AS BUSINESS Paper 1 Business 1

S box ection A Answer all questions in this section. Only one answer per question is allowed. For each answer completely fill in the circle alongside the appropriate answer. If you want to change your answer you must cross out your original answer as shown. If you wish to return to an answer previously crossed out, ring the answer you now wish to select as shown. 0 1 A new product has been launched onto the market. It currently has a low market share in a low growth market. Which category from the Boston Matrix is this product located in? A Cash cow B Dog C Question mark D Star [1 mark] CORRECT METHOD WRONG METHODS 3 *03* Turn over ► IB/M/Jun18/7131/1 Do not write outside the box 0 2 The break-even chart below shows the change in break-even output arising from a change in total costs from TC1 to TC2. In the diagram, the margin of safety has A fallen by 30 units as a result of a fall in fixed costs. B fallen by 20 units as a result of a fall in variable costs. C risen by 20 units as a result of a fall in fixed costs. D risen by 30 units as a result of a fall in variable costs. [1 mark] Turn over for the next question 4 *04* IB/M/Jun18/7131/1 Do not write outside the box 0 3 In the diagram below, demand for the product is most income inelastic between income levels of A £5 000 and £10 000 B £10 000 and £20 000 C £20 000 and £30 000 D £30 000 and £35 000 [1 mark] 5 *05* Turn over ► IB/M/Jun18/7131/1 Do not write outside the box 0 4 Which of the following statements is true? A If sales volume is falling but sales revenue is increasing the price is falling. B If price increases and sales volume falls there is a negative correlation between price and sales volume. C A product life cycle diagram shows the sales of a product in relation to the price. D Selling a product on credit increases both revenue and cash immediately. [1 mark] 0 5 Statement 1: ‘In a very centralised retail organisation, local shop managers decide on the store design.’ Statement 2: ‘In a decentralised retail organisation, local shop managers decide on the items of inventory to be held.’ Read statements 1 and 2 and select the correct option from the following options: A Statement 1 is true. Statement 2 is true. B Statement 1 is true. Statement 2 is false. C Statement 1 is false. Statement 2 is true. D Statement 1 is false. Statement 2 is false. [1 mark] Turn over for the next questio