MERTON COLLEGE

SUBJECT: BUSINESS STUDIES PAPER 1 GRADE 10 DURATION: 1HR 15

TOTAL MARKS: 50

ANSWER ALL QUESTIONS:

QUESTION 1: CASE STUDY

Your friend, Amin, is an expert computer engineer. He currently works for a large computer. He
thinks that he could run his own successful business. He has no experience of running a business.
He has very saving to invest into a business.

Amin has a rich uncle who knows nothing about computers. He is a retired businessman. He is
friendly but rather bossy as he always thinks he knows best.

Amin asks for your advice about whether he should set up his own business and what form of
organization he should choose.

a. Explain 2 advantages and 2 disadvantages to Amin of running his own business rather
than working for the computer manufacturer. [4]
b. Do you think setting up a sole trader business is always best? Explain your answer. [4]
c. His uncle would like to become his partner in the business if Amin decides to go ahead.
Explain 1 advantage and 2 disadvantages to Amin of forming a partnership. [3]
d. In your own words, explain what is meant by a business. [2]
e. List 2 objectives of a business. [2]
Total mark 15

Question 2:
Two business owners cannot agree on which of them owns the larger business. One owner who
runs a printing firm using the latest expensive equipment, considers his firm to be larger. The
other owner who has a fruit farm that uses only manual labor to pick the fruit considers his
business to be larger.

a. Which forms of measuring business size does each owner seem to be using? [2]
b. Which method of measuring business would you advice the 2 owners to use and why? [4]
c. List 3 groups that are interested in comparing the size of business and why? [6]
d. Explain the difference between primary and secondary sector. [2]
e. Give an example of tertiary activity. [1]
Total mark 15
 Question 3:
There is no general agreement on whether “good managers are born” or “good managers are
made by training”. Explain 5 important qualities of a good manager.

Total mark 10

Question 4:
a. Explain, with the aid of an example, what is term opportunity cost means to a
consumer. [3]
b. Explain what is meant by division of labor. [3]
c. List 4 factors of production and briefly explain why each is necessary for
production to take place. [4]

Total Mark 10