Tag: GCSE

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This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

1. Not correct – because penetration pricing would not be needed as there is less competition and demand is likely to be price inelastic.
2. Correct – A niche market is a small part of the overall market that has certain special characteristics or marketing strategies e.g. the combination of the 4Ps used to promote the product to the target market to achieve their goals. The Big Adventure Company only offers a small range of holidays and is not targeting the mass holiday market so focuses on specific types of holidays. Specialist magazines will be read by the target market and therefore provide the most effective means of communication.
3. Not correct – because special offers are unlikely to be used as the product is more important than the price.
4. Not correct – because the cost would be prohibitive for a small company and is more suitable for a mass market.

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This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

1. Not correct – because Bob is making one-off clothing so will not be concerned over how quickly he produces each piece of clothing.
2. Correct – Design Mix refers to the proportions in which the function, aesthetics and economic manufacture are combined in the overall design. As a designer, Bob will be more concerned with how the clothing looks (i.e. the aesthetic aspect of the design mix). Often catwalk designs sell because of what they look like rather than the function or price of the clothing.
3. Not correct – because economic manufacture is concerned with how cheaply a product can be made for and designer clothes have high price tags and one-off consumers are not mainly concerned with low prices.
4. Not correct – because designer clothes are not made for everyday wear (i.e. functional).

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This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

1. Not correct – expansion will increase potential capacity and therefore reduce capacity utilisation.
2. Correct – capacity utilisation is the percentage of a firm’s potential output that it is currently used with the formula that Capacity utilisation = (Current output X 100) / Maximum output, and where capacity which is not being fully utilised is 30%. Additional demand from Russia will increase the use of Staffordshire Steel’s production facilities because they will have to produce more steel. This increased output will therefore move Staffordshire Steel closer to its potential capacity.
3. Not correct – if they increases its prices, demand is likely to fall, leading to a fall in capacity utilisation.
4. Not correct – reducing productivity of workers will make them less competitive as the labour cost of producing steel will increase.

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This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

1. Not correct – advertising more should increase sales revenue as the service becomes better known/creates more demand/attracts more customers.
2. Correct – Definition of sales forecasting, e.g. the estimation of likely revenue/income in a period, given the trading conditions or defines sales revenue. Cutting costs is not a factor that increases demand as it is a supply factor. Cutting costs may lead to an increase in profit not an increase in sales.
3. Not correct – discounting the training fee could give an advantage over competitors and therefore lead to more orders/increase in sales volume.
4. Not correct – offering training on more days of the week allows more training to take place and therefore more customers to be catered for.

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This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

1. Not correct- because an Overdraft, although an external source of finance, is used as a flexible short-term method of finance, usually used for cash-flow problems and not to purchase an asset.
2. Correct – External source of finance e.g. is money that is provided from outside of the business / a commercial bank loan is when finance is borrowed from an external source such as bank and is repaid over a period of time with interest. A bank loan is a medium term source of finance and is therefore suitable for purchasing an asset such as a van. Interest and capital would be paid over a period of time and Colin would be able to plan for this.
3. Not correct – because retained profits are an internal source of finance.
4. Not correct – because Colin is a sole trader and therefore cannot issue share capital as this method of finance is only available for limited companies.
   

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