Question Paper

Write your name here Surname Other names

Centre Number Candidate Number Edexcel GCE

Business Studies/Economics and Business Advanced Subsidiary Unit 1: Developing New Business Ideas

Thursday 21 May 2009 – Morning Paper Reference 6BS01/01 Time: 1 hour 15 minutes 6EB01/01

You do not need any other materials. Total Marks

Instructions • Use black ink or ball-point pen. • Fill in the boxes at the top of this page with your name, centre number and candidate number. • Answer all questions in Section A and all parts of the question in Section B. • Answer the questions in the spaces provided – there may be more space than you need. • You may use a calculator. Information • The total mark for this paper is 70. • The marks for each question are shown in brackets – use this as a guide as to how much time to spend on each question. • Quality of written communication will be taken into account in the marking of your response to question 13 in Section B. This question is indicated with an asterisk. – you should take particular care with your spelling, punctuation and grammar, as well as the clarity of expression. Advice • Read each question carefully before you start to answer it. • Keep an eye on the time. • Try to answer every question. • Check your answers if you have time at the end. Turn over M35429A ©2009 Edexcel Limited. *M35429A0116* 4/4/4/4/4/3/

M35429A_GCE_AS_Bus_Stud_Econ_Uni1 1 19/11/2008 12:23:52 SECTION A

Answer ALL the questions in this section.

Write the letter of your chosen answer in the box and then explain your choice in the space provided.

You should spend 30 minutes on this section. Use the data to support your answers where relevant. You may annotate and include diagrams in your answers. 1 (a) Ruth Badger, star of the BBC series ‘The Apprentice’, has argued that the most important characteristic of a successful entrepreneur is ‘having the right attitude’. Which of the following is least likely to be a characteristic of a successful entrepreneur? (1) A Resilience B Creativity C Cautiousness D Hard working

Answer

(b) Explain why this answer is correct. (3)

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(Total for Question 1 = 4 marks)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni2 2 19/11/2008 12:23:52 2 (a) Mike and Carol Clare, husband and wife former owners of Dreams, the UK bed company, decided to sell the company in March 2008. Which of the following is the most likely reason to explain their sale of the business? (1) A To work fewer hours B To increase risk taking C To become more dependent D To reduce capital to set up another business

Answer

(b) Explain why this answer is correct. (3)

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(Total for Question 2 = 4 marks)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni3 3 19/11/2008 12:23:52 3 (a) In January 2008 Sky TV introduced a £16 promotional package which offered satellite TV, broadband and free evening and weekend telephone calls to new customers. Which of the following was the most likely consequence of the above for a self-employed satellite and aerial installer? (1) A More installation contracts for Sky TV B More British Telecom customer contracts C An increase in the average costs of digital aerials D A decrease in income

Answer

(b) Explain why this answer is correct. (3)

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(Total for Question 3 = 4 marks)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni4 4 19/11/2008 12:23:52 4 (a) The price of bread in UK supermarkets increased on average by 50 per cent in 2007. A small bakery, Subans of Nottingham, ceased trading as a result. Which of the following is the most likely explanation for the closure of the bakery? (1) A A decrease in the demand for bread B A decrease in overheads C A decrease in competition from rival supermarkets D An increase in contribution

Answer

(b) Explain why this answer is correct. (3)

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(Total for Question 4 = 4 marks)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni5 5 19/11/2008 12:23:52 5 (a) In 2007 Social Trends reported that a growing proportion of the UK population were using credit and debit cards to make purchases of less than £10. Social Trends is a valuable secondary source of information for many businesses. Which of the following is also a source of secondary research? (1) A Customer surveys B The national census C Visits to a local business D Interviews with a marketing director

Answer

(b) Explain why this answer is correct. (3)

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(Total for Question 5 = 4 marks)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni6 6 19/11/2008 12:23:52 6 (a) Throughout 2007, the UK experienced a gradual decline in interest rates. Which of the following is the most likely consequence for a small electrical retailer? (1) A Spending on stock decreases B Staff wages are increased C Borrowing increases D Average cost of stock increases

