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Cambridge IGCSE™
BUSINESS STUDIES 0450/13

Paper 1 Short Answer/Data Response October/November 2023
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 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level
components.
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This document consists of 23 printed pages.
© UCLES 2023 [Turn over

0450/13 Cambridge IGCSE – Mark Scheme October/November 2023
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.
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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
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be limited according to the quality of the candidate responses seen).
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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.
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.
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• Content in the answer column in brackets is for examiner information/context to clarify the marking but is not required to earn the mark
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(except Accounting syllabuses where they indicate negative numbers).
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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.
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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 question Used when the answer or parts of the answer are not answering the question asked.
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 credit given Indicates that content has been recognised but not rewarded.
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Question Answer Marks Notes
1(a) Identify two benefits to a business of specialisation. 2 Only award the first two
responses given.
Award 1 mark per benefit (max 2).
Points might include:

• Increases output
• Quicker production / increases productivity / higher efficiency
• Lower unit cost / economies of scale
• Workers become expert/more skilled / employees focus on what they are good at
• Improves accuracy / better quality / fewer mistakes / reduces waste
• Helps improve competitiveness
Other appropriate responses should be credited.
1(b) Identify two ways a business can grow. 2 Only award the first two
responses given.
Award 1 mark per way (max 2).

• Takeover
• Merger
• Develop new products
• Enter new markets
• Increasing sales (of existing products) / open more locations
• Franchising
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1(c) Outline one possible advantage and one possible disadvantage of DBR being a 4 To use words from the stem as
public limited company. application, the reference must be
appropriate (i.e. make sense) in
Award 1 mark for each relevant advantage / disadvantage (max 2). 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 appropriate for this question:
Points might include: • Mining business / mine
• Diamonds
Advantages: • 8 (mines)
• Can raise large amounts of finance [k] so can continue to grow [app] • Grown quickly / continue to
• Can sell shares to general public / no restrictions on buying, transferring / selling grow
shares [k] of this mining business [app] • $600 million (profit)
• May be able to borrow at low rates of interest [k] • Large (business)
• High status / seen as more creditworthy to suppliers [k]
• Limited liability (for shareholders) [k] Other appropriate examples can
• Incorporated business / separate legal identity [k] be credited.
• Continuity [k]
Disadvantages:
• Many regulations / has to publish its accounts [k] so everyone knows its profit was
$600 million [app]
• High cost / lengthy process to sell shares [k]
• Risk of takeover / original owners may lose control (if too many shares are issued)
[k]
Other appropriate responses should also be credited.
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1(d) Explain two diseconomies of scale DBR might experience. 6 To use words from the stem as
application, the reference must be
Award 1 mark for identification of each relevant diseconomy of scale (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
Award 1 mark for each relevant explanation (max 2). be appropriate for this question:
• Mining business / mine
Points might include: • Diamonds
• Low motivation / lack of commitment [k] for its 3000 employees [app] leading to • 8 (mines)
higher labour turnover / more workers leaving [an] • 3000 (employees)
• Poor communication [k] between the mines [app] leading to mistakes being made/ • Grown quickly / continue to
inefficiency [an] grow
• Weak / lack of co-ordination [k] leading to the wrong decisions [an] reducing the • $600 million
profit of $600 million [app] • Specialisation
• Lack of control [k] leading to higher average costs [an] • Public limited company
• Large (business)
Other appropriate examples can
be credited.
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1(e) Explain two ways the size of a primary sector business can be measured. Which 6 This is a general question so
do you think is the best way? Justify your answer. there are no marks for application.
Award up to 2 marks for identification of relevant issues. For evaluation to be awarded

Award up to 2 marks for relevant development of points. justification will usually follow on
Award 2 marks for justified decision as to which is the best way to measure the size of from relevant analysis of points.
a primary sector business.
Some points could be awarded for
Points might include: different options, but do not award
Number of employees [k] the same point twice.
• Simple / easy to calculate [an]
• May use a lot of machinery / capital intensive [an]
• May have many part-time employees [an] so business may look larger than it is /
difficult to compare [an]
Value of sales [k]

• Easy / quick to access data [an]
• Some business may sell seasonal products [an]
• If sell high value items, may not reflect size of business [an]
Value of output [k]

• Can be easy to compare across similar businesses [an]
• If sell high value items, may not reflect size of business [an]
Value of capital employed [k]

