Igcse Business Past Papers

™
Cambridge IGCSE
BUSINESS STUDIES 0450/12

*0444971363*
Paper 1 Short Answer and Data Response February/March 2023

1 hour 30 minutes
You must answer on the question paper.
No additional materials are needed.
INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.
INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].
This document has 12 pages. Any blank pages are indicated.
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1 HCB manufactures cars in country X. It has 200 employees working in its factory. The business
has changed its method of production due to new technology. HCB’s Managing Director is
considering ways to become more ethical. She is aware that other businesses in country X have
started to import cars. The interest rate in country X has increased due to rising inflation.
(a) Define ‘inflation’.
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(b) Identify two ways technology could change production methods.
Way 1: ...............................................................................................................................
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Way 2: ...............................................................................................................................
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(c) Outline two ways HCB could become more ethical.
Way 1: ...............................................................................................................................
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(d) Explain two ways HCB could be affected by an increase in the interest rate in country X.
Way 1: ...............................................................................................................................
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Explanation: ......................................................................................................................
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Way 2: ...............................................................................................................................
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(e) Do you think manufacturing businesses will always benefit from the introduction of import
tariffs? Justify your answer.
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2 WFH produces hats and sells them to a mass market. It holds a high level of inventory. The Managing
Director is concerned about the liquidity of the business and has been analysing WFH’s financial
statements. An extract is shown in Table 2.1. The Managing Director thinks that the business might
fail. Other stakeholder groups might also be interested in WFH’s financial statements.
Table 2.1
Extract from WFH’s financial statements ($000)
2021 2022
Current assets 60 50
Inventory 20 30
Trade receivables 25 10
Cash 15 10
Current liabilities 20 40
Profit/loss 15 (10)
(a) Identify two possible causes of business failure.
Cause 1: ...........................................................................................................................
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Cause 2: ...........................................................................................................................
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(b) Calculate WFH’s acid test ratio for 2022. Show your working.
Working: ...........................................................................................................................
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Final answer: .................................................................................................................... [2]
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(c) Identify four reasons why businesses hold inventory.
Reason 1: .........................................................................................................................
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Reason 2: .........................................................................................................................
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Reason 3: .........................................................................................................................
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Reason 4: .........................................................................................................................
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(d) Explain why the following two stakeholder groups might be interested in WFH’s financial
statements.
Employees: .......................................................................................................................
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Explanation: ......................................................................................................................
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Suppliers: ..........................................................................................................................
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Explanation: ......................................................................................................................
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(e) Do you think it is always better for a business to sell to a mass market? Justify your answer.
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3 AH is an insurance business. It operates in a competitive market. AH has 1000 employees including

50 supervisors. The supervisors use an autocratic leadership style. AH currently has a 5% market
share and is planning to take over a competitor. The Managing Director is considering how to
communicate with AH’s employees about the takeover. There are many sources of finance available
to fund business growth.
(a) Identify two responsibilities of supervisors.
Responsibility 1: ...............................................................................................................
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Responsibility 2: ...............................................................................................................
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(b) Identify two methods of written communication.
Method 1: ..........................................................................................................................
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Method 2: ..........................................................................................................................
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(c) Outline two benefits to AH of taking over a competitor.
Benefit 1: ..........................................................................................................................
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Benefit 2: ..........................................................................................................................
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(d) Explain one advantage and one disadvantage to AH of its supervisors using an autocratic
leadership style.
Advantage: .......................................................................................................................
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Explanation: ......................................................................................................................
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Disadvantage: ...................................................................................................................
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Explanation: ......................................................................................................................
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(e) Explain two sources of finance which could be used to fund business growth. Which source
of finance would be the best to use? Justify your answer.
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4 Viktor is starting up a business as a photographer. He will be a sole trader. Quality control will be
important. Viktor plans to use sampling when carrying out market research. There are legal controls
which could affect his marketing strategy. Viktor will employ 5 photographers. He knows there are
many ways to motivate employees.
(a) Identify two ways legal controls could affect marketing strategy.
Way 1: ...............................................................................................................................
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Way 2: ...............................................................................................................................
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(b) Define ‘quality control’.
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(c) Outline two reasons why Viktor might use sampling when carrying out market research.
Reason 1: .........................................................................................................................
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Reason 2: .........................................................................................................................
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(d) Explain two disadvantages to Viktor of operating as a sole trader.
Disadvantage 1: ................................................................................................................
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Explanation: ......................................................................................................................
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Disadvantage 2: ................................................................................................................
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Explanation: ......................................................................................................................
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(e) Explain two ways a service business could motivate its employees. Which would be the best
way to use? Justify your answer.
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publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
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Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.
© UCLES 2023 03_0450_12_2023_1.13

™
Cambridge IGCSE

Paper 2 Case Study February/March 2023
INSERT 1 hour 30 minutes
INFORMATION
• This insert contains the case study.
*8359598807-I*
• You may annotate this insert and use the blank spaces for planning. Do not write your answers on the
insert.
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2
Romesh Woodpaints (RW)
RW was set up 15 years ago in country X. It is a public limited company. RW produces paint which is
used for all types of wood products, including wooden furniture.
All RW’s customers are located in Main City where consumer incomes have been increasing in recent
years. RW’s paint is sold through specialist shops for customers to improve their own houses. It also
sells direct to businesses that make wooden furniture.
RW has one factory in Main City. It uses flow production to produce the paint. There are 100 skilled
employees working in the production area of the factory who help to maintain the machinery used in the
production line. These employees are protected by legal controls that RW must follow. RW imports 75%
of the raw materials it uses. Waste from the production of paint is put into local rivers and pollutes the
water.
RW is producing 1 million tins of paint a year, which is the maximum output possible at its existing factory.
It is planning to expand by building an additional factory so it can increase production to 2 million tins
of paint a year. The new factory will cost $50 million and will be financed by a bank loan. The Managing
Director knows there may be problems when growing the business as there will be two factories instead
of one. He also knows there are external costs and benefits from producing paint.
The new factory will need 100 production employees. RW may move some of its employees from the
existing factory to help train the newly recruited employees, to ensure they have the skills they need.
RW has to decide which of the three suitable locations, shown in Appendix 2, to choose for the new
factory.
Appendix 1
Newspaper article from Main City News, January 2023
Businesses that make wooden furniture operate in a competitive market and need to keep prices similar
to those of other businesses.
There have been changes in consumer tastes and fashions. More people are buying wooden outdoor
furniture as they are now spending more time in their gardens. Customers are choosing to buy their
outdoor furniture in bright colours, such as yellow, rather than darker colours, such as brown.
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Appendix 2
The three possible locations for RW’s new factory
Location A
High cost land
Skilled labour
Existing factory located here
City
Village Port
Location C
Location B
Government grants available
High unemployment
Low cost land
No skilled workers
Frequent power cuts
Paint tins produced here
Appendix 3
RW’s financial information for one year before and one year after the new factory has been built
Existing factory (actual) Both factories (forecast)

$m $m
Revenue 10 20
Cost of sales 3 6
Expenses including interest paid 6 12
Profit 1 2
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Cambridge IGCSE

*8359598807*

1 hour 30 minutes
You will need: Insert (enclosed)
INSTRUCTIONS
INFORMATION
• The insert contains the case study.
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2
1 (a) Explain one advantage and one disadvantage to RW of using flow production.
Advantage: .......................................................................................................................
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Explanation: ......................................................................................................................
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Disadvantage: ...................................................................................................................
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Explanation: ......................................................................................................................
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(b) Consider how the following three changes may affect RW. Which change is likely to have the
most effect on RW’s revenue? Justify your answer.
• Changes in consumer tastes and fashions

• Increase in consumer incomes
• Decrease in the price of competitors’ products
Changes in consumer tastes and fashions: .....................................................................
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Increase in consumer incomes: ........................................................................................
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Decrease in the price of competitors’ products: ...............................................................
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Conclusion: .......................................................................................................................
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2 (a) Explain two possible problems for RW of the business growing.
Problem 1: ........................................................................................................................
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Explanation: ......................................................................................................................
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Problem 2: ........................................................................................................................
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(b) Using Appendix 2 and other information, consider the three possible locations for RW’s new
factory. Which location should RW choose? Justify your answer.
Location A: ........................................................................................................................
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Location B: ........................................................................................................................
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Location C: .......................................................................................................................
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Recommendation: ............................................................................................................
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3 (a) Explain four legal controls that may benefit employees.
Legal control 1: .................................................................................................................
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Legal control 3: .................................................................................................................
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(b) Consider the advantages and disadvantages of two methods of training, other than induction
training, which RW could use for the employees in the new factory. Which of these two methods
should RW choose? Justify your answer.
Method 1: ..........................................................................................................................
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Method 2: ..........................................................................................................................
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Recommendation: ............................................................................................................
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4 (a) Explain two external benefits and two external costs from RW’s factories.
External benefit 1: .............................................................................................................
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External benefit 2: .............................................................................................................
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External cost 1: .................................................................................................................
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(b) Using Appendix 3 and other information, consider whether the following forecasts are likely to
be accurate after the new factory has been built. Do you think RW will achieve its forecast
profit? Justify your answer.
Revenue forecast $20 million: ..........................................................................................
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Cost of sales forecast $6 million: ......................................................................................
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Expenses forecast, including interest paid, $12 million: ...................................................
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Conclusion: .......................................................................................................................
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Cambridge International General Certificate of Secondary Education
0450 Business Studies March 2023
Principal Examiner Report for Teachers
BUSINESS STUDIES
Paper 0450/12
Short Answer/Data Response
Key messages
• Definitions need to be clear and precise.

• Candidates should be encouraged to use information from the stem to help answer part (c) and part (d)
questions as this provides the basis for application. Different points of application are needed to access
both application marks within the same question.
• Candidates should not use the same analysis for both points within the same question.
• Evaluation requires candidates to make a supported judgement which should follow on from points
raised in the answer, and clearly answer the question set. A decision alone or summary of points made
is not evaluation. An example of an answer which includes evaluation can be found in the mark scheme
for each part (e) question.
General comments
This paper produced a wide range of marks. Overall, candidates showed good knowledge of concepts, but
many found accessing the application, analysis and evaluation marks more challenging.
Parts (a) and (b) of each question were generally well attempted. However, many candidates lacked the
necessary precision in their definitions or range of knowledge to access all the marks available.
It is important for candidates to be reminded that questions can be set on any area of the syllabus. It was
clear that some candidates were not familiar with topics such as sampling and legal controls over marketing.
For most part (c) questions (excluding 2c which only assessed knowledge) and all part (d) questions,
candidates need to use information from the stem to link their answers to the scenario to achieve application
marks. Candidates should not use the same application for both points within a question.
Candidates must understand which skills are being assessed in each question. Some included analysis in
part (c) questions and application in part (e) questions. However, part (c) questions only assess knowledge
or knowledge and application whilst part (e) questions assess knowledge, analysis and evaluation. No other
skills can be awarded in these questions.
Candidates need to develop their evaluative skills. Of those candidates who did attempt an evaluative
comment, many were unable to provide reasoned statements to back up the decision made. One approach
is to make a choice, provide a reason for this decision and then explain why it is better than the alternative
discussed.
Comments on specific questions
Question 1
(a) Most candidates understood inflation referred to an increase in the price of goods or services. Only
the strongest responses were able to provide a full definition. Many candidates overlooked the time
element. Another common mistake was to explain reasons for inflation. Other responses lacked
precision as they referred to cost instead of price. Some candidates made the mistake of referring
to a single product rather than general prices.
(b) This question was well answered by most candidates.
© 2023
(c) Most candidates could outline at least one way with fair pay to employees or not using child labour
typical answers. Better responses used the information provided to access the application marks.
For example, recognising the business had 200 employees or that the factory produced cars.
Some candidates confused ethical and environmental issues. A common mistake was to focus on
environmental issues and outline different ways a business could do this which could only be
awarded once. Others wrongly outlined the benefits to a business of being ethical.
(d) This question produced a range of responses. Many candidates recognised that higher interest
rates could increase the cost of borrowing or lower demand. Better responses were able to explain
how each point might affect the business in terms of higher cash outflows and lower revenue.
Many responses gained application marks for an appropriate reference to cars or for recognising
the business was planning to introduce new technology. Weaker responses struggled to develop
the points made. A common mistake was to state the business would pay more interest which was
repetition of the question. Others discussed the effects of inflation, exchange rates or imports.
(e) This was a challenging question for most candidates. Stronger responses recognised that import
tariffs could increase costs, and that this might lead to higher prices and less demand. These
responses recognised the effect on different types of products such as raw materials and finished
goods. Weaker responses were not able to develop the points made. Some candidates identified
possible effects such as fewer sales but needed to make it clear why tariffs were the reason for
this. Others misunderstood the question so focused on whether the business should import
products by considering factors such as quality and availability. Some candidates confused tariffs
with quotas. Several candidates started their answer by defining the term which was unnecessary.
Effective evaluation was rare. Those candidates who did attempt a decision tended to repeat
earlier points made.
Question 2
(a) Most candidates were able to identify at least one cause. Typical answers included lack of finance
or poor management. A common mistake was to mention problems any business might have such
as efficiency or communication which do not identify why a business might fail.
(b) Candidates who understood how to calculate the acid test ratio of 0.5 gained both marks. Some
candidates made an error in the final calculation, but they were still able to access the method
mark for showing their working. A common mistake was to calculate current ratio.
(c) Many candidates could identify reasons such as able to meet demand and benefit from economies
of scale. Only the strongest responses gained all four marks. A common mistake was to identify
types of inventories and not reasons for holding it. Other candidates repeated similar points which
could only be awarded once. For example, meeting demand and to meet orders are different ways
of saying the same thing.
(d) Good knowledge was evident in most answers. Better responses then developed the points made.
A common mistake was to repeat the knowledge point rather than offer development. Other
candidates simply reused the wording from the question stating they would use information from
the financial statements without identifying the information they would be interested in. A common
misconception was to assume profit is used to pay wages or suppliers. Some candidates made
vague comments about financial problems or cash issues. Application was surprisingly limited. One
way to include application is to use relevant data from Table 2.1. to support the points made. For
example, instead of financial problems candidates could have referred to the $10 000 loss or that
cash has fallen by $5000.
(e) Most candidates were able to access knowledge marks for identifying either advantages or
disadvantages of selling in a mass market. Stronger responses were able to explain how higher
potential sales or high competition could lead to additional revenue or lower prices respectively.
Other candidates compared the merits of a mass market with a niche market, which was another
valid approach. The strongest answers then used this comparison as the basis for their evaluation.
Weaker responses tended to be descriptive as candidates offered additional points of knowledge
rather than analysis. Instead of evaluation, most repeated points already made.
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Question 3
(a) This question was well answered by most candidates. Typical correct answers included giving out
tasks and checking the quality of work. However, some responses lacked precision. For example,
comments about looking after or helping employees. Others stated supervisors would ‘supervise’
which is repetition.
(b) A well answered question.
(c) Most candidates understood that a takeover would help reduce competition. Stronger responses
then linked their point to this insurance business. There were two common mistakes. Some
candidates demonstrated good knowledge but there was no attempt at application, so they missed
out on two potential marks. Others repeated a similar point for both answers which could only be
awarded once.
(d) Most candidates demonstrated good knowledge of the disadvantages of autocratic leadership.
Better responses then explained the consequence of issues such as low motivation for the
business. However, many candidates struggled to identify a relevant advantage. A common
mistake was to state who made the decision and not the advantage of supervisors doing so. Other
candidates focused on the potential benefits of quicker decision-making such as being able to
quickly respond to opportunities but forgot to include the reason why this was possible. Others
simply stated it would be quicker without saying what this related to.
(e) This question was a good discriminator. Candidates were clearly familiar with the concept of
sources of finance and most candidates were therefore able to access the knowledge marks.
Better responses developed points which the weaker answers struggled to do. To access the
analysis candidates needed to explain the advantage or disadvantage of using the respective
sources of finance. Only the strongest answers managed to gain marks for evaluation. These
answers compared the two sources and explained why one was likely to be a better than the other
for a business looking to expand. A common mistake was to identify short-term sources. There
were also vague statements about internal finance, external finance or borrowing from people
without identifying the source. Some candidates defined the terms which was unnecessary.
Question 4
(a) This area of the syllabus was not well understood, and the question was poorly answered as a
result. Some responses recognised that businesses would not be allowed to carry out misleading
advertising. However, most candidates struggled to identify two different ways legal controls might
affect the marketing strategy. Incorrect answers included identifying other areas of legal controls
relating to employment or the environment. Others named legal controls which was unnecessary. A
small number of candidates did not attempt this question.
(b) Well answered by most candidates. A common mistake was to confuse quality control with quality
assurance. Other candidates identified reasons why quality is important.
(c) Most candidates found the concept of sampling challenging. The best answers recognised that
sampling could help reduce cost and save time. However, application was rare as candidates
forgot to link points to the context of this start-up business. A common misconception was to
assume sampling is a different method of market research. Some candidates confused sampling
with test marketing. Others wrongly identified reasons for carrying out market research.
(d) This question was a good discriminator. Most candidates could identify at least one disadvantage
with unlimited liability and limited access to capital typical responses. Appropriate references to
photography and new business allowed many candidates to gain application marks. Weaker
responses identified disadvantages but either did not develop the points made or made no attempt
to link their answer to Viktor’s business. Others made assumptions about profit or workload. For
example, the latter ignored the fact a sole trader can employ workers, so whilst they may have to
work long hours, it is unlikely they must do all the work.
(e) Good knowledge was evident in many responses. Stronger responses were then able to develop
the points made. Instead of analysis some candidates stated it would motivate employees or make
them more efficient without explaining how the chosen method would help achieve this. Evaluation
was limited or not attempted. To access evaluation, candidates needed to discuss two relevant
© 2023
methods. Instead of explaining why the chosen method was the best way to use, many candidates
summarised points already credited. A common mistake was to identify methods such as piece
rate which are not appropriate for the service sector. Others discussed the benefits of motivation
which was not the question set. Many linked their answer to the scenario which was unnecessary
for this generic question.
© 2023
BUSINESS STUDIES
Paper 0450/22
Case Study
Key messages
Candidates should be reminded that throughout this paper they are expected to apply their business
knowledge and understanding to an unseen case study or business scenario. This is apart from one of the
(a) questions which will be generic. Applying answers to the case will ensure responses are appropriate for
the given situation.
• To do well in this paper, candidates must make clear reference, or application, to the accompanying
case study. Specific marks are allocated throughout the mark scheme in both (a) and (b) questions for
application. In this particular case study, candidates were expected to refer to a paint manufacturing
business.
• Candidates should try to give a full explanation of the positive and negative consequences of a business
decision when this is asked. Responses in (b) questions require developed reasoning rather than
simple description; listed points generally only gain Level 1 whereas an explanation of a point could
move the answer to Level 2.
• Several questions on this paper ask candidates to make a justified recommendation or conclusion.
Candidates should be reminded that it is important to offer a decision based on a balanced argument
earlier in the answer. A recommendation or conclusion should justify the option chosen, without full
repetition of the previous analysis, be applied to the case and compare the options by making reference
to why the alternative option(s) was rejected.
General comments
The majority of candidates had been well prepared for this examination and there were many high scoring
scripts. Candidates are developing strong examination technique and clearly understood what was expected
of them. The context of RW, a paint manufacturing business, provided an accessible scenario for candidates.
Those who applied their answers to the context of RW achieved higher marks.
Candidates must be reminded to take careful note of how many marks are awarded for each question, so
they are clear about the extent of developed explanation that is required for each answer. In the (a)
questions if it asks for one advantage and one disadvantage then candidates will not be credited for giving
more than one advantage or one disadvantage.
Many candidates demonstrated good knowledge and understanding of the full range of the syllabus that was
assessed, there was little evidence of topics not being understood. Although external benefits and external
costs proved more difficult concepts for some candidates.
Overall, there were many good scripts seen and very few weak ones. Application marks were often gained
but candidates should make sure that different examples of application are included in the (a) questions. The
conclusion/recommendation should also be applied to the case in (b) questions. Candidates should aim to
consider the consequences / implications / long-term / short-term / balance issues of the decisions to secure
Level 2 and Level 3 marks.
Question 1
(a) This question was well answered. The most popular advantages were high output/efficiency and
economies of scale leading to lower unit costs. The most popular disadvantages were that if one
© 2023
machine breaks down production will be stopped, and repetitive jobs may lead to lower motivation.
Weaker answers lacked sufficient development to gain full marks. Some candidates listed several
advantages/disadvantages rather than developing just one of each as the question asked, limiting
the marks that could be awarded. Production of paint and 1 million tins produced were the most
common examples of application in answers. To gain full marks explanation of both the advantage
and disadvantage needed to be applied to the context.
(b) This question was reasonably well answered. All three changes were briefly explained with simple
statements meaning most candidates were at least in the Level 1 mark band. Stronger responses
developed their answers to explain how RW was likely to be affected by each of the changes. The
decrease in competitors’ prices was the best answered of the three changes as candidates
recognised that RW was likely to lose customers and revenue if it did not also reduce its prices but
that if it had loyal customers then revenue may be maintained. The increase in consumer incomes
was assumed to lead to an increase in sales but it was not always made clear why this might
happen. Changes in consumer tastes and fashion sometimes focused on what was happening to
demand for wooden garden furniture rather than seeing RW as a supplier to these businesses.
Stronger responses went on to justify which change was likely to have the most effect on RW’s
revenue and why the other changes would have less effect. Application was often achieved for
references to paint, wooden garden furniture and bright/dark colours.
Question 2
(a) The majority of candidates were able to identify two problems. The most popular problems were
that the business would be more difficult to control, lack of finance, poor communication, lack of
commitment and motivation of employees. Stronger responses stated a problem, explained why
the problem had occurred and then provided a consequence of this problem to the business. To
achieve high marks candidates needed to ensure that each problem had three linked points as well
as being applied to the context.
(b) This question was quite well answered by most candidates. However, there were a number of
errors made in the interpretation of the data in the insert. These included there was no need to
build a new factory at location A since one was already there, that each location could provide a
new market when the main market was in the city, and they could use the port for dumping waste.
Many candidates did attempt to develop their answers rather than just repeating the information in
the insert, but development was often limited to simple impacts on RW, such as this will
increase/decrease costs, skilled workers are available so less training is needed, or high
unemployment means it is easy to get workers. Each of these points could have been further
developed to explain how the business would be affected. This style of question requires
interpretation of the data, for example, is it more or less significant to the business, how the
business is affected and why? Stronger responses analysed each of the three locations and
included a justified recommendation that included why the other two locations had been regarded
as less suitable.
Question 3
(a) Candidates responded well to this question. Many answers gave four legal controls such as
protection against unfair dismissal, minimum wage must be paid, protection against discrimination,
health and safety laws, maximum hours that can be worked, provision of an employment contract
and redundancy payments needing to be made. The second mark for each legal control was for a
development of how the law benefits employees. Weaker responses sometimes incorrectly gave
benefits to employers or benefits of being a member of a trade union. This question did not require
application to the context, but some candidates still tried to apply their answers to RW.
(b) This question was generally well answered. Candidates had a good understanding of the two
methods of training and could list the advantages and disadvantages of each method. However,
candidates did not always go on to explain the advantages and disadvantages. This kept some
answers in Level 1 and limited the marks achievable. Stronger responses developed points further
by discussing how these advantages and disadvantages affected affordability, efficiency and labour
turnover. Many answers did contain a recommendation that compared the two methods and
justified which method to use. Some answers tended to be quite theoretical and not applied to RW,
and others contained mirror answers, such as on-the-job being cheaper and off-the-job being more
expensive.
© 2023
Question 4
(a) If candidates understood external costs and external benefits then they tended to gain high marks.
Weaker responses discussed costs and benefits in general, such as more wages and more sales.
The most popular external benefits were reducing unemployment in the area, increased tax
revenue and improved infrastructure. The most popular external costs were river pollution from the
factory waste and other types of pollution, such as noise. Waste from the factory thrown into the
river, pollution from paint production, public limited company, wooden garden furniture and 100
employees being recruited to the new factory were the most common examples of application
included in answers to gain the second mark for each external benefit and external cost.
(b) This proved to be the most challenging question on the paper. Many candidates made basic
statements that if output doubled then everything else would double. Only stronger responses were
able to develop their answers thinking beyond this and considered why the figures may or may not
just double. For example, revenue of $10 million might not be achieved at the new factory because
it may take more than a year to produce and sell the same output as the original factory. Some
responses confused cost of sales with sales revenue and expenses were sometimes seen as the
purchase of raw materials. There were only a few examples of strong answers that included
consideration of why the figures for each section may or may not be achieved and then a
conclusion whether the forecast profit figures of $2 million for both factories would be achieved.
© 2023
™
Cambridge IGCSE

