Cambridge International Examinations

Cambridge International General Certificate of Secondary Education

* 0 5 2 6 0 4 7 4 0 4 *

BUSINESS STUDIES 0450/23

Paper 2 May/June 2014
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.

READ THESE INSTRUCTIONS FIRST

Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.

Answer all questions.

The Insert contains the case study.
The business described in this question paper is entirely fictitious.

At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.

The syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate.

This document consists of 11 printed pages, 1 blank page and 1 Insert.

DC (KN) 79725/2
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1 (a) Identify and explain two benefits to Selina of making most of the jewellery herself rather than
buying it from a manufacturer.

Benefit 1: ..................................................................................................................................

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Explanation: .............................................................................................................................

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Benefit 2: ..................................................................................................................................

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Explanation: .............................................................................................................................

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(b) Selina wants to increase sales of her jewellery. Consider the advantages and disadvantages
of each of the following ways of promoting the jewellery. Recommend which is the best way to
promote the jewellery. Justify your answer.

‘Buy one get one free’ on certain items of jewellery: ................................................................

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25% price reduction on all jewellery for one month: ................................................................

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Advert in national newspaper: .................................................................................................

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Recommendation: ....................................................................................................................

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2 (a) Identify two stakeholder groups of Selina’s business and explain why their different stakeholder
objectives for the business might conflict.

Stakeholder group 1: ................................................................................................................

Stakeholder group 2: ................................................................................................................

Explanation: .............................................................................................................................

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(b) As sales have grown, Selina now needs to employ someone to help her make jewellery.
Consider the advantages and disadvantages of the two people outlined in Appendix 3.
Recommend which person Selina should choose. Justify your answer.

Petra: .......................................................................................................................................

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Misha: ......................................................................................................................................

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Recommendation: ....................................................................................................................

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3 (a) Identify and explain two factors that affect how much stock of jewellery Selina’s shop should
have.

Factor 1: ...................................................................................................................................

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Explanation: .............................................................................................................................

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Factor 2: ...................................................................................................................................

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Explanation: .............................................................................................................................

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(b) Consider three factors Selina should think about when deciding whether to lease the new
machine. Recommend whether she should lease the new machine. Justify your answer.

Factor 1: ...................................................................................................................................

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Factor 2: ...................................................................................................................................

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Factor 3: ...................................................................................................................................

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Recommendation: ....................................................................................................................

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4 (a) (i) Refer to Appendix 1. Calculate the break-even sales per month for 2013.

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(ii) Identify and explain two benefits to Selina of calculating the break-even sales for the
shop.

Benefit 1: ..........................................................................................................................

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Explanation: ......................................................................................................................

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Benefit 2: ..........................................................................................................................

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Explanation: ......................................................................................................................

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(b) Selina wants to expand by opening another shop. Consider the advantages and disadvantages
to Selina of Shop 1 and Shop 2 (as outlined in the Insert). Recommend which shop she
should choose. Justify your answer.

Shop 1: ....................................................................................................................................

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Shop 2: ....................................................................................................................................

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Recommendation: ....................................................................................................................

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5 (a) Governments often want to encourage the growth of small businesses. Identify and explain
two reasons why the Government would want to help small businesses like Selina’s.

Reason 1: ................................................................................................................................

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Explanation: .............................................................................................................................

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

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Explanation: .............................................................................................................................

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(b) The Government of country X is increasing international trade with other countries. Consider
the likely advantages and disadvantages of increased international trade for small businesses
such as Selina’s. Do you think Selina’s business will benefit from increased international
trade? Justify your answer.

Advantages: .............................................................................................................................

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Disadvantages: ........................................................................................................................

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Conclusion: ..............................................................................................................................

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© UCLES 2014 0450/23/M/J/14