• May have a lot of expensive machinery / capital which makes business look bigger
than it is [an]
Justification might include:
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One way is value of output [k] as easy to compare across similar businesses [an].
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Another is number of employees [k] which is simple to calculate [an]. Value of output is
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likely to be a better way because many primary sector businesses may use a lot of
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machinery which means it has fewer employees [eval] so any comparison of
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employees is likely to be misleading [eval].
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2(a) Define ‘current liabilities’. 2
Award 2 marks for a full definition. Award 1 mark for a partial definition.
Short-term debts owed by a business, repaid in less than one year [2]
OR
Debts of a business which it expects to pay before the date of the next statement of
financial position [2]
Partial definition e.g. money owed by a business [1]
2(b) Calculate NPZ’s return on capital employed (ROCE). Show your working. 2 Award max 1 mark if 20% is
written as part of the answer but is
Award 2 marks for the correct answer. Award 1 mark for correct method but incorrect not given as the final answer.
answer.
Answer must be shown as a
Correct answer: 20% [2] percentage % to gain both marks.
Correct method but incorrect answer e.g. profit / capital employed  100 [1] OR 60 000
/ 300 000  100 [1]
If correct answer given with no working shown, award 2 marks.
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2(c) Outline two possible benefits to NPZ of having well-motivated employees. 4 To use words from the stem as
Award 1 mark for each relevant benefit (max 2). appropriate (i.e. make sense) in
Points might include: be appropriate for this question:
• Increased productivity/efficiency [k] of the 35 employees [app] • Restaurant or related words
• Increase output [k] of pizzas [app] • Pizza or related words such
• Reduced absenteeism [k] among the part-time employees [app] as food
• Lower labour turnover [k] so business can focus on ways to increase profit [app] • 35 employees
• Willing to accept changes / new methods of working [k] in the restaurant [app] • Part-time
• Improves quality [k] • Ways to increase profit
• $600 000 (revenue)
Other appropriate responses should be credited. • $240 000 (gross profit)
• $60 000 (profit)
• $300 000 (capital employed)
• 20% (ROCE)

be credited.
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2(d) Explain two methods NPZ could use to improve employee motivation. 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
Award 1 mark for each relevant explanation (max 2). be appropriate for this question:
• Restaurant or related words
Points might include: • Pizza or related words such
• Increased wages / salary / rate of pay [k] as the revenue is $600 000 [app] so as food
workers are better able to meet their basic needs [an] • 35 employees
• Praise [k] to meet esteem needs [an] of the 35 employees [app] • Part-time
• Offer training [k] so employees feel more valued / important [an] to the restaurant • Ways to increase profit
[app] • $600 000 (revenue)
• Employee of the month / recognition [k] so workers feel their hard work is • $240 000 (gross profit)
acknowledged [an] • $60 000 (profit)
• Job enrichment [k] as gives employees tasks which require more skills / • $300 000 (capital employed)
responsibilities [an] • 20% (ROCE)
• Introduce job rotation [k] so employees are not bored doing the same thing / work
is more varied [an] Other appropriate examples can
• Bonus [k] so workers have an incentive to work harder to get bonus [an] be credited.
• Profit-sharing [k] so employees have an interest in the success of the business
[an]
• Offer fringe benefits (or examples – discounts on products) [k]
• Team working [k] would provide support / sense of belonging [an]
• Opportunity for promotion [k] which could lead to higher pay [an]
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2(e) Do you think reducing variable costs is the best way for a business to improve 6 This is a general question so
profit? Justify your answer. there are no marks for application.

Award up to 2 marks for relevant development of points. justification will usually follow on
Award 2 marks for justified decision as to whether reducing variable costs is the best from relevant analysis of points.
way for a business to improve profit.
Points might include: different options, but do not award
• No need to increase prices [k] as this could result in fewer sales [an] the same point twice.
• Would reduce break-even output [k]
• Increase (gross) profit margin [k]
• Cheaper materials may lower quality [k] damaging reputation [an]
Other ways might include:

Increasing prices [k]
• May increase revenue [an]
• May improve brand image [an]
• Lead to lower customers / could make them less competitive [an]
Increase number of sales / quantities sold [k]

• May increase costs of advertising [an]
• Competitors may respond with own promotion [an]
Lowering fixed costs (or examples such as lower rent) [k]

• Reduces break-even output [an]
• Unlikely to be able to change fixed costs quickly [an]
• Other appropriate responses should also be credited.
Justification might include:

It could buy cheaper materials to lower variable costs [k] but this could mean poorer
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quality goods [an]. It could increase the quantity sold [k] but this might increase its
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promotion costs [an]. Increasing the quantity sold is a better method because the
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reputation of the business is protected so existing customers should remain loyal [eval]
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and the additional revenue should hopefully cover the extra cost [eval].
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3(a) Define ‘brand image’. 2
Identity / logo / unique name of a product that distinguishes it from other brands [2]
OR
The general impression / perception / reputation of a product held by consumers [2]
Partial definition e.g. identity given to a product [1] OR something that distinguishes a
product from its competitors [1] OR how the product is seen / perceived by others /
public [1]
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3(b) Identify one benefit and one limitation for a business of developing new 2 Only award the first response
products. given for benefit/limitation.
Award 1 mark per benefit/limitation (max 1 for each).
Benefits:
• Increase sales / revenue / customers
• Spread risk / diversification
• Enter new markets
• Help expand into existing markets / increase market share
• Improve competitive advantage / Unique selling point (USP)
• Improve brand image / better reputation
• Maintain customer loyalty
Limitations:
• Cost of market research
• Cost of research and development (R&D)
• Cost of producing / testing trial products
• Cost of new machinery
• May need to recruit / cost of additional employees / specialists
• Cost of launching / promoting / advertising new product in market
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3(c) Outline two possible reasons why BKS might respond to environmental 4 To use words from the stem as
pressures. application, the reference must be
Award 1 mark for each relevant reason (max 2). relation to the point being made.
Points might include: • Brand image
• Avoid pressure group action / boycotts [k] which may damage brand image [app] • Food
• Protect reputation / brand image [k] of its food [app] • Developing new products
• Respond to changing customer demands [k] by developing new products [app] • (Sell to) retailers
• Attract / maintain sales [k] to (large) retailers [app] • Product life cycle
• Differentiate from competitors [k]
Other appropriate responses should also be credited. be credited.
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3(d) Explain how BKS’s marketing decisions about promotion might be affected if a 6 To use words from the stem as
product is in the following stages of the product life cycle. application, the reference must be
Award 1 mark for identification of each relevant effect (max 2). relation to the point being made.
Award 1 mark for each relevant explanation (max 2). • Brand image
• Food
Points might include: • (Developing) new products
• (Sell to large) retailers
Introduction stage: • Environmental pressures
• High level of promotion (spending) [k] to attract / inform customers [an] about the
new foods [app] Other appropriate examples can
• (Advertise) to persuade / attract / inform customers [k] about its new products be credited.
[app] to gain sales [an]
Do not award:
Maturity stage: Examples of advertising /
• Low / less promotion (spending) [k] as product is well-known / want to spend promotion
budget on other things [an] such as responding to environmental pressures [app]
• May be used to remind customers [k] so keep buying its products / remain loyal /
have constant sales [an]
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3(e) Do you think selling direct to retailers is the best channel of distribution for a 6 This is a general question so
manufacturer to use? Justify your answer. there are no marks for application.

justification will usually follow on
Award up to 2 marks for relevant development of points. from relevant analysis of points.
Award 2 marks for justified decision as to whether selling direct to retailers is the best Some points could be awarded for
channel of distribution for a manufacturer to use. different options, but do not award
the same point twice.
• Can sell in large quantities / wide distribution / access to more customers [k] Do not award:
leading to higher potential revenue [an] Benefits to customers
• Retailers can help promote / advertise products [k] which raises awareness /
increase sales [an]
• Can hold less inventory [k] lowering storage costs [an]
• No direct contact with customers [k] so may lack up-to-date information about
current trends / difficult to build customer relationships [an]
• Retailers takes some of the profit [k] lowers profit margin [an]
Wholesalers [k]
• Bulk buy / buy in large amounts [an]
• Save storage space [an] lowering storage costs [an]
• Price may be higher [k] as wholesaler adds mark-up [an] / fewer sales [an]
Sell direct to customers [k]

• Can sell at lower price [an] leading to more sales [an]
• Higher profit / no need to pay middleman [an]
• May have to employ extra employees to manage high number of orders [k] which
increases costs [an]
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Agent [k]
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• Has local market knowledge [an]
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3(e) Justification might include:

Retailers offer a wide distribution [k] which can help increase potential sales [an].
Selling direct to customers [k] would mean the business could keep all the profit [an]. I
think selling to retailers is better as the high sales will increase the total revenue [eval]
which will offset the lower profit margin. [eval]
4(a) Define ‘import quota’. 2 Do not award answers which

confuse the term with a tariff.
Physical limit on the number / amount of goods that can be imported / allowed into a
country [2]
OR
Restriction on the quantity of a product than can be imported [2]
Partial definition e.g. limit on number of goods [1] OR limit on imports [1]
4(b) Identify two advantages to a country of having lower levels of unemployment. 2 Only award the first two
responses given.
Award 1 mark per advantage (max 2).