*7093880573*
Paper 1 Short Answer and Data Response May/June 2023

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_11_2023_1.14
2
1 WLT manufactures carpets. It exports 40% of its products. Globalisation has created opportunities
and threats for WLT. Its method of production allows WLT to use specialisation. All of its 60
employees understand that quality assurance is important. WLT’s directors are considering the
best way to increase efficiency.
(a) Define ‘specialisation’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two methods of production.
Method 1: ..........................................................................................................................
...........................................................................................................................................
Method 2: ..........................................................................................................................
........................................................................................................................................... [2]
(c) Outline two advantages to WLT of using quality assurance.
Advantage 1: ....................................................................................................................
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Advantage 2: ....................................................................................................................
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3
(d) Explain one opportunity and one threat of globalisation for WLT.
Opportunity: ......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
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Threat: ..............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
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........................................................................................................................................... [6]
(e) Do you think improving labour skills is the best way for a manufacturing business to increase
efficiency? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
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2 LMA is a family-owned restaurant. The business was started 20 years ago and has remained small.
LMA is a partnership. The partners are considering whether LMA should become a private limited
company. The Finance Manager is analysing LMA’s cash-flow forecast. An extract is shown in
Table 2.1.
Table 2.1
Extract from LMA’s cash-flow forecast 2023 ($000)
July August September
Cash inflow 420 300 330
Cash outflow 410 320 360
Net cash flow X (20) (30)
Opening balance 60 70 50
Closing balance 70 50 Y
(a) Identify two reasons why a business might have cash-flow problems.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
........................................................................................................................................... [2]
(b) Calculate X and Y.
X: ......................................................................................................................................
Y: ...................................................................................................................................... [2]
(c) Identify four examples of a cash inflow.
Example 1: ........................................................................................................................
...........................................................................................................................................
Example 2: ........................................................................................................................
...........................................................................................................................................
Example 3: ........................................................................................................................
...........................................................................................................................................
Example 4: ........................................................................................................................
........................................................................................................................................... [4]
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5
(d) Explain one advantage and one disadvantage to LMA of becoming a private limited company.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two reasons why a business might remain small. Which reason is likely to be most
important? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
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3 DZD is a large parcel delivery business. Many of its employees work part-time. DZD’s directors are
planning to expand the business and have to decide on a suitable source of finance for 20 new
vehicles. DZD will also recruit 60 new employees. The Human Resources Director is preparing a
job description for the new employees. She is considering using Maslow’s hierarchy of needs to
increase the motivation of DZD’s employees.
(a) Define ‘job description’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two levels from Maslow’s hierarchy of needs.
1: .......................................................................................................................................
...........................................................................................................................................
2: .......................................................................................................................................
........................................................................................................................................... [2]
(c) Outline two factors DZD should consider when deciding which applicants to recruit.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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7
(d) Explain two sources of finance DZD might use for the new vehicles.
Source of finance 1: ..........................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Source of finance 2: ..........................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think a service business should only employ part-time workers? Justify your answer.
...........................................................................................................................................
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4 NLR manufactures a range of branded skincare products including hand cream. Packaging of the
products is important. Like many businesses, NLR makes use of market segmentation. The Marketing
Director knows the stage of the product life cycle can influence NLR’s pricing decisions. He is
analysing market research data. This shows 85% of consumers expect businesses to respond to
environmental pressures.
(a) Identify two factors that might affect the accuracy of market research.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
........................................................................................................................................... [2]
(b) Identify two benefits to a business of using market segmentation.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
........................................................................................................................................... [2]
(c) Outline two ways NLR might respond to environmental pressures.
Way 1: ...............................................................................................................................
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Way 2: ...............................................................................................................................
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........................................................................................................................................... [4]
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9
(d) Explain how NLR’s pricing decisions might be affected at two different stages of the product
life cycle.
1: .......................................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
2: .......................................................................................................................................
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Explanation: ......................................................................................................................
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........................................................................................................................................... [6]
(e) Do you think promoting the brand image is the most important role of packaging? Justify your
answer.
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Cambridge IGCSE

*6006910796*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_12_2023_1.15
2
1 FBW manufactures watches using job production. It employs 5 full-time production employees.
Each worker is offered regular training. Last year FBW sold 600 watches. The Managing Director
plans to use break-even analysis to help decide whether to increase the price of its products. FBW’s
current break-even chart is shown in Fig. 1.1.
Break-even chart for FBW’s watches

120 000
100 000
total revenue
total costs
80 000
costs and
revenue $
60 000
40 000
20 000 fixed costs
0
0 100 200 300 400 500 600 700 800
number of watches
Fig. 1.1
(a) Identify two reasons why a business might offer training to its employees.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
........................................................................................................................................... [2]
(b) Calculate the following values using Fig. 1.1:
Break-even output: ...........................................................................................................
Break-even revenue: ........................................................................................................ [2]
© UCLES 2023 06_0450_12_2023_1.15

3
(c) Outline two possible effects on FBW’s break-even chart if the prices of its products are
increased.
Effect 1: .............................................................................................................................
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...........................................................................................................................................
...........................................................................................................................................
Effect 2: .............................................................................................................................
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(d) Explain two benefits to FBW of having full-time employees.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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Benefit 2: ..........................................................................................................................
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Explanation: ......................................................................................................................
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........................................................................................................................................... [6]
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(e) Do you think job production is the best method of production for a small business to use?
Justify your answer.
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2 Gloria is a sole trader. Her business provides house-cleaning services. Gloria uses telephone calls
to communicate with her 4 employees. She wants to expand the business by offering a repair
service. Gloria plans to carry out some market research. She has been told producing a business
plan can help to reduce risk. Gloria would also like to reduce her workload and is considering taking
on a business partner.
(a) Identify two ways a business plan can help a business to reduce risk.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(b) Identify two possible reasons why a business might want to expand.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
........................................................................................................................................... [2]
(c) Outline one advantage and one disadvantage to Gloria of using telephone calls as a method
of communication with her employees.
Advantage: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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Disadvantage: ...................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [4]
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(d) Explain two factors Gloria should consider when deciding whether to take on a business
partner.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two methods of primary market research a business could use to find out the demand
for a new product or service. Which would be the best method to use? Justify your answer.
...........................................................................................................................................
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3 VVA is a business based in country X. It manufactures school backpacks (bags). VVA uses retailers
as its channel of distribution. The Managing Director knows there are many factors that can affect
demand including the stage of the business cycle and how competitive the market is. VVA imports
45% of its raw materials. The Managing Director is worried that the introduction of import tariffs
and import quotas, as well as an appreciation in country X’s exchange rate, will affect VVA.
(a) Define ‘import tariff’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two reasons why some markets can become more competitive.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
........................................................................................................................................... [2]
(c) State the four stages of the business cycle.
1: .......................................................................................................................................
...........................................................................................................................................
2: .......................................................................................................................................
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3: .......................................................................................................................................
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4: .......................................................................................................................................
........................................................................................................................................... [4]
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(d) Explain one possible effect of the following changes on VVA when importing raw materials:
Introduction of import quotas in country X: .......................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Appreciation of country X’s exchange rate: ......................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think retailers are the best channel of distribution for a manufacturing business to use?
...........................................................................................................................................
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4 CPF is a clothing retailer. It is a private limited company. It has 4 shops and 30 employees. The
Finance Director is concerned about the amount of current assets because working capital is
important. The amount of retained profit is also low. CPF’s directors are planning to expand the
business by opening a new shop. A suitable source of long-term finance will need to be identified.
The plan to expand will affect many of CPF’s stakeholder groups.
(a) Define ‘retained profit’.
...........................................................................................................................................
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........................................................................................................................................... [2]
(b) Define ‘current assets’.
...........................................................................................................................................
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(c) Outline two possible reasons why working capital is important for CPF.
Reason 1: .........................................................................................................................
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Reason 2: .........................................................................................................................
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(d) Explain one way each of the following stakeholder groups might be affected by CPF’s plans
to expand its business.
Employees: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
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Suppliers: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think it is better for a private limited company to use debt (e.g. a loan) or equity (issuing
more shares) as a source of long-term finance? Justify your answer.
...........................................................................................................................................
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Cambridge IGCSE

*6251666735*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_13_2023_1.10
2
1 TDG is a bicycle retailer. It has 3 employees. TDG needs to maintain customer loyalty as the
business sells in a mass market. Simon, the manager, knows managing cash flow is important. He
is analysing TDG’s cash-flow forecast. An extract is shown in Table 1.1. Simon is considering ways
for TDG to overcome its short-term cash-flow problem in September.
Table 1.1
Extract from TDG’s cash-flow forecast 2023 ($000)
July August September
Cash inflow X 50 40
Cash outflow 50 50 Y
Net cash flow 10 0 (40)
Opening balance 20 30 30
Closing balance 30 30 (10)
(a) Define ‘mass market’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Calculate X and Y.
X: ......................................................................................................................................
Y: ...................................................................................................................................... [2]
(c) Outline two reasons why managing cash flow might be important for TDG.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [4]
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3
(d) Explain two ways TDG could overcome its short-term cash-flow problem in September.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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Way 2: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two methods a retailer could use to maintain customer loyalty. Which would be the
best method to use? Justify your answer.
...........................................................................................................................................
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2 KCL manufactures paper which is used in the production of newspapers and books. KCL holds a
high level of inventory and buys all its raw materials, including wood, from local suppliers. Quality
control is important. The Operations Director is considering ways to increase efficiency in the factory.
Pressure groups are trying to influence KCL’s decisions to ensure that the business does not create
more external costs than external benefits.
(a) Define ‘quality control’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two ways a pressure group might try to influence business decisions.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(c) State four benefits to a business of increasing efficiency.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
Benefit 3: ..........................................................................................................................
...........................................................................................................................................
Benefit 4: ..........................................................................................................................
........................................................................................................................................... [4]
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5
(d) Explain one external cost and one external benefit that may be created by KCL’s business.
External cost: ....................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
External benefit: ................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two factors a manufacturing business should consider when deciding how much
inventory to hold. Which factor is likely to be the most important? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [6]
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6
3 PCY provides insurance services for businesses such as farms and factories. Being ethical is
important to PCY. The business has 4 offices and 500 employees. Managers use different leadership
styles. The Managing Director is planning to change how PCY is organised and managed. He said:
‘I want to reduce communication barriers within the business. Delegation will be encouraged. The
span of control could change.’
(a) Define ‘span of control’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two leadership styles.
Leadership style 1: ...........................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(c) Outline two benefits to PCY of encouraging its managers to use delegation.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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7
(d) Explain two possible reasons why being ethical is important to PCY.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think lack of feedback is the main barrier to effective communication in a business?
...........................................................................................................................................
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........................................................................................................................................... [6]
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8
4 Meena wants to leave her job as a teacher to become a successful entrepreneur. Her business
will produce handmade jewellery. Meena knows that there is government support for business
start-ups. She plans to use market research to help identify a market segment for her jewellery.
Meena’s brother has offered to become her business partner but she cannot decide whether it
would be better to operate as a sole trader.
(a) Identify two ways a government might support business start-ups.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(b) Identify two ways a market can be segmented.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(c) Outline two characteristics Meena will need to become a successful entrepreneur.
Characteristic 1: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Characteristic 2: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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9
(d) Explain one advantage and one disadvantage to Meena of operating as a sole trader rather
than being in a partnership.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think accessing government sources, such as statistics, is the best method of market
research for a start-up business to use? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [6]
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Cambridge IGCSE

Paper 2 Case Study May/June 2023
INFORMATION
*9557593015-I*
insert.
06_0450_21_2023_1.15
2
Vegetable Palace (VP)

VP was started 10 years ago in country Z. It is a public limited company. VP has a chain of 500 fast-food
restaurants that operate across country Z. The VP brand is famous for its vegetarian food, this means
none of its meals contain meat.
VP has a head office in Main City where all the directors and senior managers work. There are many
barriers to communication. Each VP restaurant has a Manager, an Assistant Manager and 50 employees
who cook and serve the meals. Restaurant Managers are often very busy and they are considering
delegating some of their tasks to the Assistant Managers.
The ingredients for the restaurants are ordered in bulk by head office and then distributed from its
warehouse to each of the restaurants. However, some senior managers think that Restaurant Managers
should purchase their own ingredients from local suppliers. This would mean the ingredients would be
fresher and would allow variations in the meals served.
VP wants to expand into another country. It will choose between the two countries shown in Appendix
2. VP will also need to decide how to enter a new market in another country. It has the option of forming
a joint venture with another business or franchising the VP brand. The choice of finance will need to be
considered for the expansion and the amount of finance will depend on the option chosen.
Appendix 1
Advertisement for VP's restaurants
Choose VP for the finest vegetarian meals. Our service is the fastest possible!
You will receive your meal in less than 5 minutes – guaranteed!
Delicious and varied meals for even the biggest of appetites and all at competitive prices.
New meals are being introduced all the time.
There is a VP restaurant near you – we look forward to serving you soon.
© UCLES 2023 06_0450_21_2023_1.15

3
Appendix 2
Summary of the two possible countries that VP could choose to locate its new restaurants.
Country A Country B
Average variable cost Average variable cost

Raw materials
$6 per meal $2 per meal
Low unemployment High unemployment

Labour
$10 per hour for each employee $5 per hour for each employee
Many competitors Few competitors

Market
Average price per meal = $20 Average price per meal = $10
Appendix 3
Email from VP’s Managing Director to VP’s Marketing Director
To: VP’s Marketing Director
From: VP’s Managing Director
Date: 31 March 2023
Re: Economic changes in country Z
Did you see the news this morning that interest rates will be raised from 3% to 5% later today? This will
have several effects on our business in country Z.
The news also said that the exchange rate in country Z has depreciated. We will have to consider how
this will affect our business, especially as we import 30% of our ingredients into country Z.
There are also new legal controls being introduced that mean we have to list all the ingredients used in
each of our meals on the menu. We do reprint menus every time we change the meals, but it is something
to consider.
Speak later today.
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Cambridge IGCSE

*9557593015*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_21_2023_1.15
2
1 (a) Explain four barriers to communication for a business.
Barrier 1: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Barrier 2: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Barrier 3: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Barrier 4: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 06_0450_21_2023_1.15

3
(b) Consider the following two ways VP can purchase its inventory. Which way should it use?
• Head Office purchases the inventory for all the restaurants.

