Cambridge IGCSE ™: Business Studies 0450/12 October/November 2022

Cambridge IGCSE™
BUSINESS STUDIES 0450/12

Paper 1 Short Answer/Data Response October/November 2022
MARK SCHEME
Maximum Mark: 80
Published
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.
Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.
Cambridge International will not enter into discussions about these mark schemes.
Cambridge International is publishing the mark schemes for the October/November 2022 series for most
Cambridge IGCSE™, Cambridge International A and AS Level components and some Cambridge O Level
components.
This document consists of 21 printed pages.
© UCLES 2022 [Turn over

0450/12 Cambridge IGCSE – Mark Scheme October/November 2022
PUBLISHED
Generic Marking Principles
These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the
specific content of the mark scheme or generic level descriptors for a question. Each question paper and mark scheme will also comply with these
marking principles.
GENERIC MARKING PRINCIPLE 1:
Marks must be awarded in line with:
• the specific content of the mark scheme or the generic level descriptors for the question
• the specific skills defined in the mark scheme or in the generic level descriptors for the question
• the standard of response required by a candidate as exemplified by the standardisation scripts.
Marks awarded are always whole marks (not half marks, or other fractions).
Marks must be awarded positively:
• marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond the
scope of the syllabus and mark scheme, referring to your Team Leader as appropriate
• marks are awarded when candidates clearly demonstrate what they know and can do
• marks are not deducted for errors
• marks are not deducted for omissions
• answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the
question as indicated by the mark scheme. The meaning, however, should be unambiguous.
Rules must be applied consistently, e.g. in situations where candidates have not followed instructions or in the application of generic level
descriptors.
© UCLES 2022 Page 2 of 21

PUBLISHED
Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may
be limited according to the quality of the candidate responses seen).
Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or
grade descriptors in mind.

PUBLISHED
Social Science-Specific Marking Principles
(for point-based marking)
1 Components using point-based marking:

• Point marking is often used to reward knowledge, understanding and application of skills. We give credit where the candidate’s answer
shows relevant knowledge, understanding and application of skills in answering the question. We do not give credit where the answer
shows confusion.
From this it follows that we:
a DO credit answers which are worded differently from the mark scheme if they clearly convey the same meaning (unless the mark
scheme requires a specific term)
b DO credit alternative answers/examples which are not written in the mark scheme if they are correct
c DO credit answers where candidates give more than one correct answer in one prompt/numbered/scaffolded space where extended
writing is required rather than list-type answers. For example, questions that require n reasons (e.g. State two reasons …).
d DO NOT credit answers simply for using a ‘key term’ unless that is all that is required. (Check for evidence it is understood and not used
wrongly.)
e DO NOT credit answers which are obviously self-contradicting or trying to cover all possibilities
f DO NOT give further credit for what is effectively repetition of a correct point already credited unless the language itself is being tested.
This applies equally to ‘mirror statements’ (i.e. polluted/not polluted).
g DO NOT require spellings to be correct, unless this is part of the test. However spellings of syllabus terms must allow for clear and
unambiguous separation from other syllabus terms with which they may be confused (e.g. Corrasion/Corrosion)
2 Presentation of mark scheme:

• Slashes (/) or the word ‘or’ separate alternative ways of making the same point.
• Semi colons (;) bullet points (•) or figures in brackets (1) separate different points.
• Content in the answer column in brackets is for examiner information/context to clarify the marking but is not required to earn the mark
(except Accounting syllabuses where they indicate negative numbers).

PUBLISHED
3 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.
4 Annotation:
• For point marking, ticks can be used to indicate correct answers and crosses can be used to indicate wrong answers. There is no direct
relationship between ticks and marks. Ticks have no defined meaning for levels of response marking.
• For levels of response marking, the level awarded should be annotated on the script.
• Other annotations will be used by examiners as agreed during standardisation, and the meaning will be understood by all examiners
who marked that paper.

PUBLISHED
0450/7115/0986 Business Studies – Paper 1 Annotations
Annotation Description Use
Tick Tick Indicates a point which is relevant and rewardable.
X Cross Indicates a point which is inaccurate/irrelevant and not rewardable.
BOD Benefit of doubt Used when the benefit of the doubt is given in order to reward a response.
TV Too vague Used when parts of the answer are considered to be too vague.
REP Repetition Indicates where content has been repeated.
NAQ Not answered Used when the answer or parts of the answer are not answering the question asked.
question
K Knowledge Indicates knowledge and understanding of the concepts and issues relating to the question.
APP Application Indicates appropriate reference to the information in the stem.
AN Analysis Indicates where the answer has demonstrated analysis.
EVAL Evaluation Indicates where the answer has demonstrated evaluation (part (e) questions only).
OFR Own figure rule If a mistake is made in a calculation, and the incorrect figure that results from the mistake is used for
subsequent calculations.
SEEN Noted but no Indicates that content has been recognised but not rewarded.
credit given

PUBLISHED
Question Answer Marks Notes
1(a) Define ‘market share’. 2
Award 2 marks for a full definition. Award 1 mark for a partial definition.
Percentage of total market sales held by one brand/business [2]

OR
The revenue of a business expressed as percentage of total market revenue [2]
OR
Percentage of total sales that a firm achieves in a market [2]
OR
Business sales / total market sales  100 [2]
Partial definition e.g. share of all sales made [1]
OR Percentage of customers/sales a business has [1]
1(b) Define ‘statement of financial position’. 2
Shows the value of a business’ assets and liabilities at a particular point in time
[2]
OR
An accounting statement that records assets, liabilities, and owners’
equity/capital of a business at a particular date [2]
Partial definition e.g. shows assets and liabilities (of a business) [1]
OR What a business owns and owes [1]

PUBLISHED
1(c) Outline two ways EQR could increase added value. 4 To use words from the stem as
application the reference must be
Award 1 mark for each relevant way (max 2). appropriate (i.e. make sense) in relation
to the point being made.
Award 1 mark for each relevant reference to this business (max 2).
The following words are likely to be
Points might include: appropriate for this question:
• Increase prices [k] at its cafes [app] • Cafes
• Reduce material/variable costs [k] of coffee [app] • 150 (locations)
• Branding/change packaging [k] which can also help when selling its • Coffee/drinks or examples e.g.
franchises [app] beans
• Excellent/better service [k] • Franchise
• Additional product features/improve design [k] • Ethical
• Convenience [k] • 6% (market share)
• $85 000
Other appropriate responses should also be credited.
Other appropriate examples in context
can still be credited.

PUBLISHED
1(d) Explain two advantages to EQR of selling franchises as a way to grow its 6 To use words from the stem as
business. application the reference must be
appropriate (i.e. make sense) in relation
Award 1 mark for identification of each relevant advantage (max 2). to the point being made.
Award 1 mark for each relevant explanation (max 2). The following words are likely to be
appropriate for this question:
Points might include: • Cafes
• Franchise fee must be paid / licence has to be bought [k] for a cafe [app] • 150 (locations)
providing funds for investment [an] • Coffee/drinks or examples e.g.
• Can expand at a faster rate [k] which can help increase its market share beans
[an] above 6% [app] • Ethical
• Receives royalties / share of (franchisee) profit [k] as well as the $85 000 • 6% (market share)
[app] • $85 000
• Not/franchisees responsible for day-to-day management [k] so have time to
focus on other issues [an] such as increasing added value [app] Other appropriate examples in context
• Increase brand awareness [k] of it being ethical [app] increasing sales [an] can still be credited.

PUBLISHED
1(e) Do you think a business being ethical will always lead to lower profits? 6 This is a general question so there are
Justify your answer. no marks for application.
Award up to 2 marks for identification of relevant points. For evaluation to be awarded

Award up to 2 marks for relevant development of points. justification will usually follow on from
Award up to 2 marks for a justified decision as to whether a business being relevant analysis of points.
ethical will always lead to lower profits.
Some points can be [k] or [an] but only
Points might include: award once.
• Enhance reputation/brand image [k] helps attract customers [an]
• Customers may pay higher prices [k] increasing revenue / which could help
cover the costs [an]
• Can help motivate employees [k] increasing productivity / reduces
absenteeism / lowers labour turnover [an]
• Can increase costs [k] leading to higher prices [an] which may lead to fewer
customers / sales [an]
• May not be sufficient materials / difficult to find ethical suppliers [k] reducing
output [an]
• Ethical suppliers may have higher prices / unethical suppliers may be
cheaper [k]
Justification might include:

Some customers may be prepared to pay extra for ethical products [k] this can
help offset the increase costs of trying to be ethical [k] so overall profit margin
may not change [an] and the better reputation gained could result in additional
sales [an]. Therefore, being ethical can benefit a business as in the long term
this may increase revenue [eval] which could result in higher profit overall [eval].

PUBLISHED
2(a) Define ‘revenue’. 2
Money coming in from selling a product over a given period of time [2]
OR
Amount of money a business earns from the sale of its products [2]
OR
Income of the business from the sale of goods or services [2]
OR
Price  quantity sold [2]
Partial definition e.g. income of the business [1]
2(b) Calculate Kemala’s profit margin. Show your working. 2 Award only 1 mark if 15% is written as
part of the answer but is not given as
Correct answer = 15% [2] the final answer.
Correct method but incorrect answer e.g. profit / revenue x 100 [1] OR 72 / 480  For both marks answer must include
100 [1] %.
If correct answer given with no working shown award 2 marks.

PUBLISHED
2(c) Outline two reasons why cash is important for Kemala’s business. 4 To use words from the stem as
Award 1 mark for each relevant reason (max 2). appropriate (i.e. make sense) in relation
Award 1 mark for each relevant reference to this business (max 2). to the point being made.
Points might include: The following words are likely to be

• Pay wages/employees [k] who make the beauty products [app] appropriate for this question:
• Pay suppliers/trade payables [k] to maintain high-quality [app] • Beauty products/hand cream
• Pay expenses/heating/rent/advertising [k] such as in specialist magazines • High-quality
[app] • $480 000
• Repay (short term) debts [k] • $192 000
• For use in an emergency [k] • $72 000
• Specialist/beauty magazine
Other appropriate responses should also be credited. • Started her business
Other appropriate examples in context

2(d) Explain two possible reasons why demand for Kemala’s best-selling 6 To use words from the stem as
product is price inelastic. application the reference must be
Award 1 mark for identification of each relevant point (max 2). to the point being made.
Points might include: • Beauty products/hand
• Unique/no (close) substitutes [k] as its high-quality [app] so an increase in cream/skincare
price is likely to result in a lower percentage change in demand [an] • High-quality
• Considered a necessity/need [k] so customers likely to remain brand loyal • $480 000
(even if the price increases) [an] for the hand cream [app] • $72 000
• Low proportion of income spent on product [k] so customers would still buy
(if the price increased) [an] increasing revenue above $480 000 [app] Other appropriate examples in context

PUBLISHED
2(e) Do you think advertising in specialist magazines is the best way for a 6 This is a general question so there are
business to promote high-quality products? Justify your answer. no marks for application.
Award up to 2 marks for identification of relevant points . For evaluation to be awarded

Award up to 2 marks for a justified decision as to whether advertising in relevant analysis of points.
specialist magazines is the best way for a business to promote high-quality
products. Some points could be awarded for
different options, and some could be
Points might include: presented as either [k] or [an] but only
Specialist magazines award once.
• Attract specific customers/target market [k] increasing sales [an]
• Able to use colour/pictures [k] which can help attract attention [an]
• Can keep for future reference [k]
• Magazines are often only published once a week/month [k]
• Not everyone reads/buys specialist magazines [k]
Other possible methods include:

• Social media/Facebook/Twitter [k] as large potential market / cover wide
area / seen by many people [an]
• Newspapers [k] not everyone reads them [an] so can restrict target market/
lead to fewer sales [an]
• Leaflets [k] but people may throw them away/seen as litter [an]

A disadvantage of specialist magazines is that it is likely to be seen by a small
number of people [k] which can reduce its potential sales [an]. I think social
media [k] is a better option as customers can still be targeted but also it allows
the business to cover many people [an]. This would allow them to build a bigger
customer base [eval] to maximise potential revenue [eval].

PUBLISHED
3(a) Identify two reasons why effective internal communication is important for 2 Only award the first two responses
a business. given.
Award 1 mark per reason (max 2).
Points might include:

• Fewer mistakes / less waste (of resources)
• Improve efficiency / better productivity / increase output
• Improve co-ordination (between departments)
• Enable faster/better decision-making
• Better collaboration better between workers/manager
• Improve motivation / job satisfaction
3(b) Define ‘organisational structure’. 2
Refers to the levels of management and division of responsibility within an

organisation [2]
OR
The formal, internal framework of a business that shows how it is managed and
organised [2]
Partial definition e.g. shows who reports to who [1]

PUBLISHED
3(c) State four factors a business should consider when deciding which 4 Only award the first four responses
employees to make redundant. given.
Award 1 mark per factor (max 4).

• Importance of role being performed / whether job still needed
• Performance / experience / skills / flexibility / qualities / qualifications
• Length of time worked for business / redundancy costs
• Attitude / behaviour / attendance / disciplinary record
• Wages/salary paid
• Which departments need to lose/retain workers
• Whether anyone offers/volunteers to leave job
3(d) Explain two advantages to DBG of its managers using a democratic 6 To use words from the stem as
leadership style. application the reference must be
Award 1 mark for identification of each relevant advantage (max 2). to the point being made.
Points might include: • Construction / hospitals, roads, or
• Employees could be motivated [k] leading to increase in output/productivity schools
[an] when constructing [app] • 2000 (employees)
• Helps keep employee loyalty / lower labour turnover [k] leading to lower • Organisational structure
recruitment costs [an] for a business of 2000 employees [app] • Redundant
• Workers may have more experience/understanding of problems [k] leading
to better decisions [an] Other appropriate examples in context
• More ideas / better communication [k] can still be credited.

PUBLISHED
3(e) Do you think all businesses benefit from an increase in government 6 This is a general question so there are
spending? Justify your answer. no marks for application.
Award up to 2 marks for identification of relevant points. For evaluation to be awarded

Award up to 2 marks for a justified decision as to whether all businesses benefit relevant analysis of points.
from an increase in government spending.
Some points can be [k] or [an] but only
Points might include: award once.
• Increase in demand/sales [k] leading to higher revenue [an]
• Can create jobs [k] so able to maintain/increase output [an] but may be
difficult for some businesses to recruit skilled workers [an]
• May have to pay higher taxes (to pay for spending) [k] which increases
costs [an] which could delay investment [an]
• Obtain grants/subsidies [k] generating additional funds for the business to
spend [an]
• Can encourage business start-ups [k] increasing competition [an]

An increase in government spending could increase sales [k]. However, it could
increase taxes [k] which increases costs leading to higher prices [an]. Overall, I
think all businesses can benefit. For example, if the government decides to build
new roads, construction businesses are likely to benefit the most as can receive
an increase revenue from the extra sales, but other businesses still benefit from
better transport links which can helps all businesses send or receive goods on
time. [eval] [eval].

PUBLISHED
4(a) Define ‘globalisation’. 2
Increase in worldwide trade and movement of people and capital between

countries [2]
OR
Increasing trend for businesses to trade across international boundaries and for
people to live/travel to countries that are not their own [2]
OR
The process by which countries are connected with each other because of the
trade of goods and services [2]
Partial definition e.g. (increase in) trade of goods and service [1]
4(b) Identify two examples of fixed costs. 2 Only award the first two responses
given.
Award 1 mark per example (max 2).

• Rent/rates
• Electricity / gas / heating and lighting / water
• Insurance
• Loan repayments/interest payments
• Storage costs
• Marketing costs
• Salaries

PUBLISHED
4(c) Outline, with reference to TYA, the difference between a limited company 2 To use words from the stem as
and an unincorporated business. application the reference must be
Award 1 mark for a relevant point (max 1). to the point being made.
Award 1 mark for outlining the difference between the two types of business
organisation (max 1). The following words are likely to be
Award 1 mark for each relevant reference to this business (max 2). appropriate for this question:
• Factory
Points might include: • 600 (employees)
• A limited company has separate legal identity [k] so assets such as the • 300 000
factory [app] and the 600 cars [app] are owned by the business rather than • Cars
the individual, whereas the owners and the business are the same for an • High fixed costs
unincorporated business [k] • Improve efficiency
• An unincorporated business has unlimited liability [k] whereas the risk for • Relocate
shareholders/owners of a limited company is limited to the amount invested • Globalisation
[k] in the car business [app] so they may be less concerned about the high
fixed costs [app] Other appropriate examples in context
• A limited company can sell shares [k] whereas for an unincorporated can still be credited.
business it can be difficult to raise a large amount of finance [k]
• A limited company has continuity [k]

PUBLISHED
4(d) Explain two methods TYA could use to increase efficiency. 6 To use words from the stem as
Award 1 mark for identification of each relevant method (max 2). appropriate (i.e. make sense) in relation
Award 1 mark for each relevant reference to this business (max 2). to the point being made.
Award 1 mark for each relevant explanation (max 2).
The following words are likely to be
Points might include: appropriate for this question:
• Increase in capital intensity / automation / introduce new technology [k] • Factory
increasing output / faster production [an] of cars [app] • 600 (employees)
• Training [k] its 600 employees [app] so they can work faster / make fewer • 300 000 (units)
mistakes / better quality [an] • Cars
• Introduce just-in-time inventory control [k] to reduce amount of space • High fixed costs
needed [an] in the factory [app]
• Kaizen [k] helps reduce waste (of resources) [an] may help lower high fixed Other appropriate examples in context
costs [app] can still be credited.
• Improve layout of machines [k] so saves time moving between areas [an]
• Improve motivation or examples e.g. bonuses [k]
• Cell production [k]
• Improve quality / quality assurance [k]

