1 (current ratio) • Compare performance with other businesses [k] • $190 million (value of assets) • Compare performance over time/against other years [k] • Negative $40 million (working capital) • Show value of the business/capital employed [k] • $80 million (capital employed) $80 million [app] • $5 million (equity) • Equity/owners capital [k] of $5 million [app] Other appropriate examples can be credited. Other appropriate responses should be credited. Can award ‘assess liquidity’ where no individual liquidity ratios identified. 2(d) Explain two factors CPW should consider when 6 To use words from the stem as application, the reference deciding on a source of finance for the new vehicles. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for identification of each relevant factor (max 2). The following words are likely to be appropriate for this Award 1 mark for each relevant reference to this business question: (max 2). • Private sector (business) Award 1 mark for each relevant explanation (max 2). • Electrical goods (business) • (36) shops Points might include: • 10 (vehicles) • Amount required [k] for the 10 (vehicles) [app] because • (Inventory from) local suppliers this is a large amount a bank loan/selling non-current • Import tariffs assets maybe required [an] • Delivery (service) • Current level of borrowing/loans [k] as the bank might • $75 million (non-current liabilities) not be willing to lend extra finance [an] when have non- • $120 million (non-current assets) current liabilities of $75 million [app] • $110 million (current liabilities) • Time period [k] as the vehicles may be needed for the • $70 million (current assets) long-term, the source needs to be long-term [an] to make deliveries [app] Other appropriate examples can be credited. • Cost of finance/is it affordable [k] as high interest rates could increase cash outflows/expenses [an] adding to its current liabilities of $110 million [an] • Size/legal form of the business [k] of this private sector business [app] • Security/collateral needed [k] • Level of control [k] • How urgently the funds are required [k] Other appropriate responses should be credited. 2(e) Explain two objectives a private sector business might 6 This is a general question so there are no marks for have. Which objective is likely to be the most application. important? Justify your answer. Analysis could focus on explaining what the objective is or Award up to 2 marks for identification of relevant points. advantages of that objective. Award up to 2 marks for relevant development of points. Award up to 2 marks for justified decision as to which Some points can be awarded as [k] or [an] e.g. break-even objective is likely to be the most important. but only award once. Points might include: • Survival/stay in business [k] to breakeven/ensure costs are covered [an] • Make a profit [k] when revenue exceeds total costs [an] • Growth/expansion [k] as this can help spread risk [an] • Increase sales [k] as this can lead to higher revenue [an] which is necessary to cover costs [an] • Increase market share [k] which could provide an opportunity to control prices/dominate the market [an] • Socially/ethically/environmentally responsible / provide a service (to the community) [k] • Increase returns to shareholders/owners [k] to encourage investment [an] • Increase brand image / reputation / increase brand awareness [k] • Increase customer loyalty [k] • Customer satisfaction [k] Justification might include: One objective is survival [k] to ensure costs are covered [an]. Another objective is making a profit [k] to provide a source of finance [an]. Survival is likely to be the most important objective for private sector business as they may operate in a competitive market [eval.] Without survival, there is no opportunity to make profit in the long term [eval].