• Increase in incomes / high(er) standard of living
• Low(er) payments for benefits / less government spending
• Increased tax receipts
• Economic growth / higher GDP / increased demand / sales
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4(c) Identify four possible drawbacks for a country of having a multinational 4 Only award the first four
company located there. responses given.
Award 1 mark per drawback (max 4).

• (Increased) competition
• May offer low wages / poor working conditions / may only create unskilled jobs /
exploitation of labour
• Use up scarce resources
• Environmental issues / damage / pollution
• Repatriation / send profits back to home country
• Often try to avoid / reduce amount of tax paid
• Power to influence government decisions / local economy
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4(d) Explain two factors FXN should consider when deciding on a suitable location 6 To use words from the stem as
for the new factory. application, the reference must be
Award 1 mark for identification of each relevant factor (max 2). relation to the point being made.
Award 1 mark for each relevant explanation (max 2). • Multinational company
• 1200 jobs
Points might include: • (Mobile) phones
• Rent [k] increasing fixed costs [an] when making phones [app] • Lower level of unemployment
• Available / amount of space [k] as likely to need a large area [an] • Recruitment process
• Availability / access to employees [k] as 1200 jobs [app] to make sure quality / • Import quotas
efficiency is maintained [an]
• Availability of / distance to raw materials / suppliers [k] to avoid import quotas Other appropriate examples can
[app] which could increase transport costs [an] still be credited.
• Access to water / power / utilities [k] so production does not stop [an]
• Government influence / legal controls / access to grants [k] which would reduce Some points can be [k] or [an] but
costs [an] for this multinational company [app] only award once.
• Environmental impact [k] which could damage brand image [an]
• Transport / communication links [k] Do not award factory as
application as stated in question.
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4(e) Do you think a recruitment website, which advertises jobs, is the best method 6 This is a general question so
for a business to use when recruiting a large number of employees? there are no marks for application.
Justify your answer.
For evaluation to be awarded
Award up to 2 marks for identification of relevant issues. justification will usually follow on
from relevant analysis of points.
Award up to 2 marks for relevant development of points.
Award 2 marks for a justified decision as to whether a recruitment website, which different options, but do not award
advertises jobs, is the best method for a business to use when recruiting a large the same point twice.
number of employees.
Recruitment website:
• As many / most people use the internet to look for jobs [k] so able to attract a
wider pool of candidates [an]
• Some people do not have access to the internet [k]
• Advert could easily be missed (as many different websites) [k]
Other methods might include:
Newspapers [k]
• Seen by many people / wide exposure [an]
• Most people do not read newspapers [an] so possible candidates might not see
the advert [an]
• Only shown for a limited amount of time [an]
• Must pay to advertise [an] which increases expenses [an]
Recruitment agency [k]

• Have expert knowledge / only send suitable people / do work for business [an]
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saving time on interviewing [an]
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• Charge a high fee [an] which increases expenses [an]
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4(e) Justification might include:

A recruitment website is good as many people will look online for jobs [k] helping to
attract a wider pool of candidates [an]. A recruitment agency [k] is good as it has
expert knowledge [an]. A recruitment agency is better when recruiting a large number
of employees because it can use its knowledge to only send suitable candidates [eval]
so the business does not waste time interviewing a large number of unsuitable people
[eval].
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Cambridge IGCSE™

BUSINESS STUDIES 0450/13

This document consists of 23 printed pages.

© UCLES 2023 [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:

Social Science-Specific Marking Principles

1 Components using point-based marking:

From this it follows that we:

2 Presentation of mark scheme:

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.

Points might include:

Other appropriate responses should be credited.

Points might include:

Other appropriate responses should be credited.

Other appropriate responses should also be credited.

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

Value of sales [k]

Value of output [k]

Value of capital employed [k]

Other appropriate responses should be credited.

Justification might include:

2(a) Define ‘current liabilities’. 2

Partial definition e.g. money owed by a business [1]

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

Other appropriate examples can

Other appropriate responses should be credited.

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

Other ways might include:

Increase number of sales / quantities sold [k]

Lowering fixed costs (or examples such as lower rent) [k]

Justification might include:

3(a) Define ‘brand image’. 2

Other appropriate responses should be credited.

Award 1 mark per benefit/limitation (max 1 for each).

Points might include:

Other appropriate responses should be credited.

Other appropriate responses should be credited.

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

Sell direct to customers [k]

3(e) Justification might include:

Question Answer Marks Notes

4(a) Define ‘import quota’. 2 Do not award answers which

Points might include:

Other appropriate responses should be credited.

Award 1 mark per drawback (max 4).

Points might include:

Other appropriate responses should be credited.

Points might include:

Other methods might include: