WorksheetsEdexcel Business GCSE Paper 1
Total questions: 61
Worksheet time: 31mins
Which one of the following is a method of segmenting a market?
Age
Advertising method
Profit
Tax rate
What does it mean if a business is insolvent?
It cannot pay its debts and may be forced to stop trading.
It obtains goods from suppliers and pays for them later on.
It earns more revenue than its total costs.
It merges with another business to form one company.
Which of the following is a disadvantage of setting up a business as a partnership?
Profits have to be shared between the partners.
Partners have limited liability for business debts.
Decision-making is much faster with more owners.
Each partner has complete control over the business.
Which one of the following is a source of secondary market research information?
Conducting a survey of your customers
Holding a focus group with potential customers
Reading industry market reports for data
Observing customers in your store
Which one of the following issues is covered by employment law?
Preventing discrimination in hiring and promotion
Ensuring products meet quality and safety standards
Allowing customers to return faulty goods for a refund
Setting the rate of taxation a business must pay
A small business has fixed costs of £7,500 and produces 5,000 units at a variable cost of £2 per unit. What are the total costs at this output level?
£10,000
£12,500
£17,500
£25,000
If a business’s break-even output is 5,000 units and it actually sold 6,800 units, what is its margin of safety?
(a)
Why might using retained profit to finance a business expansion be a problem for a small business?
The business may not have enough retained profit to fully fund the expansion.
Using retained profit increases the business’s debts and liabilities.
Retained profit must be repaid with interest over time.
Using retained profit forces the business to sell shares.
What is an advantage of starting a new business as a franchisee (buying a franchise) rather than starting independently?
Trading under an established brand that customers already recognize
Complete freedom to change the business model at any time
No need to share any profits with another party
Absolutely no risk of business failure in a franchise
Which one of the following is a financial aim for many new businesses?
Survival
Independence
Customer satisfaction
Good reputation in the community
At the break-even point of a business, which of the following is true?
Total revenue equals total costs.
Total revenue is greater than total costs.
Total costs are zero.
The business is making a loss.
How is profit calculated in a business?
Profit = total revenue – total costs
Profit = total revenue + total costs
Profit = total costs – total revenue
Profit = total revenue × total costs
If unemployment in the economy rises, what is a likely impact on a small retail business?
Consumers have less disposable income, so the business’s sales may decrease.
The business’s wage costs will automatically rise as unemployment rises.
Demand for luxury goods sold by the business will increase.
Banks will offer more low-interest loans to the business.
How can building a strong brand benefit a small business?
It can create customer loyalty, leading to repeat purchases.
It completely eliminates competition in the market.
It allows the business to ignore customer needs.
It automatically reduces the business’s overhead costs.
Which of the following is a risk an entrepreneur takes when starting a new business?
The possibility of losing the money they invested (financial loss)
Having unlimited access to finance at all times
Being guaranteed to work fewer hours than in a regular job
Facing no competition in the market whatsoever
Why might a small business use social media as a marketing tool?
It is a low-cost way to reach a large number of potential customers.
It prevents customers from leaving any public feedback.
One social media post is enough to ensure viral success.
It guarantees that sales will increase without fail.
Which one of the following is an example of a cash inflow for a business?
Money received from selling products to customers
Paying wages to employees
Purchasing new equipment for the office
Paying the monthly rent for the shop
How can creating a detailed business plan help a new business owner?
It can help convince potential investors or banks to provide funding.
It guarantees that the business will never make a loss.
It ensures the business will have no competitors.
It eliminates the need to conduct market research.
Which of the following is a fixed cost for a small business (e.g. a local gym)?
The monthly rent for the business premises
Costs of raw materials for products, which vary with sales
Packaging costs for each product sold
Utility costs that rise as more equipment is used
Which factor is likely to influence where an entrepreneur decides to locate their new shop?
The cost of renting or purchasing premises in the area
The design of the company’s logo and branding
What is a potential drawback of relying on a bank overdraft for business funding?
Interest is charged on the amount borrowed, which can be expensive.
The business must give up some ownership shares when using an overdraft.
An overdraft can only be used for long-term expansion projects.
It takes many months to arrange an overdraft with a bank.
Which type of business organization offers its owners limited liability for business debts?
A private limited company (Ltd)
A sole trader business
A traditional partnership
A small family business run as a sole proprietorship
Which of the following is a source of external finance for a new business?
A bank loan
The owner's personal savings
Selling existing inventory to raise cash
Retained profit from last year
What is trade credit?
An arrangement to buy goods from suppliers now and pay for them later
A short-term bank loan provided to a trading business
A type of credit card used by traders and businesses
A discount given to customers who pay in cash immediately
When two businesses join together to form one larger business, it is known as a:
Merger
Franchise
Takeover
Partnership
Which of the following is a common characteristic of successful entrepreneurs?
Willingness to take calculated risks
Preference for avoiding change or innovation
Desire for a guaranteed fixed income above all else
Tendency to give up easily when faced with setbacks
Which of the following is NOT one of the four Ps of the marketing mix?
Product
Price
Promotion
People
What is one advantage of operating as a sole trader?
The owner keeps all of the profits from the business.
The owner has limited liability for business debts.
The business can sell shares to raise capital easily.
The workload can be shared among several partners.
What is a disadvantage for a business owner of joining a franchise?
Having to pay ongoing fees or royalties to the franchisor
Complete freedom to change the product and branding
Immediate brand recognition and established reputation
Training and support provided by the franchisor
If interest rates rise, how could this affect a small business with an outstanding bank loan?
The business will have to pay higher interest on its loan, increasing costs.