Mark scheme

3(a) Identify X and Y. 2 Only award the first response given for each. Award 1 mark for each correct answer. X: Break-even (point) Y: (Total) revenue 3(b) Define ‘margin of safety’. 2 Award 2 marks for a full definition. Award 1 mark for a partial definition. • The difference between the current level of output/sales and break-even output/sales [2] • The amount by which sales exceed the break-even point [2] Partial definition e.g. • Difference between total output and break-even point [1] • Number of units that exceed break-even output [1] 3(c) Outline two advantages of Vicki delegating tasks to her 4 To use words from the stem as application, the reference employees. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for each relevant advantage (max 2). Award 1 mark for each relevant reference to this business The following words are likely to be appropriate for this (max 2). question: • (Fast) food/restaurant Points might include: • (Chicken) burgers • Motivate employees [k] helping increase sales above • 14 employees 900 units [app] • 900 (meals a week) • Develop employee skills / increase flexibility of • 500/break-even workforce [k] when making burgers [app] • 400/margin of safety • Builds trust between the owner and her employees / • Training better working relations [k] • (Economic) recession • The owner cannot do all tasks alone / reduces her workload / she has time to focus on other tasks [k] such Other appropriate examples can be credited. as completing the break-even chart [app] • Quality of the owner’s work is often improved / she is less likely to make mistakes [k] at the restaurant [app] • She can measure performance/success of employees [k] Other appropriate responses should be credited. 3(d) Explain two possible effects of an economic recession 6 To use words from the stem as application, the reference on Vicki’s business. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for identification of each relevant method (max 2). The following words are likely to be appropriate for this Award 1 mark for each relevant reference to this business question: (max 2). • (Fast) food/restaurant Award 1 mark for each relevant explanation (max 2). • (Chicken) burgers • 14 employees Points might include: • Delegation • Lower/fewer sales [k] leading to lower revenue [an] from • 900 (meals a week) selling burgers [app] • 500 (break-even output) • May need to lower costs [k] as revenue is likely to be • 400 (margin of safety) falling [an] for the restaurant [app] • More workers available to select from [k] so may be Other appropriate examples can be credited. able to lower labour costs [an] of the 14 employees [app] Some points can be [k] or [an] but only award once. • Workers may be made redundant / reduce workforce / downsize [k] which could demotivate other workers [an] Effects can be positive or negative, but mirror answers can • Low business confidence [k] so less willing/likely to only be credited once. invest [an] • The business may fail / hard to survive [k] so may lose their investment [an] • May have cash flow problems [k] so cannot pay day-to- day costs [an] • May have to lower prices [k] • May delay any expansion plans [k] • Banks may not be willing to lend [k] • May change objective to survival [k] • Lower profit [k] so less funds to invest [an] Other appropriate responses should be credited. 3(e) Explain two methods of training a business might use. 6 This is a general question so there are no marks for Which is likely to be the best method for a service application. business to use? Justify your answer. Points can refer to the business or employee. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Analysis can be awarded for explaining the Award up to 2 marks for a justified decision as to which is method/advantages/disadvantages of using the named likely to be the best method for a service business to use. method. Points might include: Some points can be written as an advantage of one method, On-the-job training [k] or a disadvantage of another - only award once. • Being trained in the workplace [an] • Watching a more experienced worker doing the job [an] • Allows business specific training to be given [an] • Low(er) cost [an] • Some work completed during training [an] • May learn bad habits from trainer [an] • Trainer may not be as productive as usual [an] Off-the-job training [k] • Being trained away from the workplace [an] • Allows employees to be trained by experts [an] • New/up-to-date skills/knowledge can be taught [an] • High(er) cost [an] • Wages paid but no work is being done [an] • Induction training [k] • Can help new employees understand / familiarise with the work/workplace/job role [an] • New workers settle into their job quickly [an] • Delays when start work [an] Other appropriate responses should be credited. 3(e) Justification might include: On-the-job training [k] is where trainees watch a more experienced worker [an]. Alternatively, off-the-job training [k] will teach up to date skills [an]. Off -the-job training is the best method as the business is more likely to improve productivity by learning the ideas [eval] whereas on-the-job training may lead to employees picking up bad habits so would have limited value [eval].