Answer

(b) Explain why this answer is correct. (3)

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(Total for Question 6 = 4 marks)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni7 7 19/11/2008 12:23:52 7 (a) Clear Vision is a small window cleaning business operating in Derby. In order to seek finance for the business to start-up, Mark Wilkinson, the proprietor, had to prepare a business plan. Which of the following would Mark include in his business plan? (1) A Bank loan application B Cash-flow forecast C Bank statement D Trade-off

Answer

(b) Explain why this answer is correct. (3)

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(Total for Question 7 = 4 marks)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni8 8 19/11/2008 12:23:52 8 (a) Sir Alan Sugar, star of the BBC’s The Apprentice, has a personal fortune of around £800 million, stemming from a range of successful businesses. Sir Alan Sugar considers himself to be successful because he is effective at positioning his businesses. Which of the following is not an aspect of positioning a business? (1) A Evaluating the competition B Estimating profitability C Market mapping D Considering the competitive advantage of the product/service

Answer

(b) Explain why this answer is correct. (3)

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(Total for Question 8 = 4 marks)

TOTAL FOR SECTION A: 32 MARKS

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M35429A_GCE_AS_Bus_Stud_Econ_Uni9 9 19/11/2008 12:23:52 SECTION B

Answer ALL parts of the question in this section.

SECTION B You are advised to spend 45 minutes on this section. SECTION B You are advised to spend 45 minutes on thisEvidence section. A You are advised to spend 45 minutes on this section. Evidence A Shivani Patel has been making and selling Evidence A contemporary precious jewellery since leaving The Shivani Patel has been making and selling contemporary precious Birmingham School of Jewellery in the summer of jewellery since leaving The Birmingham School of Jewellery in Shivani Patel has been making and selling contemporary precious 2005. Since then her business has enjoyed a steadily the summer of 2005. Since then her business has enjoyed a jewellery since leaving The Birmingham School of Jewellery in expanding turnover from around £20 000 per annum 5 steadily expanding turnover from around £20 000 per annum to the summer of 2005. Since then her business has enjoyed a £60 000 in 2008. Trade changed dramatically when Shivani re- steadily expanding turnover from aroundto £60 £20 000 000 in per 2008. annum Trade to changed dramatically when located in November 2007 to The Fold, in Worcestershire. Here sheShivani£60 set 000up a re-locatedin combined 2008. Trade in November changed dramatically 2007 to The when Fold, Shivaniin Worcestershire. re- Here she set up a workshop and retail gallery space showcasing her work. Working exclusivelycombinedlocated in withNovember workshop precious 2007 and toretail The gallery Fold, in space Worcestershire. showcasing Here her work.she set Working up a combined exclusively metals, each piece of jewellery is completely hand crafted. withworkshop precious and retailmetals, gallery each space piece showcasing of jewellery her is work.completely Working hand exclusively crafted. with precious metals, each piece of jewellery is completely hand crafted. Shivani works using the Korean technique of 'Keum-boo', involving Shivanifusing pure works gold using foil tothe the Korean technique of ‘Keum-boo’, involving fusing pure gold foil to 10 surface of silver. Designs and ideas are continuously evolving as hertheShivani focus surface increases works of silver.using on working theDesigns Korean and technique ideas are of continuously 'Keum-boo', involvingevolving asfusing her focuspure goldincreases foil to on the with gold and unique hand selected precious and semi-precious stones.workingsurface of with silver. gold Designs and unique and ideas hand are selected continuously precious evolving and semi-precious as her focus increases stones. on working with gold and unique hand selected precious and semi-precious stones.