• Restaurant Managers purchase their own inventory from local suppliers.
Head Office purchases the inventory for all the restaurants: ...........................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Restaurant Managers purchase their own inventory from local suppliers: .......................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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4
2 (a) Explain two advantages and two disadvantages of VP’s Restaurant Managers delegating
tasks to their Assistant Managers.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 1: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 2: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 06_0450_21_2023_1.15

5
(b) Using Appendix 2 and other information, consider the two countries VP could choose to locate
its new restaurants. Which country should VP choose? Justify your answer.
Country A: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Country B: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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6
3 (a) Explain two possible reasons why VP wants to expand.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 06_0450_21_2023_1.15

7
(b) Consider the benefits and limitations of the following two ways VP can enter a new market in
another country. Which way should VP choose? Justify your answer.
• Joint venture
• Franchising
Joint venture: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Franchising: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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8
4 (a) Explain, using an example, one reason why VP might need:
• short-term finance
• long-term finance.
Short-term finance: ...........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Long-term finance: ............................................................................................................
...........................................................................................................................................
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...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
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9
(b) Using Appendix 3 and other information, consider how the following three changes in country
Z may affect VP. Which change is likely to have the greatest effect on VP's profits? Justify
your answer.
• Increase in interest rates.
• Depreciation of country Z’s exchange rate.
• New legal controls which require all restaurants to list the ingredients in their meals.
Increase in interest rates: .................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Depreciation of country Z’s exchange rate: ......................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
New legal controls which require all restaurants to list the ingredients in their meals: .....
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
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...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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Cambridge IGCSE

INFORMATION
*2035001524-I*
insert.
06_0450_22_2023_1.14
2
Everyone Theatre (ET)
Zane and Zaara are both actors. They plan to start up a theatre in a low-income area of Main City. Zane
and Zaara believe that helping the community is as important as being successful entrepreneurs.
The theatre will be a private sector business and Zane and Zaara have to decide whether to start up as
an unincorporated business (partnership) or as a limited company. Zane is planning to prepare a cash-flow
forecast for the first year. Zaara knows they will need to set business objectives for the theatre and also
decide on a leadership style to use when managing employees. ET will have 24 part-time employees
as shown in the organisational chart in Appendix 1.
Zane and Zaara plan to put on performances in the evenings for local people and tourists. There will be
100 seats in the theatre but not all the seats will be sold if the price is too high. The Marketing Manager,
Zaara, will need to decide which performances to put on, what price to charge and which refreshments
to sell. Zaara will also need to decide between the two possible options for the first performance when
the theatre opens. Information on the two options is shown in Appendix 2.
In the daytime the theatre building will be used by Daycare, a local social enterprise. Daycare takes care
of young children up to the age of 5 so that low-income family members can go out to work. It also
provides education for the children which helps their development and progress before they start school.
Some of Daycare’s objectives are different to those of ET.
Appendix 1
Proposed organisational chart for the theatre
Marketing Manager (Zaara) Finance and Administration

Manager (Zane)
Backstage e.g. Actors Promotion Cleaners Ticket office

costumes and (10) (2) (3) (3)
scenery
(6)
Note: The numbers in brackets are the number of part-time employees who work in each department.
© UCLES 2023 06_0450_22_2023_1.14

3
Appendix 2
Forecast data for the two possible options for ET’s first performance at the theatre
For each performance Option 1 Option 2
Number of actors/employees 7 24
Average wage cost per actor/employee $30 $10
All other costs including scenery, costumes and

$1000 $2000
promotion
Forecast revenue assuming all 100 seats are sold $1000 $2500
Appendix 3
Email from Zane to Zaara
To: Zaara
From: Zane
Date: 1 April 2023
We want to support the local community and we need to make decisions about the following.
Should we:
• Pay fair wages even though they may be higher than those paid by competing theatres?
• Only buy costumes produced in the local community?
• Purchase all refreshments from suppliers that do not pollute the environment?
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Cambridge IGCSE

*2035001524*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_22_2023_1.14
2
1 (a) Explain four characteristics needed for an entrepreneur to be successful.
Characteristic 1: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Characteristic 2: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Characteristic 3: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Characteristic 4: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 06_0450_22_2023_1.14

3
(b) Consider the advantages and disadvantages of starting up ET as either an unincorporated

business or as a limited company. Which should Zane and Zaara choose? Justify your answer.
Unincorporated business: .................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limited company: .............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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4
2 (a) Explain one business objective for ET and one other objective that a social enterprise like
Daycare might have.
Business objective for ET: ................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Objective for a social enterprise like Daycare: .................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 06_0450_22_2023_1.14

5
(b) Using Appendix 2 and other information, consider the two options for the first performance at
the theatre. Which is the best option for Zaara to choose? Justify your answer using suitable
calculations.
Option 1: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Option 2: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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6
3 (a) Explain four reasons why it is important that Zane prepares a cash-flow forecast before starting
ET.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 3: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 4: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
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7
(b) Consider the following three roles of marketing for ET. Which role will be the most important
for ET to be successful? Justify your answer.
• Identifying customer needs

• Satisfying customer needs
• Maintaining customer loyalty
Identifying customer needs: ..............................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Satisfying customer needs: ..............................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Maintaining customer loyalty: ...........................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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8
4 (a) Explain two leadership styles that Zane and Zaara could use when managing ET’s employees.
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 06_0450_22_2023_1.14

9
(b) Consider the following three ethical issues for the theatre. Which ethical issue is likely to have
the biggest effect on ET? Justify your answer.
• Paying fair wages to employees

• Only buying costumes produced in the local community
• Purchasing all refreshments from suppliers that do not pollute the environment
Paying fair wages to employees: ......................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Only buying costumes produced in the local community: ................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Purchasing all refreshments from suppliers that do not pollute the environment: ............
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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Cambridge IGCSE

INFORMATION
*3747335787-I*
insert.
06_0450_23_2023_1.13
2
Regency Rugs (RR)
RR manufactures rugs made from wool. It only sells its products in country Z. Many of RR’s competitors
are multinational companies. RR is a private limited company which has been operating for 5 years and
has a reputation for excellent customer service. RR’s directors want the business to expand but are
aware that this can have problems as well as benefits.
RR produces machine manufactured rugs in its factory. These rugs are standardised and have a similar
design so they are quick to produce. They are sold at a low price.
RR’s Operations Manager wants to increase the productivity of the workers in the factory. This could
be achieved by introducing new technology or by increasing employee training. The cost of both options
will need to be considered.
RR’s directors are considering expanding by selling its rugs in new markets in other countries. The
Managing Director thinks that using ecommerce will be the best way to achieve this expansion. A website
would need to be created to enable the business to take orders for their rugs and to receive payments
from customers. RR will need to communicate the expansion plans to its employees.
The Marketing Manager knows that RR needs to identify a suitable method of promotion for its rugs
when it enters the new markets. Market research has been carried out to help identify the best method
of promotion to use. An extract from this research can be found in Appendix 1.
Appendix 1
Extract from the market research results for the new markets in other countries
90
80
70
% of population
60
50
40
30
20
10
0
watch TV watch sport drive a car
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Appendix 2
Organisational chart for RR
Managing Director
Finance Director Operations Director Marketing Director Human Resources

Director
Financial Factory Manager Sales Manager Administration officer

Assistants
(2)
Factory Supervisors Salesperson
(3) (3)
Production employees
(30)
Appendix 3
Extract from RR’s income statement
2021 2022
Revenue $25m $32m
Cost of Sales $10m $16m
Expenses $10m $8m
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Cambridge IGCSE

*3747335787*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
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1 (a) Explain four reasons why a business might become a multinational company.
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(b) Consider the advantages and disadvantages of the following three methods of promotion RR
could use in the new markets. Which would be the most suitable method for RR to use? Justify
your answer.
• Television
• Billboards
• Sponsorship of a sports team
Television: .........................................................................................................................
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2 (a) Explain two problems RR might experience as it expands.
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(b) Consider three methods RR could use to communicate the expansion plans to its employees.
Which method should RR choose? Justify your answer.
Method 1: ..........................................................................................................................
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Method 3: ..........................................................................................................................
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Recommendation: ............................................................................................................
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3 (a) Explain one responsibility of each of the following in RR:
Directors: ..........................................................................................................................
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Managers: .........................................................................................................................
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(b) Consider the advantages and disadvantages of the following two methods RR could use to
increase the productivity of its employees. Which method should RR choose? Justify your
answer.
• Introducing new technology

• Increasing training
Introducing new technology: .............................................................................................
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4 (a) Explain one opportunity and one threat to RR of using ecommerce.
Opportunity: ......................................................................................................................
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(b) Using Appendix 3 and other information, consider whether RR’s Managing Director should be
concerned about the financial performance of the business. Justify your answer using suitable
calculations.
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0450 Business Studies June 2023
BUSINESS STUDIES
Paper 0450/11
Short Answer/Data Response 11
Key messages
• As in previous sessions candidates should be reminded to learn precise definitions for all
key terms and to use a different point of application and analysis for each point of
knowledge. A point can only be credited once within a given answer.
• Effective evaluation is an area which continues to require development. Candidates should
be reminded that evaluation must include a justified decision that follows on from the points
raised in the answer. A repetition of points already explained in the answer will not gain
evaluation marks. The mark scheme for each part (e) question includes one example of
how evaluation may be demonstrated in the answer.
General comments
Candidates this session found some of the questions quite challenging. This was particularly true of
Questions 2(a), 2(d) each of the part (e). Candidates had quite limited knowledge of some aspects of these
topics. This led to candidates trying to alter the questions asked to fit with their knowledge base. This was
most noticeable in Questions 1(d), 2(d) and 4(e).
Candidates would benefit from a greater depth of knowledge of topics 1.3.3, 1.4.1, 6.2.1 and 6.3.1
Question 1
(a) Candidates were generally aware of this term and recognised that the key elements were the focus
and higher skills level. Weaker responses lost marks by confusing specialisation with division of
labour.
(b) This topic was well understood by most candidates. Some responses confused methods of
production with management to achieve lean production. Such responses incorrectly stated lean,
JIT and Kaizen.
(c) Candidates did not clearly understand this topic. Better responses identified the benefits of fewer
complaints and less reworking for this manufacturing business. Some strong responses struggled
to apply both of their knowledge points to the business in the stem of the question and simply
repeated carpet in each answer. Weaker responses incorrectly explained that this would increase
quality or missed the focus of the question and described the benefits to the customer not WLT.
(d) This question produced a range of responses. The best answers explained the benefit of increased
access to new markets and the potential threat of increased competition for this manufacturing
business. Responses needed to develop fully to gain both explanation marks available. Candidates
for example who identified increased competition as a threat could not explain the potential of this
on WLT. Some candidate’s lost marks by confusing globalisation with international trade. A
noticeable number of candidates discussed the dangers of child labour, cultural differences and
quotas which were irrelevant to the question asked.
© 2023
(e) This was a challenging question for candidates and a mark of one or two was common as
candidates struggled to provide effective analysis. The strongest answers recognised the
improvements may reduce mistakes reducing wastage costs but at a financial cost in terms of
training time and money. The weakest answers simply repeated the word efficiency or stated that
output would increase rather than output per worker.
Question 2
(a) A common error was to define a cashflow problem i.e., cash inflow less than cash outflow rather
than identify the reasons why this might occur. The most common correct answers were a fall in
demand and allowing customers too long a credit period.
(b) Over 80 per cent of candidates correctly calculated these two figures. Some candidates lost a mark
by indicating incorrectly that X was a negative figure.
(c) A wide variety of suitable cash inflows were given in answer to this question. A small number of
candidates did not attempt this question. An error evident in several responses was to state
investors and trade receivables which are not inflows of money. Better responses precisely
identified funds from investors and payments to clear trade receivables.
(d) Some candidates found this to be the most challenging part (d) question on the paper. Advantages
were often explained correctly but a suitable disadvantage was not always clearly identified. A
common incorrect answer was that funds would be limited as this was not a PLC. The question
required a disadvantage of the private limited companies not a discussion of why PLC would be
better. The strongest responses were able to explain how limited liability would benefit the owners,
but that legal formalities would be a disadvantage.
(e) Candidates frequently misunderstood this question. The strongest answers identified that a lack of
finance, a small market size or the fear of diseconomies of scale would limit the ability of a
business to expand. Very few candidates were able to offer effective evaluation, those who
attempted it often simply repeated points already credited as analysis. Weaker answers offered
general statements such as ‘because it is expensive to change’. Such points were too vague for
credit.
Question 3
(a) Some candidates confused a job description and person specification. Often such candidates were
able to gain one mark by showing some understanding of the term. The weakest responses simply
reordered the words and stated that this was a ‘description of the job’ gaining no credit.
(b) All five levels of Maslow were presented in answering this question. Some candidates however,
provided answers which were confused such as psychological or self – fulfilment. These answers
were not rewardable. A small number of candidates did not answer this question.
(c) This question was generally, well answered by most candidates who explained the qualifications,
skills or experience required for this delivery business.
(d) This question produced a range of responses. Candidates who understood suitable methods of
finance frequently repeated the same application and analysis points in both parts of the question.
Most frequently this was by explaining loans would have interest and retained profit would not. This
mirror argument was not sufficient to gain both analysis marks. Several responses confused profit
and revenue with retained profit. The weakest responses stated short-term sources such as an
overdraft which is unlikely to be sufficient to purchase 20 vehicles. Several candidates did not
attempt this question.
(e) Candidates struggled to gain the analysis and evaluation marks available in this question, many
simply identified two points of knowledge concerning part-time workers. The strongest answers
focused on the view that part-time workers would be more flexible and would create an overall
lower wage bill. Weaker answers explained incorrectly that part time workers would be less tired or
lack skills. Such candidates seemed to be unaware that highly skilled consultants are often
employed on a part time basis as their specialist skills are not required full time.
© 2023
Question 4
(a) This question was well answered the most common correct answers being sample size, bias, and
poorly worded questions. Weaker responses incorrectly stated that a key factor was the type of
research completed. Primary research was often stated incorrectly as being more accurate.
(b) This topic was not well understood. Very few candidates provided two distinct benefits. Many
gained one mark by showing some awareness that segmentation would make research simpler.
The weakest responses incorrectly stated that segmentation would allow a business to ‘charge a
higher price’. Some candidates did not attempt this question.
(c) Candidates who recognised that the question required an explanation of methods NLR could use to
be more environmentally friendly scored highly. The best responses identified an action, such as
using recyclable material and linked this to the skin care producer. Many candidates confused
environmentally friendly and ethical actions. Such responses often explained that the business
should not test products on animals. These responses gained zero marks.
(d) There were few good answers to this question. Knowledge marks were awarded for correctly
stating either two stages of the product life cycle or pricing methods. Responses which stated a
stage of the life cycle life and then explained how prices would set in this stage scored highly. Such
responses were able to clearly apply their answers to the situation described in the question stem.
Responses which identified pricing strategies by name often struggled to develop in the context of
the question set. The weakest responses confused the product and business cycle and stated peak
and trough as their two stages. A small but significant number of candidates did not attempt this
question.
(e) A mark of 2 or 3 was common on this question. Better responses stated two functions of
packaging. Very few responses effectively explained the link between brand image and packaging
to gain the analysis marks available. Those that did often gained one knowledge mark by
explaining the potential to attract customers or stand out from competitor’s products. The weakest
responses explained the importance of brand image with no link to packaging which was the key
focus of the question.
© 2023
BUSINESS STUDIES
Paper 0450/12
Short Answer/Data Response 12
Key messages
• Definitions need to be clear and precise.

questions as this provides the basis for application. Different points of application are needed to access
both application marks within the same question.
raised in the answer, and clearly answer the question set. A decision alone, or summary of points made,
are not evaluation. An example of an answer which includes evaluation can be found in mark scheme
General comments
This was an accessible paper with most candidates demonstrating good knowledge of most topics. Many
candidates continue to find accessing the application, analysis and evaluation marks more challenging.
Parts (a) and (b) of each question were generally well attempted. However, definitions often lacked the
necessary precision to access the marks available.
Candidates should be reminded that questions can be set on any area of the syllabus. It was clear that some
candidates were not familiar with topics such as why markets are competitive and the stages of the business
cycle.
For most part (c) (excluding 3c which only assessed knowledge) and all part (d) questions, candidates
needed to use information from the stem to link their answers to the scenario to access application marks.
Candidates should not use the same application for more than one point in their answer.
Candidates must understand which skills are being assessed in each question. Some candidates included
analysis in part (c) questions and application in part (e) questions. However, part (c) questions only assess
knowledge or knowledge and application, while part (e) questions assess knowledge, analysis and
evaluation. No other skills can be awarded in these questions.
Developing evaluation skills is important. The School Support Hub provides skills exercises which candidates
might find helpful. Many responses still do not include any decision in part (e) questions. Of those
candidates who did attempt an evaluative comment, most were unable to provide reasoned statements to
support the decision made. One approach is to make a choice, provide a reason for this decision, and then
explain why it is better than the alternative discussed.
Question 1
(a) This question was well answered by most candidates.
(b) Candidates who understood break-even charts did well on this question. A common mistake was to
represent break-even output as a financial value instead of as units. Break-even output was 500
units and break-even revenue was $60 000.
© 2023
(c) There were many excellent answers to this question. A common mistake was to use the same
application for both answers. Other candidates focused on the impact of higher prices on sales -
forgetting that a break-even chart assumes all items are sold.
(d) This question was poorly answered by most candidates. Responses which gained knowledge
marks did tend to gain application for relevant references to this watch manufacturer. However,
most candidates struggled to develop their points. Many candidates continue to make incorrect
assumptions about full-time employees. For example, they must be more skilled, efficient or
motivated which is not necessarily true as this depends on the job and/or the person. Other
candidates defined the term or simply stated they would produce more because they were there for
longer periods of time. These answers were not awarded any marks.
(e) Good knowledge of job production was evident in most responses. Better responses were able to
develop the points made. Instead of analysis weaker responses identified additional knowledge
points. A common error was repetition. For example, stating job production has no economies of
scale while batch production allows for some economies of scale is classed as a mirror argument
so will only be credited once. Flow production was mentioned in many responses, but this is not
appropriate for a small business. Other candidates applied their answer to FBW which was
unnecessary in this generic question. Where a decision was made, this was either not supported or
repeated earlier points made so did not count as evaluation.
Question 2
(a) The best answers identified ways stated in the mark scheme such as help set objectives and
support requests for loans. A common mistake was a lack of precision. Answers such as help
decision making, avoid problems or be more organised were too vague. Other candidates identified
elements of a business plan which was not the focus of this question.
(b) A well answered question by most candidates.
(c) Good knowledge was evident in most responses with speed and no written record typical
advantages and disadvantages respectively. A common mistake was a lack of application which
meant candidates missed two potential marks. Other candidates outlined general factors such as a
language barrier which could refer to any method of communication. Some candidates made vague
references that using a phone was easy without indicating why this might be the case.
(d) Most candidates could identify at least one factor with skills and access to finance popular choices.
Better responses were able to access the application marks by recognising that Meena was a sole
trader or that she was looking to expand her house-cleaning business. Most candidates found it
difficult to offer relevant development. A common mistake was to focus on who should be the
partner rather than whether she should have one.
(e) Candidates were clearly familiar with the concept of market research and most candidates were
therefore able to access the knowledge marks. Better responses tended to gain the analysis marks
for explaining either the advantages or disadvantages of the methods discussed. The best answers
then used this information as the basis for their evaluation. However, to access both evaluation
marks, they needed to focus on this research being for a new product or service. Some candidates
described a method without identifying it which was necessary to access any marks. Other
candidates made vague statements such as it would be easy to gather information or commented
on the accuracy of the data gathered. A small number of candidates had the wrong focus as they
identified reasons for carrying out primary market research.
Question 3
(a) Most candidates understood the term but did not gain the second mark as they said the tax was on
imported goods without stating what an import was. A common mistake was to confuse an import
tariff with a quota. Many responses lacked precision as they referred to money or costs which could
be confused with the general costs of international trade. Other candidates identified reasons why
tariffs were introduced.
(b) This question was poorly answered by most candidates. A common mistake was to identify factors
affecting demand rather than reasons why some markets are more competitive.
© 2023
(c) Most candidates could identify at least one stage with growth the most popular correct answer. The
most common mistake was to confuse the business cycle with the product life cycle.
(d) This question was split into two parts. Many candidates understood that an import quota is likely to
reduce the amount of goods that could be imported. Better responses developed this point to show
how this might affect the business in terms of lower output or having to find alternative suppliers. A
common mistake was to confuse quotas with tariffs. Most candidates found the second part more
challenging. Many confused currency appreciation with currency depreciation, so wrongly assumed
that imports would be more expensive.
(e) This question produced a range of responses. The best answers understood the role retailers could
play through wider distribution and advertising and explained how this could lead to higher sales or
lower costs. Most candidates had some knowledge of distribution channels, but many had the
wrong focus as they discussed the advantages to retailers, wholesalers or customers rather than
manufacturers. Weaker responses struggled to develop the points made. Without analysis,
candidates could not access evaluation marks.
Question 4
(a) Many candidates showed partial understanding of the term but did not provide a clear definition. A
common mistake was to define profit or identify uses of profit. Other candidates reordered the
words which showed no understanding.
(b) Most candidates either understood that a current asset was owned or that it was held in the
business for less than one year. The best answers mentioned both elements. One common
mistake was to refer to ‘a short period of time’ without specifying what this meant. Some repeated
the word ‘asset’ or gave examples which did not define the term. Other candidates confused assets
with liabilities by saying the assets were owed to others.
(c) Many candidates understood that working capital is used to pay day-to-day expenses. However,
most candidates found it difficult to outline a second reason. Common mistakes were to offer
different examples of costs such as paying employees and suppliers which could only be awarded
once. Other candidates confused working capital with profit. Some responses defined the term
which was unnecessary.
(d) This question produced a range of responses. Candidates generally did better when considering
the effect on employees as stakeholders, but often struggled to explain the effect on suppliers.
Stronger responses recognised promotion could be an opportunity for employees while suppliers
might gain additional orders. They then developed these points to show the effect on wages and
revenue respectively. There were many mistakes and misunderstandings. For example, some
assumed suppliers would provide raw materials to CPF ignoring the context which states CPF was
a retailer. Other candidates assumed the expansion would mean employees being made
redundant or receiving lower wages, while suppliers would not be paid. Some responses focused
on the effect on CPF instead of the named stakeholders.
(e) Good knowledge was evident in many responses, but most candidates struggled to develop their
points. Instead of analysis candidates tended to identify additional points of knowledge. A common
mistake was repetition. Stating a loan incurs interest but equity does not is the same point and will
only be credited once. Care is needed when using abbreviations. For example, PLC is commonly
used to refer to a public limited company so such answers could not be credited. Some candidates
compared the advantages and disadvantages of the two types of limited companies which did not
answer the question. Definitions of a private limited company were unnecessary.
© 2023
BUSINESS STUDIES
Paper 0450/13
Short Answer/Data Response
Key messages
• Definitions must be clear and precise.

questions as this provides the basis for application. Different contextual references are needed to
access the two application marks within the same question.
raised in the answer, and clearly answer the question set. A decision alone or summary of points made
is not evaluation. An example of an answer which includes evaluation can be found in the mark scheme
General comments
The paper proved to be accessible and produced a wide range of marks. Overall, candidates showed good
knowledge of concepts, but many found accessing the application, analysis and evaluation marks more
challenging.
The part (a) and (b) of each question were generally well attempted. However, many candidates lacked the
necessary precision in definitions or range of knowledge to access all the marks available.
It is important for candidates to be reminded that questions can be set on any area of the syllabus. It was
clear that some candidates were not familiar with topics such as mass market and communication barriers.
For most part (c) (excluding 2(c) which only assessed knowledge) and all part (d) questions, candidates
need to use information from the stem to link their answers to the scenario to achieve application marks.
Candidates should not use the same application for both points within a question.
Candidates must understand which skills are being assessed in each question. Some included analysis in
part (c) questions and application in part (e) questions. However, part (c) questions only assess knowledge
or knowledge and application while part (e) assesses knowledge, analysis and evaluation. No other skills
can be awarded in these questions.
Candidates need to develop their evaluative skills. Of those candidates who did attempt an evaluative
comment, many were unable to provide reasoned statements to back up the decision made. One approach
is to make a choice, provide a reason for this decision and then explain why it is better than the alternative
discussed.
Question 1
(a) There was a lot of confusion about the term ‘mass market’. Full definitions were rare. Some gained
marks for understanding it would have many customers. Only the best responses recognised the
sales were for a single product. Many candidates did not score any marks on this question as
answers about lots of products or many sellers were incorrect.
© 2023
(b) This question was well answered by most candidates. Those who understood how a cash flow
forecast works gained both marks. The most common incorrect answer was for Y where
candidates wrote $0, as the candidates did not realise net cashflow was a negative value.
(c) This question proved challenging for most candidates. Better responses recognised that cash is
needed to pay pay-to-day expenses or for use in emergencies. Unfortunately, many forgot to link
points to the context so missed the opportunity to gain application marks. A common
misconception was to confuse cashflow with profit so answers about funding expansion were not
credited.
(d) Many candidates gained knowledge for identifying ways such as asking customers to pay sooner
or asking creditors for longer to pay. Better responses then explained how each way could increase
cash inflows and reduce cash outflows respectively. However, many answers lacked precision by
referring to cashflow without stating which element of it was affected. Others confused cashflow
with profit or revenue. Some candidates discussed the impact on production which ignored the fact
the business was a retailer. For applied questions, it is important to read the question and context
carefully.
(e) Most gained knowledge for identifying ways such as loyalty schemes or good customer service.
Only the best responses were able to develop points to show how the method worked. Instead of
development, most simply stated that it would ‘increase customer loyalty’ or used other words such
as ‘customers would return’, which is another way of saying the same thing. Some candidates
explained ways to increase sales which is a different question.
Question 2
(a) Most candidates understood that quality control involves checking the work. However, many
struggled to provide a precise definition. Some confused the term with quality assurance, which
involves carrying out checking throughout the production process, rather than just at the end.
Others misread the question so identified reasons for quality control.
(b) Most candidates achieved one mark for identifying actions a pressure group might take but some
struggled to identify a second way. There were a range of mistakes. Some candidates identified
ways a business might try to be environmentally friendly or identified actions only available to
governments. Other candidates identified reasons why a pressure group might want to influence
decisions.
(c) Many candidates were able to identify two or three benefits of increasing efficiency with fewer
mistakes and increased output being typical responses. Most candidates struggled to identify four
benefits. A common mistake was to assume that efficiency would increase sales.
(d) Good knowledge was evident in most responses. Better answers then used the information from
the scenario to help access the application marks. Analysis was generally limited as most
candidates tended to repeat the knowledge point. A common mistake was to identify costs and
benefits to the business rather than a third party.
(e) Most candidates were able to identify at least one factor, namely storage space or perishability.
Better answers were then able to develop these points to show why each might be a factor to
consider when deciding how much inventory to hold. Instead of analysis, many candidates simply
repeated the knowledge point or identified another factor. Evaluation was limited or not attempted.
Question 3
(a) This was another question where candidates who had learned the definition gained both marks.
Most candidates gained marks for understanding that it was about who reports to whom. A
common mistake was to confuse span of control with other concepts such as chain of command or
organisational chart. Others made vague statements which attempted to reuse the word control
without linking it to the number of employees.
(b) This question was well answered by most candidates. Candidates were not penalised for the
spelling of laissez-faire if the meaning was clear. A common mistake was to offer vague
descriptions of different leadership styles without identifying them.
© 2023
(c) Most candidates understood that delegation could allow managers time to focus on other tasks or
increase employee motivation. A common mistake was to forget to identify who the point related to.
For example, some candidates said it would ‘reduce workload’ without reference to the managers.
Other candidates made vague statements about communication barriers or increased efficiency.
(d) Good knowledge was evident in most answers. Better responses did develop points in context. For
example, a better reputation could result in higher sales for this insurance business. Some
candidates had the wrong focus so discussed problems of being unethical while others explained
how a business could be ethical. Neither approach was awardable. Many missed out on application
marks as there was no attempt to link points to the scenario.
(e) This was a challenging question for most candidates. Knowledge marks were generally awarded
for identifying other barriers to communication. All candidates struggled to develop points. Without
analysis, evaluation cannot be considered. Many candidates misinterpreted this question so
focussed on communication in general rather than the problems caused by a lack of feedback as a
barrier to communication. Other candidates identified ways to encourage feedback or reasons why
people communicate. These answers could not be credited.
Question 4
(a) Most candidates could identify at least one way with loans being a typical response. A common
error was repetition. Many candidates identified two types of financial support which can only be
awarded once. Others made vague comments such as offering to help with something. Some
candidates identified reasons why a government might support start-ups. Such answers were not
credited.
(b) Candidates tended to score either two or zero marks on this question. A common mistake was to
identify types of markets, namely mass or niche, instead of stating ways a market can be
segmented.
(c) This question was well answered by most candidates. The best responses outlined two
characteristics and used the information provided to link their points to Meena, who was planning to
start a jewellery business. Weaker responses tended to offer vague descriptions without identifying
a specific characteristic. Some candidates wrongly outlined features of a manager or sole trader.
(d) Candidates were clearly familiar with the concept of sole trader and therefore most were able to
access at least one of the knowledge marks. Many candidates then gained application marks for an
appropriate reference to jewellery or for recognising the business was a start-up. Weaker
responses struggled to develop points made. The most common answer was ‘not having to share
profit’ but no awardable analysis was offered for this. Many candidates wrongly assumed that
sharing profit would mean less profit, but this is not necessarily true as a successful business might
generate more profit for the two partners to share.
(e) Good knowledge was evident in some responses. However, most candidates struggled to develop
points in enough detail to gain analysis. Without analysis it is not possible to access evaluation.
One way to access analysis could be to consider other methods of market research and explain the
advantages and disadvantages of these alternative approaches. This could then form the basis for
deciding whether government sources are the best method for a start-up business to use. A
common mistake was to identify reasons for using market research. Some candidates compared
primary and secondary methods of market research in general terms rather than discussing
individual methods.
© 2023
BUSINESS STUDIES
Paper 0450/21
Case Study 21
Key messages
knowledge and understanding to an unseen case study or business scenario. This is apart from one (a)
question that will usually be generic. Applying answers to the case will ensure responses are appropriate for
each given situation.
case study. Specific marks are allocated throughout the mark scheme in both parts (a) and (b) for
application. In this particular case study candidates were expected to refer to a large business that
operates a chain of 500 fast-food restaurants. It is advisable for candidates to ask themselves about the
size of the business, is it a service or manufacturer and what is the type of business organisation? This
may add to the quality of their answers.
• Candidates should try to give a full explanation of positive and negative consequences of a business
decision when this is asked for. Responses require developed reasoning rather than simple description;
listed points generally only gain Level 1 whereas an explanation of a point could move the answer to
Level 2. Few well developed points will score higher marks than a long list of simple statements.
Candidates should be reminded that it is important to offer a decision based on balanced argument
repetition of the previous analysis, be applied to the case and make reference to why the alternative
option(s) was rejected.
General comments
Candidates had generally been well prepared for this examination and understood what was expected of
them. The context of VP, a large business operating fast-food restaurants, provided an accessible scenario
for candidates. Those who applied their answers to the context of VP boosted their marks much further. The
majority of candidates seemed to have time to complete the paper and attempted all questions.
they are clear about the extent of developed explanation that is required for each answer. Also, the question
should be read carefully to ensure answers are appropriate and clearly address the question asked, such as
answering from the point of view of a business rather than its employees. Many candidates showed good
knowledge and understanding of the full range of the syllabus that was assessed, but it was clear that certain
topics were not as well understood. The weakest understanding was of short- and long-term business
finance and economic influences on business.
Overall, the standard was good with very few weak scripts. Candidates often provided answers in context
which enabled access to application marks. However, candidates should make sure that different examples
of application are included in each section of (a) questions (not 1a on this paper) and the
conclusion/recommendation should also be applied to the case in (b) questions. A lack of analysis and
evaluation resulted in answers remaining in the lower-level mark band. Candidates should aim to consider
the consequences/implications/long term/short term/balance issues of the decisions to secure Level 2 or
Level 3 marks in the conclusion/recommendation.
© 2023
Question 1
(a) The majority of candidates could name and explain four barriers to communication for a business
and offered an appropriate explanation. The business operates 500 restaurants across Country Z
so one barrier would be caused by a long chain of command where messages could easily be
distorted as they passed through each level of the hierarchy. Many responses mentioned problems
with the sender or receiver, but the most common response focused on the barrier to
communication of poor technology. Internet failure, lack of computers and weak technology skills
amongst the workers were often discussed. Some responses offered only bullet points with
insufficient explanation to earn the full marks available.
(b) This question required candidates to consider two ways that VP can purchase its inventory, either
by head office or restaurant managers. In the discussion about the head office purchasing the
inventory, many candidates identified the benefit of bulk buying ingredients which would bring
advantages of purchasing economies of scale reducing unit costs. This would then increase profit
margins for VP. However, it might be necessary to store some ingredients in a warehouse because
not all branches would order the same amount at the same time. This kind of developed
explanation earned Level 2 reward. Simple statements which mentioned that head office could
retain responsibility and control for ordering ingredients for all 500 restaurants earned only Level 1
reward. Consideration of the restaurant managers ordering their own inventory often cited the
benefit of local suppliers being able to deliver much more quickly in response to changes in
demand. More importantly the food would be fresher which would enhance the reputation of VP’s
restaurants. However, the restaurant managers are already very busy and may not have the time
to order ingredients.
Question 2
(a) Knowledge of the topic of delegation was generally strong. Many candidates identified the
advantages of restaurant managers delegating tasks to assistant managers as an opportunity for
the manager to focus on other tasks and to give the assistant manager the chance to develop new
skills and gain experience in a managerial role. The disadvantages of delegation were well
considered. The restaurant manager would still carry the responsibility of the quality of food served
and the reputation of the restaurant, whilst lack of experience on the part of the assistant manager
might require extra training in customer service or food hygiene knowledge. There were four
application marks in this question, so it was possible to earn maximum marks by making four clear
points with reference to the context of VP Restaurants in each part of the response. Some weaker
responses offered repetition of points or answered in a generic style.
(b) Some candidates found this question quite challenging. Using the information from the case study,
they were asked to compare country A and country B as possible locations for new restaurants. In
Country A the higher average variable costs and higher wage rates would lead to higher costs
overall. Even though VP might charge $20 for each meal they would have to be mindful of the high
level of competition which might require an expensive marketing campaign. This would further
increase costs and reduce profit margins. The option of locating new restaurants in Country B
would allow VP to operate with much lower variable costs and wage rates. Since unemployment
was high it would likely be easier to recruit cooks and servers for the new restaurants. However,
high unemployment would make it less likely for customers to afford fast food because the average
disposable income would be quite low. This might keep sales below the expected level and
therefore restaurants might not be profitable. To earn Level 3 credit in the conclusion responses
needed to make a justified judgement about which option would be the ideal choice. The best
answers avoided repeating points made earlier in the response and related to why one location
was more suitable and the other less suitable for VP.
Question 3
(a) This was a well-answered question. Many candidates were able to outline the aim of gaining higher
profit or accessing new markets as a possible reason for expansion. The benefits of operating on a
large scale to reduce unit costs from bulk buying of food ingredients was often discussed by
candidates. Other strong responses explained that expansion would help VP gain a larger share of
the market which could strengthen the brand image and develop customer loyalty. To gain the
highest number of marks on this question additional explanation was required which also referred
© 2023
to the context of VP’s restaurants. Some responses briefly mentioned several reasons for
expansion instead of developing the explanation of just two points.
(b) This question required candidates to consider the benefits and limitations of VP entering a new
country as a joint venture or franchising. Not all responses showed good knowledge of these two
methods of operating a business. The discussion about operating as a joint venture often
mentioned the benefit of sharing ideas and using the partner’s knowledge of the local market
before the restaurants opened in the new country. This would make it less risky for VP and less
expensive in terms of market research. However, the joint venture might result in disagreements
and an unequal sharing of the workload and resources. The possibility of franchising the VP brand
would reduce the start-up costs of new restaurants for VP. The franchisee would make the bulk of
the investment in premises and kitchen equipment rather than VP. VP would benefit from the fees
paid by the franchisee and expansion of the restaurants could occur quite rapidly. Some weaker
candidates wrongly assumed that VP themselves would be franchisees and made contradictory
arguments in their response.
Question 4
(a) This question required candidates to explain, using an example, the reason why VP might need
short-term and long-term finance. Strong responses mentioned that VP would need short-term
finance to pay day-to-day expenses such as paying wages to more than 25, 000 restaurant
workers. This might require an overdraft from the bank to enable wages to be paid on time every
week. Long-term finance might be needed for the restaurants that needed to update ovens and
cooking equipment. This would be very expensive. A bank loan might be an appropriate method of
finance in this case so that VP could spread repayments over a few years. This topic did not seem
to be well-known by quite a large number of candidates. Some responses offered brief mention of
debts without explaining a specific reason for needing finance and, more importantly, not linking
their answer to VP itself.
(b) The discussion about the impact of three changes in the economy of Country Z resulted in some
varied responses. It was often mentioned that an increase in interest rates would not only increase
repayments on any loans taken by VP but also reduce consumer spending in the economy as a
whole. As a result, sales of fast-food at VP might fall and profits decrease. Many candidates argued
that there would be a significant impact on VP following the depreciation of the exchange rate in
Country Z. Imported food ingredients would cost much more, especially since 30 per cent of VP’s
ingredients were imported. It might mean that the business buys from local suppliers instead of
importing to keep their costs down, but the quality of the food may not be as good as the imported
food supplies. Many candidates suggested that introducing legal controls for listing ingredients in
its meals would not have a major impact on VP. They already reprint menus frequently when new
meals were introduced so listing would require just a little more time and attention to detail. Better
recommendations did more than offer repeated earlier points – they weighed up the impact, large
or small, which resulted from the economic changes. The best answers justified their decision with
reasoned argument about which would affect VP the most.
© 2023
BUSINESS STUDIES
Paper 0450/22
Case Study 22
Key messages
knowledge and understanding to an unseen case study or business scenario. This is apart from one (a)
question which will be generic. Applying answers to the case will ensure responses are appropriate for the
given situation.
case study. Specific marks are allocated throughout the mark scheme in both (a) and (b) questions for
application. In this particular case study, candidates were expected to refer to a start-up theatre
business. It is advisable for candidates to ask themselves about the size of the business, whether it is a
service business or a manufacturer, and the type of business organisation.
• Candidates should try to give a full explanation of both the positive and negative consequences of a
business decision when this is asked for. Responses require developed reasoning rather than simple
description; listed points generally only gain Level 1 whereas an explanation of a point could move the
answer to Level 2. A few well developed points will achieve higher marks than a long list of simple
statements.
Candidates should be reminded that it is important to offer a decision based on a balanced argument
repetition of the previous analysis, be applied to the case and make reference to why the alternative
option(s) was rejected.
General comments
Candidates had generally been well prepared for this examination and understood what was expected of
them. The context of ET, a start-up theatre business, provided an accessible scenario for candidates. Those
who applied their answers to the context of ET achieved higher marks. The majority of candidates seemed to
have time to complete the paper and attempted all questions.
they are clear about the extent of developed explanation that is required for each answer. The question
should be read carefully to ensure answers are appropriate and clearly address the question asked, such as
answering from the point of view of a business rather than its employees.
Many candidates showed good knowledge and understanding of the full range of the syllabus that was
assessed, but in some cases it was clear that certain topics were not as well understood. The weakest
understanding was of incorporated and unincorporated businesses, the objectives of a social enterprise, the
importance of preparing a cash-flow forecast and the roles of marketing.
Overall, the standard was good, with very few weak scripts, which was in line with previous years.
Candidates often provided answers in context which enabled them to access the application marks.
However, candidates should make sure that different examples of application are included in each section of
(a) questions, and that the conclusion/recommendation is also applied to the case in (b) questions. A lack of
analysis and evaluation resulted in answers remaining in the lower level mark band. Candidates should aim
to consider the consequences / implications / long-term / short-term / balance issues of the decisions to
secure Level 2 or Level 3 marks in the conclusion/recommendation.
© 2023
Question 1
(a) The majority of candidates were able to state at least three, if not four, characteristics of an
entrepreneur as well as explaining some of these characteristics. The most popular characteristics
were risk-taker, hard worker, effective communicator, creative and innovative. A few candidates
stated the characteristics but explained the characteristics using the same term in the explanation,
for example, being creative... an entrepreneur should be creative to be successful or a risk-taker…
that the entrepreneur would have to take risks. Some candidates attempted to apply their
explanations to ET even though this was a generic question. The weakest responses did not focus
on the personal attributes of the entrepreneur but on other factors for a successful business, such
as having sufficient capital and drawing up a business plan.
(b) This was a challenging question. Many candidates were able to identify the benefits and drawbacks
of partnerships and private limited companies. However, they did not always compare them with
each other but with sole traders or public limited companies. Some responses included mirror
arguments, such as listing ‘not a separate legal identity’ for partnerships and ‘separate legal
identity’ for private limited companies which could only be credited once. Weaker responses
confused limited and unlimited liability, and private limited companies with the public sector. The
concepts of personal liability, continuity, ease of setting up and privacy of information were well
understood and well explained in stronger responses. However, only the strongest candidates
could justify which option to choose and which one to reject without repeating earlier points.
Question 2
(a) This question was well answered with the majority of candidates identifying survival or profit as the
objective for ET and helping the community as the objective for Daycare. A large number of
candidates could explain the objectives well and in context. However, weaker responses did not
focus on one objective, or they focused on how the objective could be achieved rather than why ET
or Daycare would have that objective. An error made by some candidates in the first section about
ET’s objectives was to think that profit is acquired in order to pay expenses rather than being the
surplus after those expenses have been met. A minority of candidates got confused and thought
ET was running Daycare.
(b) This question differentiated candidates into those that could carry out calculations using the data
provided and those who could not. It should be emphasised to candidates that when the question
says justify your answer using suitable calculations then calculations should be included in the
answer. Answers need to go beyond comments such as makes a loss and give the actual figure.
Weaker responses gave a basic answer and included a comparison of the figures from Appendix 2,
such as the forecast revenue is higher for Option 2. Some answers simply said the revenue was
high, but it is not known whether this is true. Some candidates stated that Option 1 made a loss
and did not include the actual figure but did calculate the actual profit for Option 2. Stronger
candidates could calculate both the profit and loss figures. Some candidates also calculated the
profit margins for both options as well, although this was not necessary to make a valid
recommendation. The most popular recommendation was to choose Option 2 as it made a profit,
and this was argued to be important for a new business. A smaller number of candidates argued
that the low-income area may not yield many customers who could pay the higher price for Option
2 and therefore Option 1 should be chosen as the profit was only a forecast and may not be
achieved. A minority of weaker responses made assumptions about staff motivation or the quality
of the performance, which was based on their own opinions rather than the actual information
provided in the appendix.
Question 3
(a) This question was not well answered by the majority of candidates. The most common error was to
confuse cash flow with profit. Stronger candidates recognised the use of cash flow in planning,
decision-making, for obtaining a bank loan, ensuring there is cash for day-to-day activities and
avoiding a liquidity problem. For those candidates who were able to identify appropriate reasons,
most were not able to apply them to the case study and therefore did not gain the second mark for
each reason. A number of candidates discussed cash inflows and outflows separately. The terms
‘revenue, expenditure, finance, money’ were used instead of ‘inflows, outflows, cash, working
capital.’ It was important for candidates to recognise that this was a forecast not a report on the
© 2023
previous period. Another reason for weaker answers was the amount of repetition, for example
candidates gave multiple examples of expenses as cash outflows that could be monitored via the
cash-flow forecast.
(b) Many candidates could discuss the importance of identifying customers’ needs. Weaker responses
offered repetition of the question and often resulted in overlapping answers between the three parts
of the question. Better responses discussed in detail why identifying a specific target market was
important and also recognised the significance of providing suitable performances at a price that
would satisfy customers, particularly in a low-income area. Additionally, these candidates
established a connection between maintaining a strong reputation through excellent customer
service and gaining customer loyalty, ultimately leading to an increase in revenue and market
share. Many candidates did provide a justified conclusion with ‘identifying customers’ needs’ most
likely to be seen as the most important because the other two roles are based on this. A small
minority of candidates did not answer the question as they explained how the three roles could be
achieved rather than why they were important, for example, providing a description of primary
research methods to identify customers’ needs.
Question 4
(a) The majority of candidates answered this question well and discussed the leadership styles of
autocratic and democratic with laissez-faire being the least popular style. Many candidates then
went on to explain how each leadership style was used including its benefits and/or drawbacks.
The most common errors confused democratic leadership with delegation. Weaker responses
included explanations that were too vague, for example it was not always clear if an explanation
was for democratic or laissez-faire. Many answers were generic and hence application marks were
not gained so full marks were not achieved, even if the response had a good explanation of each
leadership style. Some weaker candidates mixed up the explanation of the leadership style, for
example they explained autocratic under the heading of democratic.
(b) Candidates were able to consider the three ethical issues. Strong responses often discussed:
better motivation and increased costs when paying fair wages; support for the local community and
reduced transport costs but then the quality of the costumes may be lower when buying from
suppliers in the local area; and gaining a better brand image increasing sales to ethically minded
consumers but increased costs for refreshments supplied by producers that do not damage the
environment. Responses from weaker candidates lacked development and so remained in the
Level 1 mark band. These included simple statements such as ‘it will be more expensive’ rather
than explaining why this was a disadvantage to the business by increasing costs which might lead
to higher prices and consequently lower sales. A small number of candidates thought that paying
fair wages meant paying the same amount to all employees and felt that most qualified employees
would be demotivated by this. Stronger responses demonstrated their understanding by outlining
the drawbacks of each change and offering a conclusive judgment on the change that was likely to
have the most significant impact on ET. This did not just repeat earlier points but justified the
choice by providing reasoning as to why this particular change would have a greater effect
compared to the other two changes.
© 2023
BUSINESS STUDIES
Paper 0450/23
Case study
Key messages
knowledge and understanding to an unseen case study or business scenario. This is apart from one of
the (a) questions which will be generic. Applying answers to the case will ensure responses are appropriate
for the given situation.
• To do well in this paper, candidates must make clear reference, or application, to the
accompanying case study. Specific marks are allocated throughout the mark scheme in both (a)
and (b) questions for application. In this particular case study, candidates were expected to refer to
a business that manufactures rugs. It is advisable for candidates to ask themselves about the size
of the business, what type of product it offers and the type of business organisation it is. This may
add to the quality of their answers.
• Candidates should try to give a full explanation of positive and negative consequences of a
business decision when this is asked for. Responses in (b) questions require developed reasoning
rather than simple description; listed points generally only gain Level 1 whereas an explanation of a
point could move the answer to Level 2.
Candidates should be reminded that it is important to offer a decision based on a balanced
argument earlier in the answer. A recommendation or conclusion should justify the option chosen,
without full repetition of the previous analysis, be applied to the case and compare the options by
making reference to why the alternative option(s) was rejected.
General comments
Candidates had been well prepared for this examination and understood what was expected of them. The
context of RR, a manufacturer of rugs, provided an accessible scenario for candidates. Those who applied
their answers to the context of RR boosted their marks much further.
they are clear about the extent of developed explanation that is required for each answer. Many candidates
showed good knowledge and understanding of the full range of the syllabus that was assessed, but in some
cases, it was clear that certain topics were not as well understood. The weakest area of understanding was
of the role of directors and managers in a company and possible problems experienced by a business as it
expands.
Overall, the performance of candidates was broadly comparable with previous years. Application marks were
often gained but candidates should make sure that different examples of application are included in each
section of an (a) question and the conclusion/recommendation should also be applied to the case in (b)
questions. Candidates should aim to consider the consequences/implications/long term/short term/balance
issues of the decisions to secure Level 2 or Level 3 marks in the conclusion/recommendation.
© 2023
Question 1
(a) This question proved accessible for the majority of candidates, with many being able to correctly
identify reasons such as producing in a lower cost country, producing nearer to the market,
increasing market share, avoiding barriers to entry and remaining competitive if other companies
were becoming multinationals. However, several candidates provided answers to a question about
how a company can become a multinational and not why a business might become a multinational.
(b) The majority of candidates listed rewardable answers, such as television advertisements will be seen
by a large number of potential customers or that billboards are lower cost than television. However,
many did not go on to explain why these points were an advantage or a disadvantage to the
business. This question was well applied with many candidates using the data provided in Appendix
1 to explain their points. To move the answer to higher levels the recommendation needed to justify
the choice of one method of promotion without repeating earlier points and explain why the
alternative methods were seen as less suitable.
Question 2
(a) Many candidates seemed able to identify problems with expansion, often explaining the likelihood
of diseconomies of scale such as lack of commitment or poor communication. There were fewer
candidates who could provide sufficient depth and explanation to their answers to score the highest
marks in this question. In some cases, marks were limited as candidates gave two explanations for
the same point, for example, two reasons why finance may be limited for the investment. Weaker
responses lost marks by identifying problems in a vague manner, such as stating that ‘it is
expensive’, without making it clear why expansion was expensive and why this meant it was a
problem. Answers were not often applied which limited the number of high scoring answers as both
reasons needed to be applied to the context.
(b) Most candidates could identify three suitable methods for communicating with employees. Popular
methods included telephone/mobile phones, email, letter, noticeboards, and face-to-face meetings.
However, there were often just lists of advantages and disadvantages of each method which
limited answers to Level 1, such as it is cheaper, quicker, allows feedback, rather than giving
explanations of why these were advantages and disadvantages with the method. Again, application
was often not evident and this resulted in answers not gaining the highest marks in the level.
Question 3
(a) This proved to be a difficult question for many candidates as they did not seem to be aware of the
roles of directors and mangers in a business. Weaker responses focused on the chain of command
provided in Appendix 2 and simply described the organisation chart, for example managers pass
information to the supervisors but report to the directors. The focus of the responsibility was not a
factor in many answers. The role of employees was the best answered responsibility as candidates
knew that their role was to manufacture the rugs and some recognised that supervisors had the
role of ensuring employees completed their work correctly. Only the strongest responses explained
each responsibility and also explained each one in the context of this business.
(b) Candidates generally seemed to find this question accessible, and application was more readily
included in responses. Weaker responses provided mirror arguments, such as there being
improved motivation when training is provided but poor motivation if technology is introduced and
the employees fear job losses. Weaker responses often used the same training argument for both
options and therefore restricted their marks. For example, training would be required for employees
to use the machinery which would be expensive and then stating that training is expensive for the
second option. Better responses moved into Level 3 by justifying which one of the methods would
be best to increase the productivity of employees and justifying why the alternative was rejected,
without repeating earlier points.
© 2023
Question 4
(a) The majority of candidates identified an opportunity and a threat to the business of using
ecommerce. A popular opportunity was that the ability to access a wider market enabled an
increase in sales, whilst the most popular threats included being expensive to set up and maintain
the website, and customers not being able to see and feel the rugs before buying so being put off.
Application was readily gained by answers having references to rugs and new markets in other
countries. To gain full marks many answers would have needed to explain in greater detail why it
was an opportunity or a threat for the business.
(b) There seemed to be a definite divide between candidates who could only make comparative
statements about the two sets of figures and those candidates who could calculate the gross profit,
profit, gross profit margin and profit margin. Better responses made use of the figures to undertake
appropriate calculations and then went on the make a clear judgement which accessed Level 3.
However, there were some candidates who knew how to carry out the calculations and could make
basic interpretations of an income statement but did not have the more detailed understanding of
the causes behind the changes in figures. This was reinforced by weaker answers which assumed
that an increase in the cost of sales was a benefit to the business. Better answers did recognise
that the cost of sales could have increased due to the additional raw material needed as there were
more sales (indicated by the higher sales revenue), but then did not see the significance of cost of
sales increasing at a faster rate than revenue, hence the fall in the gross profit margin. Answers
were usually well applied as even weaker responses made use of the figures in Appendix 3.
© 2023
™
Cambridge IGCSE

*9504537922*
Paper 1 Short Answer and Data Response October/November 2023

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
11_0450_11_2023_1.12
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1 Desmond wants to be a successful entrepreneur. He has decided to leave his office job to start up
a gardening business cutting grass and planting flowers. It will be an unincorporated business.
Desmond is aware that a new business is at greater risk of failure than an established business.
He has identified his business objectives for the first year. Desmond has calculated he will need
$750 for his start-up capital.
(a) Define ‘unincorporated business’.
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(b) Identify two objectives a new business might have.
Objective 1: .......................................................................................................................
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Objective 2: .......................................................................................................................
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(c) Identify four characteristics of a successful entrepreneur.
Characteristic 1: ................................................................................................................
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Characteristic 2: ................................................................................................................
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Characteristic 3: ................................................................................................................
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Characteristic 4: ................................................................................................................
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© UCLES 2023 11_0450_11_2023_1.12

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(d) Explain two reasons (other than lack of finance) why Desmond’s new business might be at
greater risk of failure than an established business.
Reason 1: .........................................................................................................................
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Explanation: ......................................................................................................................
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Reason 2: .........................................................................................................................
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Explanation: ......................................................................................................................
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(e) Do you think owner’s savings are the most suitable source of finance for a start-up business?
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© UCLES 2023 11_0450_11_2023_1.12 [Turn over

4
2 LCT manufactures cooking pots. It has 16 employees. As a small business LCT uses social media
as its method of advertising. The owner, Carole, knows having a good brand image is important.
She is analysing LCT’s break-even chart. This is shown in Fig. 2.1. Carole is considering possible
ways to lower LCT’s break-even level of output.
Break-even chart for LCT
12 000
10 000 total revenue
8000
costs / revenue total costs
6000
($)
4000
2000 fixed costs
0 100 200 300 400 500 600 700 800 900 1000
units
Fig. 2.1
(a) Identify two limitations of break-even analysis.
Limitation 1: ......................................................................................................................
...........................................................................................................................................
Limitation 2: ......................................................................................................................
........................................................................................................................................... [2]
(b) Calculate LCT’s profit if it sells 800 units. Show your working.
Working: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Final answer: .................................................................................................................... [2]
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5
(c) Outline two possible benefits to LCT of having a good brand image.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
(d) Explain two ways LCT might lower its break-even level of output.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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(e) Do you think social media is the best method of advertising for a small business to use? Justify
your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [6]
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3 ACP manufactures computers. Being ethical is important to ACP. The business employs 3000
workers in its factory. ACP imports 65% of its raw materials. As internal users of accounts, the
directors plan to analyse ACP’s financial performance using profitability ratios. The Finance Director
thinks making a profit is more important for a business than managing its cash flow.
(a) Identify two external users of accounts.
User 1: ..............................................................................................................................
...........................................................................................................................................
User 2: ..............................................................................................................................
........................................................................................................................................... [2]
(b) Identify two profitability ratios.
Ratio 1: .............................................................................................................................
...........................................................................................................................................
Ratio 2: .............................................................................................................................
........................................................................................................................................... [2]
(c) Outline two possible reasons why ACP imports its raw materials.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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(d) Explain one benefit and one limitation to ACP of being ethical.
Benefit: .............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limitation: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think making a profit is more important for a business than managing its cash flow?
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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4 MRN is a food retailer. It has 490 shops and 70 000 employees. MRN has announced plans to
close 80 of its shops. The Human Resources Director said: ‘20% of management jobs will be
removed. We want to encourage delegation. MRN will continue to follow legal controls over
employment.’ MRN’s directors know it is important that businesses respond to increased competition.
(a) Define ‘delegation’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two legal controls over employment.
Legal control 1: .................................................................................................................
...........................................................................................................................................
Legal control 2: .................................................................................................................
........................................................................................................................................... [2]
(c) Outline two functions of MRN’s shop managers.
Function 1: ........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Function 2: ........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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(d) Explain two factors MRN should consider when deciding which shops to close.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two ways a retail business could respond to increased competition. Which would be
the best way to use? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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...........................................................................................................................................
........................................................................................................................................... [6]
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Cambridge IGCSE

*6639094461*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
11_0450_12_2023_1.11
2
1 Paolo wants to start up a business making cakes. He plans to sell all of his products to a wholesaler.
Paolo knows the packaging for his products will be important. He has prepared some financial and
sales data. An extract from this data is shown in Table 1.1. Paolo is considering using crowdfunding
as a source of finance. He knows the business will also need working capital.
Table 1.1
Extract from Paolo’s financial and sales data
Average price per cake $6
Average cost per cake $4
Forecast average number of cake sales per day 50
(a) Define ‘working capital’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Calculate the average revenue per day. Show your working.
Working: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Final answer: .................................................................................................................... [2]
(c) Outline two reasons why packaging will be important for Paolo’s business.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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3
(d) Explain one advantage and one disadvantage to Paolo’s business of using crowdfunding as
a source of finance.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think selling to a wholesaler is the best channel of distribution for a start-up business
to use? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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2 TBX manufactures high-quality steel which is used to build railways. The method of production
used allows TBX to benefit from economies of scale. The business holds a high level of inventory
including iron ore. The Managing Director knows business activity could have an impact on the
environment and is considering ways the business can contribute to sustainable development.
(a) Identify two ways business activity could have an impact on the environment.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(b) Identify two ways a business could contribute to sustainable development.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(c) Outline two possible economies of scale TBX might benefit from.
Economy of scale 1: .........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Economy of scale 2: .........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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5
(d) Explain two possible problems for TBX of holding a high level of inventory.
Problem 1: ........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Problem 2: ........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think quality control is the best method for a manufacturing business to use to achieve
quality production? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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6
3 Country X has a mixed economy with both private and public sector organisations. These
organisations are involved in different sectors of economic activity. In the last 20 years the primary
sector has become less important to country X’s economy. A summary of the changes is shown in
Table 3.1. The government is planning to encourage multinational companies to set up factories
in country X.
Table 3.1
Economic sectors in country X as a percentage of GDP
Year Primary Secondary Tertiary
2000 60% 15% 25%
2020 20% 30% 50%
(a) Define ‘public sector’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Define ‘gross domestic product’ (GDP).
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(c) Identify four types of business organisation in the private sector.
Type 1: ..............................................................................................................................
...........................................................................................................................................
Type 2: ..............................................................................................................................
...........................................................................................................................................
Type 3: ..............................................................................................................................
...........................................................................................................................................
Type 4: ..............................................................................................................................
........................................................................................................................................... [4]
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7
(d) Using the data from Table 3.1, explain two possible reasons for the changing importance of
the primary sector in country X.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think the benefits to a country of having a multinational company located there are
always greater than the drawbacks? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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8
4 TFN is a travel business which sells holidays. It has 37 shops and 1000 employees. Last year
TFN’s profit increased to $46 million. The Managing Director knows that good customer service
has helped maintain customer loyalty. He said: ‘TFN’s managers use ideas from Herzberg’s
two-factor theory to help motivate employees. All employees are provided with off-the-job training
and each manager has a wide span of control.’
(a) Identify two advantages to a business of maintaining customer loyalty.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
........................................................................................................................................... [2]
(b) Identify two hygiene factors from Herzberg’s two-factor theory.
Hygiene factor 1: ..............................................................................................................
...........................................................................................................................................
Hygiene factor 2: ..............................................................................................................
........................................................................................................................................... [2]
(c) Outline two reasons why profit might be important to TFN.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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9
(d) Explain one advantage and one disadvantage to TFN of its managers having a wide span of
control.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think off-the-job training is the best method of training for a service sector business to
use? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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Cambridge IGCSE

*4057961550*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
11_0450_13_2023_1.11
2
1 DBR is a mining business. It is a large public limited company which operates in the primary sector.
DBR has 8 diamond mines and has 3000 employees. Specialisation is important. DBR has grown
quickly over the past 5 years. The Managing Director is worried about possible diseconomies of
scale as the business continues to grow. In 2022 DBR’s profit was $600 million.
(a) Identify two benefits to a business of specialisation.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
........................................................................................................................................... [2]
(b) Identify two ways a business can grow.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(c) Outline one possible advantage and one possible disadvantage of DBR being a public limited
company.
Advantage: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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3
(d) Explain two diseconomies of scale DBR might experience.
Diseconomy of scale 1: ....................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Diseconomy of scale 2: ....................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two ways the size of a primary sector business can be measured. Which do you think
is the best way? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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2 NPZ is a pizza restaurant. It has 35 part-time employees. The owner, Trent, is interested in different
methods to improve motivation as he thinks having well-motivated employees is important. Trent
is analysing NPZ’s financial statements. An extract is shown in Table 2.1. Trent is also considering
ways to increase NPZ’s profit.
Table 2.1
Extract from NPZ’s financial statements 2022 $000s
Revenue 600
Gross profit 240
Profit for the year 60
Current liabilities 75
Capital employed 300
(a) Define ‘current liabilities’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Calculate NPZ’s return on capital employed (ROCE). Show your working.
Working: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Final answer: .................................................................................................................... [2]
© UCLES 2023 11_0450_13_2023_1.11

5
(c) Outline two possible benefits to NPZ of having well-motivated employees.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
(d) Explain two methods NPZ could use to improve employee motivation.
Method 1: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Method 2: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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6
(e) Do you think reducing variable costs is the best way for a business to improve profit? Justify
your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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3 BKS is a manufacturer which makes a range of food products. Having a good brand image is
important. Most of BKS’s products are sold directly to large retailers. The business is always
developing new products. The Marketing Manager knows that the stage of the product life cycle
will influence BKS’s marketing decisions about promotion. She is also aware of the reasons why
the business should respond to environmental pressures.
(a) Define ‘brand image’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify one benefit and one limitation for a business of developing new products.
Benefit: .............................................................................................................................
...........................................................................................................................................
Limitation: .........................................................................................................................
........................................................................................................................................... [2]
(c) Outline two possible reasons why BKS might respond to environmental pressures.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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8
(d) Explain how BKS’s marketing decisions about promotion might be affected if a product is in
the following stages of the product life cycle.
Introduction stage: ............................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Maturity stage: ..................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think selling direct to retailers is the best channel of distribution for a manufacturer to
use? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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4 FXN manufactures mobile phones. It is a multinational company. FXN plans to build a new factory
in country Y. One reason for this is the decision by the government of country Y to introduce import
quotas. The Managing Director said: ‘The new factory will create 1200 jobs and help lower the level
of unemployment in country Y. FXN will start the recruitment process as soon as a decision has
been made about a suitable location for the new factory.’
(a) Define ‘import quota’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two advantages to a country of having lower levels of unemployment.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
........................................................................................................................................... [2]
(c) Identify four possible drawbacks for a country of having a multinational company located there.
Drawback 1: ......................................................................................................................
...........................................................................................................................................
Drawback 2: ......................................................................................................................
...........................................................................................................................................
Drawback 3: ......................................................................................................................
...........................................................................................................................................
Drawback 4: ......................................................................................................................
........................................................................................................................................... [4]
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10
(d) Explain two factors FXN should consider when deciding on a suitable location for the new
factory.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think a recruitment website, which advertises jobs, is the best method for a business
to use when recruiting a large number of employees? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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Cambridge IGCSE

Paper 2 Case Study October/November 2023
INFORMATION
*8739817308-I*
insert.
11_0450_21_2023_1.14
2
Protective Hats (PH)
PH is a large public limited company based in country Z. It has been operating successfully for 50 years.
PH produces a range of protective hats for employees working on construction sites, in factories or
mines. It has a reputation for producing high-quality products and sells its hats around the world.
PH is currently the market leader in country Z. To remain competitive PH regularly carries out market
research to find out if new products are needed. PH needs to ensure its market research data is accurate,
so that it can develop the best new protective hats.
PH’s only factory is in country Z. It has 100 production employees. They work on a flow production line
and carry out the same tasks every day. PH pays these employees the minimum wage and there have
been complaints about working conditions. Some of the employees are considering becoming members
of a trade union.
PH’s directors plan to expand the company by opening factories in other countries to produce protective
hats. They think there are many benefits for PH of becoming a multinational company. They are aware
that there is growing demand for protective hats in many developing countries where construction and
manufacturing industries are expected to continue to have strong growth in the next 10 years.
Appendix 1
Advertisement for PH’s products
PH’s protective hats will protect your employees when at work.
We supply many of the leading construction, manufacturing and mining companies across the world.
High quality is guaranteed.
PH’s hats can be ordered online from our website.
© UCLES 2023 11_0450_21_2023_1.14

3
Appendix 2
Email to PH’s Managing Director from PH’s Human Resources Director
To: Managing Director
From: Human Resources Director
Date: 1 October 2023
Re: Training
After reviewing our current training, I think we need to increase the training we provide to new employees.
Existing employees would also benefit from additional training as there have been issues with motivation.
I know there are plans to introduce new equipment into the flow production line. When is this likely to
happen?
Can we please meet to discuss these issues?
Appendix 3
PH’s financial data for 2021 and 2022
2021 2022
Revenue $100m $125m
Profit $20m $20m
Gross profit margin 60% 65%
Profit margin 20% 16%
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4
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Cambridge IGCSE

*8739817308*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
11_0450_21_2023_1.14
2
1 (a) Explain two advantages and two disadvantages of PH being a public limited company.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 1: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 2: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_21_2023_1.14

3
(b) Consider the following two ways PH could ensure quality production. Which way should PH
choose? Justify your answer.
• Quality control
• Quality assurance
Quality control: ..................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Quality assurance: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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4
2 (a) Explain two limitations and two benefits to a business of developing new products.
Limitation 1: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limitation 2: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
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5
(b) Consider the advantages and disadvantages of the following three methods PH uses to collect
market research data. Which method is most likely to ensure that accurate data is collected?
• A focus group made up of existing customers

• An online survey with only 5 questions
• Secondary research including government sources
A focus group made up of existing customers: ................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
An online survey with only 5 questions: ...........................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Secondary research including government sources: .......................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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6
3 (a) Explain two reasons why training is important to PH.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_21_2023_1.14

7
(b) Consider how the following three groups might use the financial data shown in Appendix 3.
Which group will find this data most useful? Justify your answer.
• PH’s employees
• PH’s shareholders
• Competitor considering taking over PH
PH’s employees: ...............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
PH’s shareholders: ...........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Competitor considering taking over PH: ...........................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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8
4 (a) Explain two benefits of PH's employees becoming members of a trade union.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_21_2023_1.14

9
(b) Consider three possible benefits for PH of becoming a multinational company. Which benefit
is likely to be the most important? Justify your answer.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 3: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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Cambridge IGCSE

INFORMATION
*6632990112-I*
insert.
11_0450_22_2023_1.13
2
Sports Safety Equipment (SSE)

SSE manufactures sports safety equipment in country Z. It is a public limited company which has been
successful for over 30 years. The main product SSE manufactures is safety helmets for different sports,
such as bicycle riding, cricket and skateboarding. SSE has one large factory making the safety helmets.
The factory uses flow production. The production workers each specialise in one task on the production
line. SSE’s raw materials are imported.
SSE sells its helmets in several other countries and is planning to expand into many more. It will need
to carry out market research before entering new markets in other countries. Each country has different
sports that are popular and the style of helmets varies from country to country.
SSE plans to build its own factories in its most important markets in other countries and will need to
choose a suitable source of finance. The Human Resources Director has decided to use internal
recruitment for the managers of the new factories. There will need to be effective communication between
the managers of the new factories and SSE’s head office in country Z.
Most of SSE’s sales in country Z are through sports equipment shops. Customers like to try on the
helmets to check they fit correctly. SSE currently sells its helmets in other countries through its website.
SSE is also increasing its product range. The latest new product being developed is a children’s cricket
helmet. A break-even chart for this new product is shown in Appendix 3.
Appendix 1
Extract from SSE’s website
If you want the best protection when playing sport then buy an SSE safety helmet!
We supply a wide range of safety helmets for you when playing sport.
Whatever the sport - SSE produces a helmet for you.
You can order directly from this website by entering your head measurements below.
Get the perfect fit for you!
© UCLES 2023 11_0450_22_2023_1.13

3
Appendix 2
Email from SSE’s Managing Director to SSE’s Finance Director
To: Finance Director
From: Managing Director
Date: 1 September 2023
Re: Demand for SSE’s products
Demand for SSE’s products in country Z is forecast to increase. Our government has imposed import
tariffs on safety helmets. We may be able to increase our prices.
The exchange rate in country Z is expected to fall. However, other countries have introduced import
quotas on safety helmets.
We will have to consider all the likely effects of these changes.
Appendix 3
Projected weekly break-even chart for SSE’s new children’s cricket helmet
50 000 total revenue
45 000 total costs
40 000
35 000
30 000
costs and
25 000
revenue $
20 000
15 000 fixed costs
10 000
5000
0
0 100 200 300 400 500 600 700 800 900 1000
output in units
The maximum output and sales for this product is 1000 units per week.
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4
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Cambridge IGCSE

*6632990112*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
11_0450_22_2023_1.13
2
1 (a) Explain two advantages of using specialisation when producing SSE’s products.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_22_2023_1.13

3
(b) Consider the advantages and disadvantages of the following two methods of market research
SSE could use when entering new markets in other countries. Which method of market research
should SSE use? Justify your answer.
• Primary market research
• Secondary market research
Primary market research: .................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Secondary market research: ............................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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4
2 (a) Explain four factors a business should consider when choosing which source of finance to
use for expansion.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 3: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 4: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
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5
(b) Consider the advantages and disadvantages of the following two options for SSE to distribute
its products in the new markets in other countries. Which option should SSE choose? Justify
your answer.
• Sell direct to customers using SSE’s website
• Sell to large sports retailers in other countries
Sell direct to customers using SSE’s website: ..................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Sell to large sports retailers in other countries: ................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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6
3 (a) Explain one advantage and one disadvantage to SSE of using internal recruitment for its new
managers.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_22_2023_1.13

7
(b) Consider how the following three barriers could make communication less effective between
SSE’s head office in country Z and its new factories in other countries. Which barrier would
be the easiest to overcome? Justify your choice.
• Problem with the medium used
• Problem with the sender
• Problem with the receiver
Problem with the medium used: .......................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Problem with the sender: ..................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Problem with the receiver: ................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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8
4 (a) Explain four ways the break-even chart in Appendix 3 might be helpful to SSE.
Way 1: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 3: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 4: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_22_2023_1.13

9
(b) Consider how each of the following three changes may affect SSE. Which change is likely to
have the greatest effect on SSE’s profit? Justify your answer.
• A depreciation in the currency of country Z
• An import tariff introduced on sports helmets imported into country Z
• Quotas introduced on sports helmets in countries where SSE sells its products
A depreciation in the currency of country Z: .....................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
An import tariff introduced on sports helmets imported into country Z: ............................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Quotas introduced on sports helmets in countries where SSE sells its products: ............
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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Cambridge IGCSE

INFORMATION
*2838839217-I*
insert.
11_0450_23_2023_1.17
2
Benjy’s Builders (BB)
Benjy is experienced in building houses. He worked for a building company for 15 years in country X.
Benjy has decided to start his own house-building business which will be called BB. His main objective
is to make a profit. He plans to invite his father and sister to invest in the business partnership. All three
of them will each invest $30 000 to start BB. However, Benjy thinks BB may need more investment as
it expands. Benjy will be the manager as his father and sister do not want to be involved in the running
of BB.
Benjy’s son has a physical disability. As there were not many houses suitable for his son’s needs, he
decided to build a specially designed house. This gave Benjy the idea to specialise in building houses
designed to meet the needs of people with disabilities. He does not know the demand for this type of
house and plans to carry out market research to estimate the size of the market. There are currently no
other businesses in country X which specialise in building houses for people with disabilities.
The houses will be designed for the individual needs of each customer. BB will use job production. The
houses will be built of timber and have metal roofs. The timber BB uses will be imported. Good-quality
materials will always be used so the houses are of the highest quality. Benjy needs to decide which
pricing method to use when selling the houses.
Benjy plans to employ 8 workers with specialist building skills and 2 unskilled workers, who will need to
be told what to do. He will need to decide which leadership style to use with his employees.
Benjy also has to decide which type of house to build first. He has two options. The first house to be
built will be used in advertising and will be available for potential customers to visit. House A is designed
for people with visual difficulties and House B is designed for people with physical difficulties. Appendix
2 contains financial information about these two options.
Appendix 1
Search results for the number of people with disabilities in country X
The population in country X is 50 million.
• 1 in 4 of the population has a disability.

• 10% have visual difficulties.
• 30% have physical difficulties and may have restrictions in their movement or are wheelchair users.
© UCLES 2023 11_0450_23_2023_1.17

3
Appendix 2
Financial information for the two options for BB's first house ($000s)
House A House B
for people with visual difficulties for people with physical difficulties
Timber costs 10 20
Labour costs 15 20
All other costs 38 60
Forecast selling price 70 110
Appendix 3
Newspaper article from Main News, September 2023
The exchange rate for the currency of country X has depreciated. This has resulted in a change in the
price of imported food and manufactured goods, such as wheelchairs. The depreciation of the exchange
rate will also have a big effect on spending, especially for people with disabilities who purchase imported
specialist equipment to help them.
The price of imported building materials, such as timber, may also change due to the depreciation in
the exchange rate.
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4
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Cambridge IGCSE

*2838839217*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
11_0450_23_2023_1.17
2
1 (a) Explain four differences between a partnership and a limited company.
Difference 1: .....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Difference 2: .....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Difference 3: .....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Difference 4: .....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_23_2023_1.17

3
(b) Consider three leadership styles that Benjy could use when managing BB. Which leadership
style should Benjy use? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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4
2 (a) Explain four methods of primary market research Benjy could use to find out if there is a
demand for BB’s services.
Method 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Method 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Method 3: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Method 4: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_23_2023_1.17

5
(b) Consider the following three pricing methods Benjy could use for BB’s products. Which pricing
method should be used? Justify your answer.
• Cost-plus
• Penetration
• Skimming
Cost-plus: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Penetration: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Skimming: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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6
3 (a) Explain one benefit and one limitation for BB of using job production.
Benefit: .............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limitation: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_23_2023_1.17

7
(b) Using Appendix 2 and other information, consider the two options for BB’s first house. Which
house should Benjy choose to build? Justify your answer.
House A: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
House B: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2023 11_0450_23_2023_1.17 [Turn over

8
4 (a) Using Appendix 3 and other information, explain two ways the depreciation in the exchange
rate may affect BB.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2023 11_0450_23_2023_1.17

9
(b) Consider the following three reasons why profit will be important to BB. Which reason is likely
to be the most important? Justify your answer.
• Reward for risk-taking

• Source of finance
• Way to measure the success of the business
Reward for risk-taking: ......................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Source of finance: .............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way to measure the success of the business: .................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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Cambridge IGCSE

*2111597861*
Paper 1 Short Answer and Data Response February/March 2024

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
03_0450_12_2024_1.14
2
1 TCH is a small bakery producing pastries and cakes. It operates in the secondary sector. The added
value of TCH’s products has increased since it opened 3 years ago. TCH uses non-financial methods
to motivate its 6 employees. TCH’s business objectives have changed since it started up. One of
its new objectives is to expand. Many businesses use external recruitment when they expand.
(a) Define ‘added value’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Define ‘secondary sector’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(c) Outline two reasons why TCH’s business objectives might have changed.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 03_0450_12_2024_1.14

3
(d) Explain two non-financial methods of motivation TCH could use.
Method 1: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Method 2: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two methods of external recruitment a business could use. Which is likely to be the
best method to use? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
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2 PLY manufactures hats in its factory in country X. The economy of country X is in a recession. PLY
sells its hats online to the mass market. It uses email to communicate with its customers. PLY uses
market research when making decisions. The Managing Director is considering ways for PLY to
become more environmentally friendly as she is aware of new legal controls over business activity.
She is also aware of the role of pressure groups.
(a) Identify two characteristics of a recession.
Characteristic 1: ................................................................................................................
...........................................................................................................................................
Characteristic 2: ................................................................................................................
........................................................................................................................................... [2]
(b) Define ‘pressure group’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(c) Outline two ways PLY could be affected by legal controls over business activity affecting the
environment.
Way 1: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 03_0450_12_2024_1.14

