CAIE 2022-23

Senior School
Guided Study Worksheet – 1
Subject: Business Topic: Ch.1 Enterprise
Date: 20/06/2022 Maximum Marks:
Grade: AS Level Duration: 40 mins
Name: Roll no. :
I Multiple Choice Questions: ( Tick the correct answer)

1 When a business ‘creates or adds value’ it increases

a the difference between the cost of purchasing raw materials and the price the
finished goods are sold for
b the number of products it sells
c the difference between the cost of producing a product and the price for which it is sold
d the difference between the price of a product and the variable cost of its production

2 The machinery that is used by a business is an example of which factor of production?

a land
b labour
c capital
d enterprise

3 An entrepreneur is someone who:

a is an employee of a business enterprise

b takes the risk of starting and managing a business venture
c works for the government to provide public services
d just provides capital to a business start-up

4 Which one of the following is not likely characteristics of a successful entrepreneur?

a willing to take risks

b committed and self- motivated
c innovative
d risk averse

5 The most likely difficulty for new business start-ups is:

a obtaining finance
b identifying a market
c marketing
d finding suitable employees

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6 A dynamic business environment is

a factors external to the business are never constant

b new employees are being recruited

c a business is constantly changing its products

d factors external to the business are easy to forecast

7 When an entrepreneur decides to spend $1000 on a new computer to store details of

inventories, the opportunity cost is
a $1000
b everything else that could have been purchased with $1000
c the most needed factor that could have been bought
d the lost opportunity of buying a second-hand computer

8 All of the following will help ensure that there is sufficient working capital for a new
business except:
a constructing a cash-flow forecast
b injecting sufficient capital at the beginning of a business venture
c developing a good working relationship with the bank
d offering generous credit terms to customers

9 Business enterprise is claimed to bring all of the following benefits to an economy with
the expectation of:
a creation of employment
b a more dynamic and innovative economy
c economic growth
d a reduction in competition

10 The most important difference between social enterprises and profit seeking enterprises
a social enterprises never aim to make profit
b social enterprises will have objectives other than profit
c profit seeking businesses will always make profit
d social enterprises do not sell goods and services but profit seeking businesses do

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Case study:
Gan and Arisa plan to set up their own business making printed T-shirts. They know that they
will need resources before they can start production. Gan has savings of $3000 and Arisa,
who is an experienced shirt-maker, has $1000 to invest in the business.
1. Explain why Gan and Arisa can be termed ‘entrepreneurs’ [2]
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2. List three resources that Gan and Arisa will need to start the business. [3]
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3. Explain three decisions that Gan and Arisa will have to make before the business can start
trading. [6]
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4. Explain three qualities that Gan and Arisa should have in order to be successful
entrepreneurs. [6]
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5. A friend has offered them an old cloth printing machine for $500. If Gan and Arisa decide
to buy this, explain to them what opportunity cost might be. [3]
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6. Explain three reasons why Gan and Arisa’s business might fail. [6]
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7. If they decide to set up the business as a social enterprise, explain two objectives that
Gan and Arisa might have for business, other than profit. [4]
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