Mark scheme

4(a) Define ‘brand image’. 2 Award 2 marks for a full definition. Award 1 mark for a partial definition. • The image or identity given to a product/business which distinguishes it from its competitors brand [2] • Characteristics that distinguish a business from others through design or logo [2] • The general impression of a product/business held by consumers [2] • Personality given to a product/business through marketing activities [2] Partial definition e.g. • Identity given to a product/business [1] • How product/business is seen by others [1] • Characteristics that make a business unique [1] 4(b) Identify two reasons why some markets have become 2 Only award the first two responses given. more competitive. Award 1 mark for each relevant reason (max 2). Do not award: • Factors affecting demand or spending patterns such as Points might include: changes in population, changes in advertising or • Globalisation/growth of free trade agreements changes in prices. • Changes in technology or examples e.g. ecommerce/internet/social media Accept reduced barriers to entry once if no other specific reasons e.g. legal control/trade agreements • Changes in legal controls / more or fewer regulations / government intervention in the market • Transport improvements/infrastructure improvements Other appropriate responses should be credited. 4(c) Outline one way MTL could act ethically with each of the 4 To use words from the stem as application, the reference following stakeholder groups: must be appropriate (i.e. make sense) in relation to the point Employees being made. Customers The following words are likely to be appropriate for this Award 1 mark for each relevant way (max 2). question: Award 1 mark for each relevant reference to this business • (Children’s) toys (max 2). • 430 (employees) • Competitive market Points might include: • Large (business) Employees: • (Good) brand image • Pay fair/good wages [k] to its 430 employees [app] • New markets in other countries • Ensure fair/good working conditions [k] when making the • Methods of promotion toys [app] • Not employ child labour [k] Other appropriate examples can be credited. • Not use zero hours contracts [k] Customers: • Charge a fair price [k] which can help maintain its good brand image [app] • Not advertise misleading prices [k] when operating in a competitive market [app] Other appropriate responses should be credited. 4(d) Explain two problems MTL might have when entering a 6 To use words from the stem as application, the reference new market in another country. must be appropriate (i.e. make sense) in relation to the point being made. Award 1 mark for identification of each relevant problem (max 2). The following words are likely to be appropriate for this Award 1 mark for each relevant reference to this business question: (max 2). • (Children’s) toys Award 1 mark for each relevant explanation (max 2). • Ethical • Stakeholder groups Points might include: • 430 employees • Lack of market knowledge [k] so may not be aware of • (Good) brand image competitors’ pricing/promotion [an] for toys [app] • Large (business) • Language differences) [k] so it may have to • Methods of promotion translate/change wording on the packaging [an] to explain how it is ethical [app] Other appropriate examples can be credited. • Cultural differences [k] so product may not sell there [an] which could damage its brand image [app] Some points can be [k] or [an] but only award once. • Changes in exchange rates [k] may make it difficult to set prices [an] for this large business [app] Some [an] can be used for different points, but only award • Different legal controls [k] which could restrict what/how once. they can sell [an] • Import restrictions or examples such as quotas [k] which could restrict the number of products they can import [an] • Economic differences e.g. average income, stage in business cycle [k] • Social differences e.g. age structure [k] • Increased transport costs [k] as products may have to be transported over long distances [an] • Level of competition [k] • Lack of recognition of the business [k] • High taxes [k] • Difficulty in locating suppliers [k] 4(d) • Increased risk of non-payment/incorrect payment [k] as methods of payment are likely to be different between each country [an] Other appropriate responses should be credited. 4(e) Explain two methods of promotion a business might This is a general question so there are no marks for use for its products. Which method is likely to be the application. best for a large business to use? Justify your answer. Some analysis can be used for more than one method, but Award up to 2 marks for identification of relevant points. only award once. Award up to 2 marks for relevant development of points. Award up to 2 marks for a justified decision as to which Analysis can be awarded for explaining: method is likely to be the best one for a large business to • Advantages of methods use. • Disadvantages of methods • How the method works 4(e) Points might include: 6 • Television [k] is expensive/can include moving images to attract attention [an] • Magazines [k] as able to target specific types of customers [an] • Discount offers/promotional pricing/ (money off) coupons/loyalty card [k] which can make the products more affordable [an] • Social media/internet-based advertising/influencers [k] to reach large numbers of people [an] • Leaflets [k] as this is a low-cost method [an] • Posters/billboards [k] as can be seen by everyone who is passing by [an] • Point of sale displays/demonstrations [k] as this allows the customer to be shown how it is used [an] • Radio advertising [k] which allows them to target specific regions [an] • Newspapers [k] • Gifts [k] • Sponsorship [k] • Competitions [k] encourage customer to buy to receive a reward/win [an] • Free samples [k] increase costs [an] • BOGOF [k] • After-sales service [k] Other appropriate responses should be credited. Justification might include: Television [k] as able to include moving images to attract attention [an]. Another method is posters [k] as it can be seen by everyone who is passing by [an]. Television is the best method as this is a large business so it should be able to afford the cost involved [eval] and is likely to reach far more people than a poster [eval].