PUBLISHED
4(e) Do you think legal controls are the most important factor for a 6 This is a general question so there are
manufacturing business to consider when deciding which country to no marks for application.
locate its operations in? Justify your answer.
For evaluation to be awarded
Award up to 2 marks for identification of relevant points. justification will usually follow on from
Award up to 2 marks for relevant development of points. relevant analysis of points.
Award up to 2 marks for a justified decision as to whether legal controls are the
most important factor for a manufacturing business to consider when deciding Some points could be awarded for
which country to locate its operations in. different options, and some could be
presented as either [k] or [an] but do
Points might include: not award the same point twice.
Legal controls:
• May restrict/not able to locate in certain places [k] so no output [an]
• Business may have to change its production methods [k] which would
increase costs [an]
• May restrict amount of goods they can export/import [k] reducing potential
sales [an]
Other location factors discussed could include:

• Access to suppliers / cheaper sources of materials [k] would increase
transport costs [an] decreasing profit margin [an]
• Access to/cost of labour [k] which could lower variable costs [an]
• Access to/cost of land [k] as may need a large space [an] increasing fixed
costs [an]
• Access to transport networks / access to power [k] as poor transport links
could delay deliveries / so production may be delayed/stopped [an]
• Availability of government grants/subsidies [k]

PUBLISHED
4(e) Justification might include:

Legal controls could mean the business may not be able to locate in certain
places [k] which means no output [an]. Another factor is access to labour [k]
helping lower variable costs [an]. However, legal controls are likely to be most
important as the law will stop the factory being built whereas there are ways to
overcome problems caused by access to employees [eval] which may increase
costs but will still ensure that production can take place. [eval]

Cambridge IGCSE ™: Business Studies 0450/12 October/November 2022

Uploaded by

Copyright:

Available Formats

Cambridge IGCSE ™: Business Studies 0450/12 October/November 2022

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Cambridge IGCSE ™: Business Studies 0450/12 October/November 2022

Uploaded by

Copyright:

Available Formats

Cambridge IGCSE™

BUSINESS STUDIES 0450/12

This document consists of 21 printed pages.

© UCLES 2022 [Turn over

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

GENERIC MARKING PRINCIPLE 2:

GENERIC MARKING PRINCIPLE 3:

Marks must be awarded positively:

GENERIC MARKING PRINCIPLE 4:

© UCLES 2022 Page 2 of 21

GENERIC MARKING PRINCIPLE 6:

© UCLES 2022 Page 3 of 21

1 Components using point-based marking:

From this it follows that we:

2 Presentation of mark scheme:

© UCLES 2022 Page 4 of 21

© UCLES 2022 Page 5 of 21

Annotation Description Use

Tick Tick Indicates a point which is relevant and rewardable.

X Cross Indicates a point which is inaccurate/irrelevant and not rewardable.

REP Repetition Indicates where content has been repeated.

APP Application Indicates appropriate reference to the information in the stem.

AN Analysis Indicates where the answer has demonstrated analysis.

© UCLES 2022 Page 6 of 21

1(a) Define ‘market share’. 2

Percentage of total market sales held by one brand/business [2]

Partial definition e.g. share of all sales made [1]

OR Percentage of customers/sales a business has [1]

1(b) Define ‘statement of financial position’. 2

OR What a business owns and owes [1]

© UCLES 2022 Page 7 of 21

© UCLES 2022 Page 8 of 21

Other appropriate responses should also be credited.

© UCLES 2022 Page 9 of 21

Award up to 2 marks for identification of relevant points. For evaluation to be awarded

Other appropriate responses should also be credited.

Justification might include:

© UCLES 2022 Page 10 of 21

2(a) Define ‘revenue’. 2

Partial definition e.g. income of the business [1]

If correct answer given with no working shown award 2 marks.

© UCLES 2022 Page 11 of 21

Points might include: The following words are likely to be

Other appropriate examples in context

© UCLES 2022 Page 12 of 21

Award up to 2 marks for identification of relevant points . For evaluation to be awarded

Other possible methods include:

Other appropriate responses should also be credited.

Justification might include:

© UCLES 2022 Page 13 of 21

Award 1 mark per reason (max 2).

Points might include:

Other appropriate responses should also be credited.

3(b) Define ‘organisational structure’. 2

Refers to the levels of management and division of responsibility within an

Partial definition e.g. shows who reports to who [1]

© UCLES 2022 Page 14 of 21

Award 1 mark per factor (max 4).