M/J 2022 P11

1. a) It is pricing products in such a way that the price is similar to or lower than competitors’
pricing.

b) It is the amount of money allocated for marketing purposes such as research and
development.

c) 1. High competition in the market could create a big threat for Pamela’s business

2. As she sells toys and sweets, people would like to check out the toys or taste the sweets before
buying them

d) Method 1: Providing a diversification of items that isn’t available in the country/market

Explanation: Bringing variations of sweets or toys which aren’t available in her market will attract
new customers and keep old customers interested in her business as they might be interested in a
change from the regular widely available variations of the product

Method 2: Giving out gifts and having regular promotions

Explanation: Giving customers a gift such as a free toy or candy with purchases above a certain amount
can motivate them to buy more products to get this gift which increases revenue and profits for the
business, having regular promotions such as discounts or buy 2 get 1 free will also motivate
people to buy more products as they are cheaper than usual

e) Risk taking is one of the most important characteristics of an entrepreneur as it involves being
brave and investing amounts of money into a project that might not be successful in the end,
being creative on the other hand required a person to come up with a product that might’ve
never been seen before or a new variation of an existing product, this is one of the main things
that attracts customers to products

2. a) It is a type of company which sells its shares to the general public

b) 18000-14000=4000 beds

c) way 1: Inflation will increase production and labour costs for CTF

Way 2: it will cause them to have to increase prices of their beds which might make sales
plummet depending on the price elasticity of demand

d) Adv. 1: Different varieties

Exp. 1: Using batch production allows CTF to produce different variations of the beds which might
increase their sales as it appeals to a wider market

Adv. 2: Non-repetitive tasks for workers

Exp. 2: As the beds are produced in batches there could be different variations which provides
motivation for workers to work as they are working on something different.
 e) Environmental pressures caused by the public could be due increased pollution from
harmful production practices, if businesses don’t respond to these pressures customers could
start to boycott the business’ products till they change their production methods which could
cause the firm to go into major losses if they don’t respond fast enough. Sometimes though the
cost of changing the methods of production could be more expensive and cause more losses
than if they just ignore the complaints till people forget about them.

3. a) It is the amount of money invested into the business by the shareholders

b) 1. Income Statement

2. Statement of financial position

c) Overdraft: current liability

Trade receivables: current asset

Trade payables: current liability

Cash in bank: current asset

d) Shareholders: Checking profitability

Explanation: As shareholders are investors in the business they need to know if they are going to
be profitable while investing or if they’re going to lose money in the business

Suppliers: Trade credit

Explanation: Businesses might not have enough cash to buy raw materials from suppliers directly
so they might need to postpone the payment and the suppliers need to check if the business is
bringing in enough revenue and profit to be able to pay for the goods later or if they will pay later
than promised which doesn’t make them trustworthy enough to give them products on
credit again

e) Labour is one of the most important factors of production to consider when relocating a but
that doesn’t mean it can't be replaced, some production stages might not need non-skilled labour
instead they can be replaced with machines which will shift the production to capital intensive and
make the production costs cheaper in the long-run which will allow the business to decrease
selling prices which, depending on the price elasticity of the bags they sell, could increase
revenue and profits tremendously, as of the skilled labour which may not be replaceable
with machinery, they will need to either consider relocating the workers which is costly but will
allow them to relocate to almost anywhere they would like, another option would be providing
transportation for them through the business itself which will allow them to also relocate
anywhere they want and will be significantly cheaper than relocating the workers. In conclusion, the
better option would be to provide transportation for workers and locating the factory in an area with
cheap land so they could decrease costs as much as possible

4. a) 1. Providing merit goods which private businesses aren't willing to produce due to them notbeing
profitable

2. Provide service to everyone

b) It is the list in which people who control or work in the business are ordered in from highest to
lowest in order of authority

c) 1. Providing more interesting and diverse work for the employees in the hospital would make them
more motivated to work

2. Increasing chances of promotion, as there is a tall organization structure, will make

employees work much harder

d) Messages lost: Change the way of communication

Explanation: Changing the way of communication from verbal to written methods such as
emails, notes or letters will allow the messages to not get lost easily when sent from higher
management to the doctors or nurses

Use of jargon: Using simple language

Explanation: Simplifying the words used when speaking through phone or email to nurses or
doctors would make it easier for them to understand what is being said and will not confuse
them when doing their tasks

e) Skilled employees are sometimes difficult to find internally in a business especially hospitals,
this means that, although it might be more expensive, a business has to turn to external
recruitment, hiring skilled workers from outside a business can be a challenging and time
consuming task to manage but it has its advantages, bringing in skilled labour from outside the
firm means that they might have good experience and they might bring in new strategies
through their experience which might help the hospital improve its management and increase
productivity, on the other side of the spectrum, promoting existing employees will be way
cheaper and better as they have existing experience working in the business, but this has
multiple drawbacks including jealousy from co-workers as they might think they deserve the
promotion instead, other than that, the promotion will create a new empty spot that might
need to be filled with a worker which restarts the whole dilemma of searching for workers or
promoting existing ones. In conclusion, the hospital should only use external recruitment if
they don’t have existing workers that are qualified enough or if they want new strategies from
outside the business.
M/J 2022 P21

1. a) Reason 1: Supporting new start-ups such as Yasin’s bakery helps provide new employment
opportunities for unemployed bakers or other types of workers in the area and decrease the
amount of unemployment benefits that the government has to pay

Reason 2: New start-up business can increase competition if they provide products or services
that are better than the competitors, this will decrease selling prices and increase product
quality

Reason 3: New businesses might be planning to provide new products or new variants of
existing products, this will give consumers a wider variety of products to choose from

Reason 4: Start-up companies might have aims to grow into large, successful and well known
firms, this will help the economic growth of the country while increasing GDP, this makes it
worth supporting those small businesses

b)

2. a)