Evidence B Evidence B Evidence B The Fold® at New House Farm, Bransford, midway between MalvernThe Fold® at New House Farm, Bransford, midway between and Worcester, is a refurbished barn and other converted farm TheMalvern Fold® and at Worcester,New House is Farm, a refurbished Bransford, barn midway and betweenother Malvern buildings. The Fold® is run as a not-for-profit community enterprise;andconverted a Worcester, farm is buildings.a refurbished The barn Fold® and is other run convertedas a not-for-profit farm unique mix of businesses ranging from market gardeners to buildings.community The enterprise: Fold® is runa unique as a not-for-profit mix of businesses community ranging enterprise; from a contemporary jewellers. unique mix of businesses ranging from market gardeners to market gardeners to contemporary jewellers. 5 contemporary jewellers. At the heart of The Fold® is The ecoCafé, a place to meet and eat At the heart of The Fold® is The ecoCafé, a place to meet and quality food which you can see prepared in an open-style kitchen. TheAteat the quality heart offood The which Fold® you is Thecan ecoCafé,see prepared a place in toan meet open-style and eat food is local, seasonal, fair trade and organic wherever possible. In Thequalitykitchen. food The which food youis local, can seeseasonal, prepared fair in trade an open-style and organic kitchen. The ecoCafé there are quiet corners to meet with friends or more communalfoodwherever is local, possible. seasonal, In fairThe trade ecoCafé and organicthere are wherever quiet corners possible. to In The spaces where you may find yourself unexpectedly involved in a ecoCafé there are quiet corners to meet with friends or more communal meet with friends or more communal spaces where you may 10 conversation about how to use less electricity. spacesfind yourself where you unexpectedly may find yourself involved unexpectedly in a conversation involved about in a howconversation to use less about electricity. how to use less electricity.

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M35429A_GCE_AS_Bus_Stud_Econ_Uni10 10 19/11/2008 12:23:53 Evidence C – Gold price annual increases 2001–2007 Evidence D – Fairtrade Facts

2001 2% Flying off the shelves: consumers 2002 23% spent nearly half a billion (£493m) on 2003 21% products carrying the FAIRTRADE Mark 2004 5% in the UK in 2007. 2005 20% Go bananas: 1 in every 4 bananas sold 2006 19% in UK supermarkets is now Fairtrade with sales topping £150m in 2007. 2007 25%

(Sources: A adapted from www.shivanipatel.co.uk B www.thefold.org.uk C Kitco.com D www.fairtrade.org.uk)

9 Evidence A states “her business has enjoyed a steadily expanding turnover” (Evidence A, lines 4–5). Explain two likely reasons why Shivani’s jewellery business’s turnover has increased. (6)

Reason 1 ......

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Reason 2 ......

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M35429A_GCE_AS_Bus_Stud_Econ_Uni11 11 19/11/2008 12:23:53 10 Explain why it might be necessary for Shivani to distinguish carefully between turnover and operating profit. (4)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni12 12 19/11/2008 12:23:53 11 The owners of The ecoCafé aim to achieve significant added value. Assess why providing added value might be particularly important for any Fold enterprise. (8)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni13 13 19/11/2008 12:23:53 12 Fluctuations in exchange rates affect companies involved in international trade. Discuss the extent to which an appreciation in the £ sterling might affect UK retailers of Fairtrade products, such as the Co-operative. (8)

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M35429A_GCE_AS_Bus_Stud_Econ_Uni14 14 19/11/2008 12:23:53 *13 If the price of gold (Evidence C) and the demand for Fairtrade products (Evidence D) both continue to rise, assess the likely implications for Shivani and The ecoCafé, respectively. (12)

Shivani and the price of gold ......

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M35429A_GCE_AS_Bus_Stud_Econ_Uni15 15 19/11/2008 12:23:53 The ecoCafé and the demand for Fairtrade products ......

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TOTAL FOR SECTION B: 38 MARKS TOTAL FOR PAPER: 70 MARKS

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M35429A_GCE_AS_Bus_Stud_Econ_Uni16 16 19/11/2008 12:23:53