5
(d) Explain one advantage and one disadvantage of PLY using email to communicate with its
customers.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two reasons why a business uses market research. Which reason is likely to be the
most important? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [6]
© UCLES 2024 03_0450_12_2024_1.14 [Turn over

6
3 FR is a multinational company. It has hotels in 18 countries. FR wants to expand into a new market
and is planning to build another hotel. FR’s Marketing Director is considering how the market can
be segmented. FR’s Financial Director is considering which source of finance to use to fund the
expansion. He is also constructing a cash-flow forecast for the new hotel’s first year of trading.
(a) Identify one cash inflow and one cash outflow for a business.
Cash inflow: ......................................................................................................................
...........................................................................................................................................
Cash outflow: ....................................................................................................................
........................................................................................................................................... [2]
(b) Identify two factors which might affect the source of finance a business chooses to use.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
........................................................................................................................................... [2]
(c) Identify four ways a market can be segmented.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
Way 3: ...............................................................................................................................
...........................................................................................................................................
Way 4: ...............................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 03_0450_12_2024_1.14

7
(d) Explain two advantages to FR of being a multinational company.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two ways a cash-flow forecast could be used by a business. Which is likely to be the
most important way? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 03_0450_12_2024_1.14 [Turn over

8
4 Suliman owns a small business which sells t-shirts on its website. He operates as a sole trader.
Suliman is analysing data for his existing business. An extract from this data is shown in Table 4.1.
Suliman wants to open his first shop and needs to decide on a suitable location. He is considering
which type of sales promotion to use for the new shop.
Table 4.1
Extract from Suliman’s data for his existing business
Break-even output 500 t-shirts
Current sales 550 t-shirts
Selling price per t-shirt $3.99
Variable cost per t-shirt $1.99
(a) Define ‘break-even output’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Calculate the margin of safety. Show your working.
Working: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Final answer: .................................................................................................................... [2]
(c) Outline two methods of sales promotion Suliman could use for the new shop.
Method 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Method 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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9
(d) Explain two factors Suliman should consider when deciding on a suitable location for the new
shop.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think operating as a sole trader is the best type of organisation for a small business?
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [6]
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Cambridge IGCSE

INFORMATION
*3654570393-I*
insert.
03_0450_22_2024_1.16
2
Authentic Foods (AF)
Sam started up his own business, AF, 6 years ago in country X. He received government support. Sam
used to live in country A. When he moved to country X he could not find meals from his original country.
Sam decided to use recipes from country A to make meals in his kitchen and sell them to people in the
local area.
As demand increased Sam set up 5 street market stalls across Main City. Many customers buy his
meals because they are traditional and of high quality. There are no other businesses in country X that
produce these meals.
Two years ago Sam formed a business partnership with his brother. They used retained profit from the
business to invest in a factory to produce meals on a larger scale. AF now has 10 skilled production
employees to make the meals in the factory.
AF imports 90% of the ingredients for its meals from country A. AF could buy some of the ingredients
locally at a cheaper price but this may change the taste of the meals. Food production businesses in
country X usually buy their ingredients locally. However, most manufactured consumer products in
country X are imported. Changes in the exchange rate will affect the prices of all imported products.
AF’s factory has operated profitably since it opened. There is a high demand for AF’s meals especially
in Main City where there are many workers who used to live in country A. Sam wants to expand the
factory. He needs to decide whether to increase output by:
• investing in new technology at a cost of $50 000

• buying more of their existing equipment at a cost of $25 000.
As part of the expansion Sam is also considering introducing a new meal to the AF range. There are
two possible options to choose between. Financial details for each meal can be found in Appendix 3.
Appendix 1
Information about three legal controls being introduced in country X
• Increase in the minimum wage that must be paid to all employees - AF already pays above the
existing minimum wage.
• Additional health and safety regulations - this will require additional training and more safety
equipment in AF’s factory.
• Employees can only work a maximum of 50 hours each week - AF’s production employees currently
work 40 hours each week but often work up to 60 hours each week when AF is busy.
© UCLES 2024 03_0450_22_2024_1.16

3
Appendix 2
Email from Sam to his brother about the new meal
To: Sam’s brother
From: Sam
Date: 6 January 2024
There are 100 000 people from country A currently employed in country X. 60% of these employees
earn a high income.
Our traditional meals make customers feel like they are back in country A. This should ensure the market
segment we are aiming at will keep buying our food.
I suggest the following marketing mix for our new traditional meal:
• Price - using penetration pricing

• Place - selling to food retailers in Main City
• Advertising - using social media.
Do you think this is a suitable marketing mix for the new meal?
Appendix 3
Cost and revenue data for the two new meals AF could produce
Meal 1 Meal 2
Cost of ingredients per meal $4 $3
Additional fixed costs per month $6000 $2000
Price per meal $10 $5
Forecast sales per month 2000 5000
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Cambridge IGCSE

*3654570393*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
03_0450_22_2024_1.16
2
1 (a) Explain four reasons why governments support the start-up of new businesses.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 3: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 4: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
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3
(b) Using Appendix 1 and other information, consider how AF may be affected by the following
three changes in legal controls over employment issues in country X. Which legal control will
have the most effect on AF? Justify your answer.
• Increase in the legal minimum wage

• Additional health and safety regulations
• Employees can only work a maximum of 50 hours each week
Increase in the legal minimum wage: ...............................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Additional health and safety regulations: ..........................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Employees can only work a maximum of 50 hours each week: .......................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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2 (a) Explain two benefits to AF of segmenting its market.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 03_0450_22_2024_1.16

5
(b) Using Appendix 2 and other information, consider each of the following elements of the
marketing mix for AF’s new meal. Would this be a suitable marketing mix for the new meal?
• Price - using penetration pricing

• Place - selling to food retailers in Main City
• Advertising - using social media
Price - using penetration pricing: ......................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Place - selling to food retailers in Main City: ....................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advertising - using social media: ......................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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6
3 (a) Explain two ways an appreciation in the exchange rate of country X might affect AF.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 03_0450_22_2024_1.16

7
(b) Consider the following two ways AF could increase output in its factory. Which would be the
best way to use? Justify your answer.
• Investing in new technology

• Buying more of their existing equipment
Investing in new technology: ............................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Buying more of their existing equipment: .........................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 03_0450_22_2024_1.16 [Turn over

8
4 (a) Explain two advantages and two disadvantages for AF of using retained profit as a source of
finance for the investment in the factory.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 1: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 2: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 03_0450_22_2024_1.16

9
(b) Using Appendix 3 and other information, consider the advantages and disadvantages of the
two new meals AF could choose to produce. Which meal should AF choose? Justify your
answer using suitable calculations.
Meal 1: ..............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Meal 2: ..............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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Cambridge IGCSE

*4078717423*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_11_2024_1.9
2
1 FBM is a boat building business. It has 100 skilled employees. The Operations Director is concerned
that FBM holds a high level of inventory. She is also concerned that the business is starting to
experience diseconomies of scale. The Finance Director has been asked to analyse FBM’s cost
and output data. An extract is shown in Table 1.1.
Table 1.1
Extract from FBM’s cost and output data
Variable costs per unit $5000
Fixed costs per year $600 000
Number of boats made each year 300
(a) Define ‘diseconomies of scale’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two ways a business can use cost data to help make decisions.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(c) Identify four fixed costs a business might have.
Fixed cost 1: .....................................................................................................................
...........................................................................................................................................
Fixed cost 2: .....................................................................................................................
...........................................................................................................................................
Fixed cost 3: .....................................................................................................................
...........................................................................................................................................
Fixed cost 4: .....................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 06_0450_11_2024_1.9

3
(d) Explain one advantage and one disadvantage to FBM of holding a high level of inventory.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think customers have a more important role in the success of a business than its
employees? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [6]
© UCLES 2024 06_0450_11_2024_1.9 [Turn over

4
2 ADN is a food retailer. It has 5 shops and 300 full-time employees. All ADN’s employees receive
off-the-job training. ADN has a tall hierarchical structure. Managers have a narrow span of control
and all use an autocratic leadership style. ADN’s directors are planning to expand the business
and cannot decide whether it is better for a business to use internal growth or external growth.
(a) Define ‘span of control’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Define ‘autocratic leadership style’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(c) Outline two benefits to ADN of having full-time employees.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 06_0450_11_2024_1.9

5
(d) Explain one benefit and one limitation to ADN of using off-the-job training.
Benefit: .............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limitation: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think it is better for a business to use internal growth or external growth when planning
to expand? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 06_0450_11_2024_1.9 [Turn over

6
3 IDT manufactures clothes for the mass market. It is a multinational company with factories in 4
countries. IDT has short-term and long-term financial needs. The Finance Director is analysing
IDT’s statement of financial position. An extract is shown in Table 3.1. He has been asked to
calculate working capital and to explain how an increase in non-current liabilities might affect IDT.
Table 3.1
Extract from IDT’s statement of financial position ($ million)
2022 2023
Non-current liabilities 300 400
(a) Define ‘mass market’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Calculate IDT’s working capital in 2023.
Working: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Final answer: .................................................................................................................... [2]
(c) Outline one reason why IDT might need the following types of finance:
Short-term finance: ...........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Long-term finance: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
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7
(d) Explain two ways an increase in non-current liabilities might affect IDT.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two advantages to a business of being a multinational company. Which advantage
do you think is likely to be the most important? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 06_0450_11_2024_1.9 [Turn over

8
4 CFG is a social enterprise. It buys cocoa beans from local farmers and then uses the beans to
make chocolate. Being ethical is important to the business. CFG has developed a new chocolate
bar. The Marketing Manager plans to use skimming as its pricing method, and retailers as its
distribution channel for the new product. He knows there are many legal controls over marketing
that might affect a business.
(a) Define ‘social enterprise’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two ways legal controls over marketing might affect a business.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
........................................................................................................................................... [2]
(c) Outline one advantage and one disadvantage to CFG of using skimming as its pricing method.
Advantage: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 06_0450_11_2024_1.9

9
(d) Explain one advantage and one disadvantage to CFG of using retailers as its distribution
channel for the new product.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think being ethical will always lead to lower profit for a business? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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* 0019655495801 *
, ,
™
Cambridge IGCSE
¬Wz> 3mKmSE5FpW
¬8c=]mmjvK~Fs
¥5u5eE55¥U5e¥uU

*4325949627*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_12_2024_1.11
* 0019655495802 *
2
DO NOT WRITE IN THIS MARGIN

, ,
1 Nicky wants to be a successful entrepreneur. She plans to start up a travel business specialising
in walking holidays. Nicky will be operating in a niche market. She is preparing a business plan to
help with her decision-making. Nicky has been told government support is available for business
start-ups. She knows building customer relationships will be important.
(a) Identify two reasons why a government might support business start-ups.
Reason 1: .........................................................................................................................
...........................................................................................................................................

Reason 2: .........................................................................................................................
........................................................................................................................................... [2]
(b) Identify two ways a business can build customer relationships.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................

........................................................................................................................................... [2]
(c) Outline one benefit and one limitation to Nicky’s business of operating in a niche market.
Benefit: .............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................

Limitation: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 ĬÕú¾Ġ³íËíÓĉÅĂ¸ĜÈî× 06_0450_12_2024_1.11

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, ,
(d) Explain one way each of the following sections in the business plan might be helpful to Nicky.
Business objectives: .........................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Data about the market: .....................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two characteristics of a successful entrepreneur. Which characteristic is likely to be

the most important? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 Ĭ×ú¾Ġ³íËíÓĉÅĂ¸ĚÈî× 06_0450_12_2024_1.11 [Turn over

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* 0019655495804 *
4

, ,
2 GTB is a business which operates in the tertiary sector. It owns 5 cafés selling food and drinks.
The business uses social media as its method of promotion. The Finance Manager, Moeen, is
analysing GTB’s financial statements. An extract is shown in Table 2.1. He is considering ways to
improve GTB’s profit margin. Moeen knows there are other users that are interested in the accounts
of a business.
Table 2.1
Extract from GTB’s financial statements 2023
Revenue $600 000

Profit $150 000
Capital employed $750 000
Profit margin 25%
(a) Define ‘tertiary sector’.
...........................................................................................................................................
...........................................................................................................................................

...........................................................................................................................................
........................................................................................................................................... [2]
(b) Calculate GTB’s Return on Capital Employed (ROCE). Show your working.
Working: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Final answer: .................................................................................................................... [2]

(c) Outline two ways GTB could improve its profit margin.
Way 1: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 ĬÕú¾Ġ³íËíÓĉÅĂ¶ĜÈð× 06_0450_12_2024_1.11

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* 0019655495805 *
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, ,
(d) Explain two advantages to GTB of using social media as its method of promotion.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think banks are the main external users of the accounts of a business? Justify your
answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
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* 0019655495806 *
6

, ,
3 RBG is an oil company. It has operations in 6 countries. RBG has 2000 employees including 60
managers. Some of its managers use a laissez-faire leadership style. All of RBG’s internal
communication uses information technology (IT) based methods. The Managing Director knows
RBG’s business activities can create external costs and external benefits. She says: ‘Pressure
groups often try to influence business decisions.’
(a) Define ‘laissez-faire leadership style’.
...........................................................................................................................................

...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two roles of a manager.
Role 1: ..............................................................................................................................
...........................................................................................................................................

Role 2: ..............................................................................................................................
........................................................................................................................................... [2]
(c) Outline one external cost and one external benefit RBG’s business activities might create.
External cost: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................

...........................................................................................................................................
External benefit: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 ĬÙú¾Ġ³íËíÓĉÅĂ·ĚÅî× 06_0450_12_2024_1.11

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* 0019655495907 *
7
, ,
(d) Explain two methods of IT based communication RBG might use with its employees.
Method 1: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Method 2: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two ways a pressure group might try to influence business decisions. Which way do
you think is likely to be the most effective? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 ĬÛù¿Ġ³íËíÓĉÅĂ¸ĚÅî× 06_0450_12_2024_1.11 [Turn over

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ĥµÕÕõÕÅĕµµĕåĕµÅååÕ
* 0019655495908 *
8

, ,
4 DLT manufactures cups and plates in country X. Its factory uses flow production and has 75
employees. The Human Resources Director is aware that there are many legal controls over
employment. DLT exports 30% of its products to country Y where it benefits from lower rates of
taxation and no import quotas. DLT’s Managing Director is considering relocating its factory to
another part of country X to meet the increased demand for its exports.
(a) Define ‘import quota’.
...........................................................................................................................................
...........................................................................................................................................

...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two benefits to a business of lower rates of taxation.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................

........................................................................................................................................... [2]
(c) Identify four legal controls over employment.
Legal control 1: .................................................................................................................
...........................................................................................................................................
Legal control 2: .................................................................................................................
...........................................................................................................................................

Legal control 3: .................................................................................................................
...........................................................................................................................................
Legal control 4: .................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 ĬÙù¿Ġ³íËíÓĉÅĂ¶ĜÅð× 06_0450_12_2024_1.11

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* 0019655495909 *
9
, ,
(d) Explain one reason why DLT needs to consider each of the following factors when deciding
where to relocate in country X:
Suppliers: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Suitability of land: .............................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think the advantages for a manufacturing business of using flow production are greater
than the disadvantages? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 ĬÛù¿Ġ³íËíÓĉÅĂ¶ĚÅð× 06_0450_12_2024_1.11

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© UCLES 2024
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10
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06_0450_12_2024_1.11
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,
© UCLES 2024
* 0019655495911 *

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© UCLES 2024 ĬÙù¿Ġ³íËíÓĉÅĂµĜÇð× 06_0450_12_2024_1.11

Ĭ¸Ęä½âĘĘæăôþùĚąāăĂ
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™
Cambridge IGCSE

*8737071254*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_13_2024_1.12
2
1 WFT is a primary sector business which harvests timber (wood) from trees. The Operations Manager
knows there are many legal controls over business activity affecting the environment. WFT has 30
employees and uses a lot of technology to process the timber. The business is always considering
ways to increase added value. WFT often needs finance. An extract from WFT’s statement of
financial position is shown in Table 1.1.
Table 1.1
Extract from WFT’s statement of financial position at 30 April 2024 $
Non-current assets 600 000
Non-current liabilities 320 000
(a) Identify one non-current asset and one non-current liability.
Non-current asset: ............................................................................................................
...........................................................................................................................................
Non-current liability: ..........................................................................................................
........................................................................................................................................... [2]
(b) Calculate WFT’s current ratio in 2024. Show your working.
Working: ...........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Final answer: .................................................................................................................... [2]
© UCLES 2024 06_0450_13_2024_1.12

3
(c) Outline two ways legal controls over business activity affecting the environment might affect
WFT.
Way 1: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
(d) Explain two factors WFT should consider when deciding on a source of finance.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 06_0450_13_2024_1.12 [Turn over

4
(e) Explain two ways a business might increase added value. Which do you think is the best way?
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 06_0450_13_2024_1.12

5
2 Alana opened a restaurant in the city centre 5 years ago. The restaurant provides plant-based
meals using a range of vegetables. Alana uses primary market research to help identify changes
in consumer spending patterns. Market research can also be used to help segment a market. The
restaurant has 16 employees. Each employee is paid the legal minimum wage. In 2023 the business
made a profit of $80 000. Alana wants to know how an increase in interest rates might affect her
business.
(a) Define ‘profit’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two reasons why consumer spending patterns might change.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
........................................................................................................................................... [2]
(c) Outline two methods of primary market research Alana might use.
Method 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Method 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 06_0450_13_2024_1.12 [Turn over

6
(d) Explain two possible effects of an increase in interest rates on Alana’s business.
Effect 1: .............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Effect 2: .............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Do you think income is the best way for a business to segment a market? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 06_0450_13_2024_1.12

7
3 CQT is a public limited company. It manufactures paint using flow production. This method of
production allows CQT to benefit from economies of scale. CQT employs 50 workers. All CQT’s
raw materials are currently bought from local suppliers. However, the Operations Director knows
there are many reasons for globalisation. He has been asked to explain factors a business should
consider when deciding whether to relocate its factory to another country.
(a) Define ‘public limited company’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(b) Identify two reasons for globalisation.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
........................................................................................................................................... [2]
(c) Outline two economies of scale CQT might benefit from.
Economy of scale 1: .........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Economy of scale 2: .........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 06_0450_13_2024_1.12 [Turn over

8
(d) Explain two limitations for CQT of using flow production.
Limitation 1: ......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limitation 2: ......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two factors a business should consider when deciding whether to relocate its factory
to another country. Which factor is likely to be the most important? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 06_0450_13_2024_1.12

9
4 MTO is a bank. It provides loans and other financial services to 1 million customers. MTO has 70
branches and 2800 employees. Many of its employees work part-time. The business has a tall
organisational structure and its managers have a narrow span of control. Effective internal
communication is important. One of MTO’s objectives is growth and the Human Resources Director
has been asked to recruit a new manager. Information about applicant A is shown in Table 4.1.
Table 4.1
Information about applicant A
Qualifications University degree in Business
Skills Good at decision-making
18 months working at another business including

Experience
3 months as a manager
(a) Identify two advantages to a business of having part-time employees.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
........................................................................................................................................... [2]
(b) Define ‘organisational structure’.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [2]
(c) Identify four reasons why effective internal communication is important for a business.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Reason 3: .........................................................................................................................
...........................................................................................................................................
Reason 4: .........................................................................................................................
........................................................................................................................................... [4]
© UCLES 2024 06_0450_13_2024_1.12 [Turn over

10
(d) Using Table 4.1, explain two reasons why MTO should select applicant A as its new manager.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
(e) Explain two reasons why a business might want to grow. Which reason is likely to be the most
important? Justify your answer.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [6]
© UCLES 2024 06_0450_13_2024_1.12

11
BLANK PAGE
© UCLES 2024 06_0450_13_2024_1.12

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© UCLES 2024 06_0450_13_2024_1.12

™
Cambridge IGCSE

INFORMATION
*3921137726-I*
insert.
This document has 4 pages.
06_0450_21_2024_1.16
2
Exclusive Pottery (EP)
EP is a private limited company set up 40 years ago in country Y. It manufactures pottery products
including plates, cups and bowls. EP has a reputation for producing high-quality products. The Managing
Director is considering the best way to increase the added value of EP’s products by either increasing
prices or reducing raw material costs. Raw materials are currently purchased locally as imported raw
materials are of a lower-quality.
EP operates in a very competitive market. Many of EP’s competitors sell lower quality products at lower
prices. There are many substitutes for pottery products, including products made from plastic or bamboo.
Consumer spending patterns have been changing in country Y and this has affected EP’s sales.
EP currently advertises its pottery in newspapers and magazines. EP does not have a website and only
sells its products to retail shops in country Y. EP needs a new Marketing Manager and the Managing
Director thinks EP should employ someone from outside the business. The new Marketing Manager will
need to consider which of the following three ways EP could use to increase sales:
• Advertising using social media

• Emailing special offers to existing customers
• Setting up a website
The Managing Director wants to increase efficiency in the factory. She is considering either improving
labour skills or introducing more automation and technology. Both methods will need additional finance.
The Managing Director will consider different factors before choosing which source of finance to use.
Appendix 1
Advertisement for EP
We sell a wide range of plates, cups and bowls which are sold in all good retailers.
EP’s products are all high quality and made using materials from local suppliers.
© UCLES 2024 06_0450_21_2024_1.16

3
Appendix 2
Organisational chart for EP
Managing Director
Operations Director Marketing Director Finance Director
Production Manager Marketing Manager Finance Manager
Assistant Manager Assistant Manager Assistant Manager
Production supervisors (10) Marketing employees (7) Finance employees (7)
Production employees (50)
Total employees = 84
© UCLES 2024 06_0450_21_2024_1.16 [Turn over

4
Appendix 3
Email from Managing Director to Operations Director
To: Operations Director
Date: 5 March 2024
Re: Which product to stop making
We need to keep our costs low and therefore I suggest we stop making either Product A or Product B.
I have included some data in the table below to help us make the decision.
Demand is forecast to increase in 2024 for both products. Total costs are expected to remain unchanged.
Let me know which product you would choose to stop making and why.
Financial information for Product A and Product B for 2023
Product A Product B
Price per unit $10 $40
Sales volume 20 000 units 10 000 units
Total cost $140 000 $350 000
Profit $60 000 $50 000
Gross profit margin 50% 62.5%
Forecast increase in demand in

10% 20%
2024
© UCLES 2024 06_0450_21_2024_1.16

™
Cambridge IGCSE

*3921137726*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_21_2024_1.16
2
1 (a) Explain two drawbacks for EP of having a tall organisational structure.
Drawback 1: ......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Drawback 2: ......................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 06_0450_21_2024_1.16

3
(b) Consider the following two ways EP could use to increase added value. Which way should
EP use? Justify your answer.
• Increasing prices
• Reducing raw material costs
Increasing prices: .............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reducing raw material costs: ...........................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 06_0450_21_2024_1.16 [Turn over

4
2 (a) Explain two advantages and two disadvantages of using external recruitment to find EP’s new
manager.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 1: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 2: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 06_0450_21_2024_1.16

5
(b) Consider the following three ways EP could use to increase the sales of its products. Which
would be the best way for EP to use? Justify your answer.
• Advertising using social media

• Emailing special offers to existing customers
• Setting up a website
Advertising using social media: ........................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Emailing special offers to existing customers: ..................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Setting up a website: ........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 06_0450_21_2024_1.16 [Turn over

6
3 (a) Explain four reasons why consumer spending patterns for a product might change.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 3: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 4: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 06_0450_21_2024_1.16

7
(b) Consider the following two ways EP could increase efficiency in its factory. Which would be
the best way for EP to use? Justify your answer.
• Improving labour skills

• Introducing more automation and technology
Improving labour skills: .....................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Introducing more automation and technology: .................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 06_0450_21_2024_1.16 [Turn over

8
4 (a) Explain two factors EP should consider when choosing a source of finance.
Factor 1: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 06_0450_21_2024_1.16

9
(b) Using Appendix 3 and other information, consider the following two products EP makes. Which
product should EP stop making? Justify your answer.
• Product A
• Product B
Product A: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Product B: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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© UCLES 2024 06_0450_21_2024_1.16

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© UCLES 2024 06_0450_21_2024_1.16

™
Cambridge IGCSE

INFORMATION
*2430606254-I*
insert.
06_0450_22_2024_1.10
2
Jems Jewellery (JJ)
JJ is a large manufacturer of jewellery such as bracelets, earrings and rings. JJ was set up 25 years
ago in country X and is a public limited company. One of JJ’s objectives is for the business to expand
and another objective is to increase profit each year.
JJ manufactures all its jewellery in a factory in country X. All raw materials are purchased from local
suppliers. JJ has 60 full-time and 25 part-time employees to make the jewellery. Most of these employees
are skilled.
JJ’s jewellery is beautiful but not expensive and therefore affordable for many people. The business has
many competitors. JJ currently sells 70% of its products in country X through jewellery shops. The other
30% are sold using ecommerce and sold directly to customers in other countries. Demand for JJ’s
jewellery is continuing to increase.
JJ’s Marketing Manager is planning to launch a new item of jewellery in country X and needs to choose
between two products. Information on these two products is shown in Appendix 1. They will also need
to decide the most effective way to promote the new product in country X.
Appendix 1
Information to calculate break-even for Product A and Product B
Product A Product B
Type of product Bracelet Ring
Fixed cost for each product per week $50 000 $50 000
Selling price per product $50 $120
Variable cost per product $25 $40
Forecast sales per week 2500 750
Appendix 2
Newspaper article from Main City News in country X
After several years of economic growth the government is predicting a change in the economy this year.
Unemployment is forecast to increase from 3% to 6% by the end of the year. Increases in unemployment
are expected to continue for the next two years. Many businesses will be affected by this increase.
© UCLES 2024 06_0450_22_2024_1.10

3
Appendix 3
Email from Managing Director to Operations Director
To: Operations Director
Date: 1 May 2024
Pressure groups have identified two environmental issues when we manufacture our jewellery.
These two environmental issues are:
• We use coal for fuel in our factory which we know contributes to global warming. Other jewellery
manufacturers also use coal. We know the price of coal is increasing and will continue to increase in
the future. However, the government in country X is encouraging businesses to invest in solar panels
and is providing a 25% grant.
• The gem stones used in our jewellery come from local mines. We have been told that the land around
these mines cannot be returned to agricultural use after the mine is closed. However, pressure groups
have told us that we can buy gems from suppliers that use alternative ways of mining which do not
damage the environment. These mines are further away from our factory.
We need to respond to these issues or our sales and profit may be affected.
© UCLES 2024 06_0450_22_2024_1.10

4
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© UCLES 2024 06_0450_22_2024_1.10

* 0019655497901 *
, ,
™
Cambridge IGCSE
¬Wz> 3mEsaqM¦6v5pW
¬8]Ak¦Wouª_1©
¥eEU5u 5U¥e¥ E eU

*2430606254*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_22_2024_1.10
* 0019655497902 *
2

, ,
1 (a) Explain two reasons why setting business objectives is important to JJ.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................

...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................

...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]

© UCLES 2024 ĬÕú¾Ġ³íÅóáñÍĦ·ø·î× 06_0450_22_2024_1.10

Ĭ¸ĜÞÄßĕĄàĂăąėË³ÑċĂ
ĥõÕÕõĕÅÕĥåõåąąĥĥµÕ
* 0019655497903 *
3
, ,
(b) Using Appendix 1 and other information, consider the two new products JJ could produce.
Which product should JJ choose? Justify your answer using break-even calculations.
• Product A
• Product B
Product A: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Product B: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 Ĭ×ú¾Ġ³íÅóáñÍĦ·ö·î× 06_0450_22_2024_1.10 [Turn over

Ĭ¸ěÝÌéęôÙøîÄÃ³ħÑûĂ
ĥõåĕµõåµõÕååąĥąååÕ
* 0019655497904 *
4

, ,
2 (a) Explain two benefits and two limitations for JJ of employing part-time workers in its factory.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................

...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limitation 1: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................

...........................................................................................................................................
Limitation 2: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]

© UCLES 2024 ĬÕú¾Ġ³íÅóáñÍĦµø·ð× 06_0450_22_2024_1.10

Ĭ¸ěàÌãīõÞúõËġďÅÁăĂ
ĥÅõĕõõåĕĕõÕåÅĥååµÕ
* 0019655497905 *
5
, ,
(b) Consider the advantages and disadvantages of the following three ways JJ could promote its
new product in country X. Which way should JJ use? Justify your answer.
• Advertising in fashion magazines

• Handing out leaflets in Main City
• Point-of-sale displays in shops
Advertising in fashion magazines: ....................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Handing out leaflets in Main City: .....................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Point-of-sale displays in shops: ........................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 Ĭ×ú¾Ġ³íÅóáñÍĦµö·ð× 06_0450_22_2024_1.10 [Turn over

Ĭ¸ĜßÄåħąÛĀČþµħđÁóĂ
ĥÅąÕµĕÅõąąąåÅąÅĥåÕ
* 0019655497906 *
6

, ,
3 (a) Explain four reasons why profit is important to a business.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................

...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 3: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................

...........................................................................................................................................
Reason 4: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]

© UCLES 2024 ĬÙú¾Ġ³íÅóáñÍĦ¸ö¶î× 06_0450_22_2024_1.10

Ĭ¸ěß¿ßÿÿÓċù÷ÕďôĩăĂ
ĥĕåÕµµÅÕÅĥååąąĥåõÕ
* 0019655498007 *
7
, ,
(b) Consider the opportunities and threats of ecommerce for JJ. Which is likely to have the most
effect on JJ? Justify your answer.
Opportunities: ...................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Threats: ............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 ĬÛù¿Ġ³íÅóáñÍĦ·ö¶î× 06_0450_22_2024_1.10 [Turn over

Ĭ¸ěÝÄäðĩäĊąÄĞÏôÙûĂ
ĥåąĕµĕĥµåĥąåÅÅĥĥÅÕ
* 0019655498008 *
8

, ,
4 (a) Using Appendix 2 and other information, explain two ways JJ may be affected by the forecast
increase in unemployment in country X.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................

...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................

Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]

© UCLES 2024 ĬÙù¿Ġ³íÅóáñÍĦµø¶ð× 06_0450_22_2024_1.10

Ĭ¸ěàÄêþĠ×ĈþËÀóÒÉăĂ
ĥĕÕĕõĕĥĕÅÅõåąÅÅĥÕÕ
* 0019655498009 *
9
, ,
(b) Using Appendix 3 and other information, consider the following two environmental issues
when JJ manufactures its products. Which issue should JJ choose to solve first? Justify your
answer.
• Using coal for fuel in its factory

• Buying from suppliers that damage the environment
Using coal for fuel in its factory: ........................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Buying from suppliers that damage the environment: ......................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 ĬÛù¿Ġ³íÅóáñÍĦµö¶ð× 06_0450_22_2024_1.10

Ĭ¸ĜßÌàĂĐâòóþĜċĆÉóĂ
ĥĕåÕµõąõÕµååąåååÅÕ
,
© UCLES 2024
* 0019655498010 *

ĥÅµÕõĕÅĕĥõõĥąĥÅĥĥÕ
Ĭ¸ĚàÉìĆúÙÿąġäñ¶ñûĂ
ĬÙù¿Ġ³íÅóáñÍĦ¸ø¸î×
,
10
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06_0450_22_2024_1.10
,
© UCLES 2024
* 0019655498011 *

ĥÅÅĕµõåõõąåĥąąååõÕ
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,
11
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12

, ,
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© UCLES 2024 ĬÙù¿Ġ³íÅóáñÍĦ¶ø¸ð× 06_0450_22_2024_1.10

Ĭ¸ęÞÁèüÿÛ÷óßÖåÄġóĂ
ĥõĕĕõõåÕĕåÕĥÅąąåĥÕ
™
Cambridge IGCSE

INFORMATION
*5981200222-I*
insert.
06_0450_23_2024_1.14
2
Recycled Furniture (RF)
Santhosh is a skilled carpenter. He wants to be an entrepreneur and start up a small business called
RF. Santhosh will repair and recycle furniture which people no longer want, such as tables and chairs.
Santhosh will operate RF as a sole trader.
Santhosh has produced a business plan which includes the business objectives and a forecast break-even
chart for RF’s first month of trading. Santhosh has calculated he will need $5000 start-up capital for new
tools, to rent a workshop and for promotional activities. Santhosh wants to sell the recycled furniture to
RF’s target market of low-income families. It will be important to keep costs low so the furniture can be
sold at a low price.
Santhosh has already employed a Marketing Manager. He will also need to recruit 9 other employees;
3 skilled carpenters and 6 unskilled school leavers. Santhosh and the skilled carpenters will train the
unskilled school leavers to repair and recycle the furniture. At the start of each day Santhosh will
communicate with his employees to ensure they know their daily work tasks. Santhosh knows that having
a well-motivated workforce will be important to RF.
Appendix 1
Email from Santhosh to Marketing Manager
To: Marketing Manager
From: Santhosh
Date: 31 March 2024
I know that we will need to spend some of my start-up capital on promotional activities to raise awareness
of the new business and encourage customers to purchase the recycled furniture. I am considering the
following two methods of promotion:
• 10% discount on a customer’s first purchase of our recycled furniture

• free delivery on all products purchased - transported directly to customers’ homes.
We will need to consider the costs of these methods.
© UCLES 2024 06_0450_23_2024_1.14

3
Appendix 2
Forecast break-even chart for RF’s first month of trading
200
180 total revenue
160
140
total costs
120
costs and
100
revenue ($)
80
60
fixed costs
40
20
0
0 5 10 15 20
forecast sales (units)
Appendix 3
Extract from Main News
Country goes into a recession
Recent economic data shows that the economy is now in a recession. Unemployment is likely to increase.
However, businesses will find there is a difference in the availability of skilled and unskilled workers.
The recession is also likely to have an effect on the level of sales for many businesses.
© UCLES 2024 06_0450_23_2024_1.14

4
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© UCLES 2024 06_0450_23_2024_1.14

™
Cambridge IGCSE

*5981200222*

1 hour 30 minutes
INSTRUCTIONS
INFORMATION
06_0450_23_2024_1.14
2
1 (a) Explain four characteristics of a successful entrepreneur.
Characteristic 1: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Characteristic 2: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Characteristic 3: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Characteristic 4: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 06_0450_23_2024_1.14

3
(b) Using Appendix 1 and other information, consider the advantages and disadvantages to RF
of the following two methods of promotion. Which method should Santhosh use to attract
customers to RF? Justify your answer.
• 10% discount on a customer’s first purchase

• Free delivery on all products purchased
10% discount on a customer’s first purchase: ..................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Free delivery on all products purchased: .........................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 06_0450_23_2024_1.14 [Turn over

4
2 (a) Explain two business objectives Santhosh might have for RF.
Business objective 1: ........................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Business objective 2: ........................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 06_0450_23_2024_1.14

5
(b) Consider the advantages and disadvantages of the following three sources of finance Santhosh
could use when starting up RF. Which source should Santhosh use? Justify your answer.
• Owner’s savings
• Microfinance
• Crowdfunding
Owner’s savings: ..............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Microfinance: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Crowdfunding: ..................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 06_0450_23_2024_1.14 [Turn over

6
3 (a) Using Appendix 2 and other information, explain two benefits and two limitations to Santhosh
of using break-even analysis.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limitation 1: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Limitation 2: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 06_0450_23_2024_1.14

7
(b) Using Appendix 3 and other information, consider how the recession might affect RF’s forecast
sales and the availability of potential employees. Which is likely to have the most effect on
RF? Justify your answer.
RF’s forecast sales: ..........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Availability of potential employees for RF: ........................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2024 06_0450_23_2024_1.14 [Turn over

8
4 (a) Explain two benefits to RF of having a well-motivated workforce.
Benefit 1: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Benefit 2: ..........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [8]
© UCLES 2024 06_0450_23_2024_1.14

9
(b) Consider the following three methods Santhosh could use to communicate the daily work
tasks to his employees. Which method should he use? Justify your answer.
• Telephone calls
• Face-to-face meetings
• Text messages
Telephone calls: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Face-to-face meetings: .....................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Text messages: .................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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BUSINESS STUDIES 0450/12

Paper 1 Short Answer and Data Response February/March 2023

You must answer on the question paper.

No additional materials are needed.

This document has 12 pages. Any blank pages are indicated.

(a) Define ‘inflation’.

(b) Identify two ways technology could change production methods.

(c) Outline two ways HCB could become more ethical.

© UCLES 2023 03_0450_12_2023_1.13

© UCLES 2023 03_0450_12_2023_1.13 [Turn over

(a) Identify two possible causes of business failure.

Final answer: .................................................................................................................... [2]

© UCLES 2023 03_0450_12_2023_1.13

(c) Identify four reasons why businesses hold inventory.

© UCLES 2023 03_0450_12_2023_1.13 [Turn over

© UCLES 2023 03_0450_12_2023_1.13

3 AH is an insurance business. It operates in a competitive market. AH has 1000 employees including

(a) Identify two responsibilities of supervisors.

(b) Identify two methods of written communication.

(c) Outline two benefits to AH of taking over a competitor.

© UCLES 2023 03_0450_12_2023_1.13 [Turn over

© UCLES 2023 03_0450_12_2023_1.13

(b) Define ‘quality control’.

© UCLES 2023 03_0450_12_2023_1.13 [Turn over

(d) Explain two disadvantages to Viktor of operating as a sole trader.

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BUSINESS STUDIES 0450/22

This document has 4 pages. Any blank pages are indicated.

Romesh Woodpaints (RW)

Newspaper article from Main City News, January 2023

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The three possible locations for RW’s new factory

Existing factory (actual) Both factories (forecast)

Expenses including interest paid 6 12

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BUSINESS STUDIES 0450/22

Paper 2 Case Study February/March 2023

You must answer on the question paper.

You will need: Insert (enclosed)

This document has 12 pages. Any blank pages are indicated.

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• Changes in consumer tastes and fashions

Changes in consumer tastes and fashions: .....................................................................

Increase in consumer incomes: ........................................................................................

Decrease in the price of competitors’ products: ...............................................................

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2 (a) Explain two possible problems for RW of the business growing.

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3 (a) Explain four legal controls that may benefit employees.

Legal control 1: .................................................................................................................

Legal control 2: .................................................................................................................

Legal control 3: .................................................................................................................

Legal control 4: .................................................................................................................

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