Consumers will have more money to spend, boosting the business’s sales.
New loans will become cheaper for the business to obtain.
The cost of existing loans will remain unchanged.
What is a possible impact on an existing small business if a new competitor opens nearby?
The business may lose some customers to the new competitor.
The business will be able to raise its prices significantly.
The business’s sales will automatically double.
The business will no longer need to advertise its products.
Which of the following is an internal stakeholder of a business?
Employees of the business
The company’s suppliers
The local community around the business
The government
Which action could help a small business add value to its product or service?
Developing a strong brand image that customers trust
Using cheaper materials that lower the product’s quality
How is sales revenue calculated?
Selling price per unit × number of units sold
Selling price per unit + number of units sold
Profit per unit × number of units sold
Total costs × number of units produced
Which statement best describes a product’s unique selling point (USP)?
A feature that makes the product stand out from its competitors
A method of production that eliminates all costs
A legal protection for a brand name or logo
A strategy of pricing products lower than all competitors
Which factor could create an opportunity for a new business idea?
The emergence of a new technology that changes the market
A market in which customer needs are already fully satisfied
Strict regulations that discourage any innovation
An economic recession that reduces consumer spending
What is a potential reward of successfully starting your own business?
The chance to earn profits and increase your personal income
A guaranteed steady income with no risk of failure
Working significantly fewer hours than in other jobs
Having no competition in the market at all
Why do new businesses conduct market research?
To understand customers’ needs and identify market gaps before launching
To guarantee that the business will make an immediate profit
To avoid ever having to create a business plan
To ensure no competitors will enter the market
What is the main purpose of most business enterprises in the private sector?
To produce goods or services that satisfy customer needs at a profit
To eliminate all competition in the market
To charge the highest prices possible, regardless of customer needs
To avoid taking any risks or making any changes
What does market share refer to?
The percentage of total sales in a market held by one business
The number of competitors operating in the market
A group of customers with similar preferences in a market
The total sales revenue of the entire market
What does it mean if a business owner has unlimited liability?
They are personally responsible for all the business’s debts if it fails.
They can only lose the money they originally invested in the business.
The business is a separate legal entity from the owner.
They cannot be sued for any business-related matters.
Added value in a product is best defined as:
The difference between the selling price and the cost of the inputs (materials, components, etc.)
The profit a business makes after all expenses have been paid
The total revenue generated by sales of the product
The increase in cost of raw materials over time
Which stakeholder group is most likely to be interested primarily in a business’s profit performance?
The owners or shareholders of the business
The employees working for the business
The customers who buy the business’s products
The local community around the business
If the rate of inflation (general price levels) rises significantly, how might this affect a small business?
The business’s costs may increase as suppliers raise their prices.
The purchasing power of consumers’ money increases.
The business will pay lower prices for wages and materials.
Customers can buy more with the same amount of money.
Which of the following best describes interest in a business context?
The cost of borrowing money, usually expressed as a percentage of the amount borrowed
A buy-now-pay-later credit arrangement with suppliers
The profit made on each product a business sells
The share of the market that one company controls
A sole trader business is one that:
Is owned and run by a single individual
Has limited liability and many shareholders
Is part of a large franchise chain
Is owned by two or more partners
Which of the following is an advantage of operating as a partnership?
Partners can bring different skills and share decision-making.
Partners have no personal liability for business debts.
Partners do not have to share the business’s profits.
Partners face no risks when the business is in trouble.
Which of the following is a right that consumers have under consumer protection law?
The right to a refund or repair if a product they purchase is faulty
The right to decide how a business spends its profits
The right to a safe and healthy working environment at their job
The right to demand that competing businesses shut down
Which of the following is an example of a variable cost for a small business?
Raw materials used in production
Monthly rent for office space
Yearly business license fee
Annual business insurance premium
What is one reason a business might conduct market research before launching a new product?
To guarantee the product will be a success
To better understand customer needs and preferences
To eliminate all competition in the market
To avoid paying any taxes
Which of the following best describes the purpose of promotion in the marketing mix?
To inform and persuade customers to buy the product
To set the price of the product
To determine the location of the business
To calculate the total costs of production
Which of the following is a benefit of conducting market research before starting a business?
It helps identify gaps in the market and customer preferences.
It guarantees immediate profitability for the business.
It removes the need for any advertising.
It ensures competitors will leave the market.
What is one potential risk of operating as a sole trader?
Being personally responsible for all business debts
Sharing profits with multiple partners
Having limited liability protection
Automatically attracting large investments
Why might a business choose to segment its market by location?
To ensure all customers pay the same price
To tailor products and marketing to local customer needs
To eliminate the need for advertising
To avoid any form of competition
Which of the following is NOT a component of Break Even Charts?
Fixed Costs
Variable Costs
Profit Margins
Customer Feedback
Why are Break Even Charts important?
They help in identifying the best customers.
They assist in determining the point at which a business neither makes a profit nor a loss.
They are used for creating advertisements.
They track the performance of employees.
Which strategy can be used to lower the break even point?
Increasing fixed costs
Decreasing variable costs per unit
Reducing the number of products offered
Increasing the price of the product
What is an advantage of lowering the break even point?
It increases the dependency on a single product.
It reduces the risk of losses.
It makes the company less competitive.
It requires a larger inventory.
Why do you need a business plan?
To explain your idea
the ability to get financing.
it's a road map that sets objectives and goals for the business
All of the above
All partnerships must be 50 - 50?
True
False
What are the reasons why profits may fall during the decline stage of the product life cycle?
sales are increasing
sales volume is decreasing
prices may have to be cut due to a saturated market
the business will be spending more on marketing
