A-level BUSINESS Paper 1 Business 1

Section 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 farmer takes over a retailer in order to sell its produce. This is an example of A horizontal integration. B backward vertical integration. C forward vertical integration. D conglomerate integration. [1 mark] 0 2 Figure 1 below shows a stakeholder map. Figure 1: Stakeholder map CORRECT METHOD WRONG METHODS 3 *03* Turn over ► IB/G/Jun17/7132/1 Do not write outside the box For this particular business, which stakeholder group is most likely to influence this business’ management decision-making? A Suppliers B Customers C Shareholders D Employees [1 mark] 0 3 A business experiencing a lower level of capacity utilisation than usual may benefit because it A reduces the average costs of production. B provides more time for maintenance and repair of machinery. C can increase employee morale, because employees feel more secure in their jobs. D represents a more efficient use of capital equipment. [1 mark] 0 4 The information below is an extract from a company’s annual accounts.  Current assets: £3 million  Current liabilities: £2.4 million  Non-current liabilities: £4.2 million  Capital employed: £12 million The company’s gearing ratio is A 35% B 250% C 20% D 5% [1 mark] 4 *04* IB/G/Jun17/7132/1 Do not write outside the box 0 5 Options A to D below show four different combinations of monetary and fiscal policy. Which combination is most likely to lead to an increase in sales for a company that builds houses? Assume there are no other changes. A Decreasing interest rates and decreasing taxation B Decreasing interest rates and increasing taxation C Increasing interest rates and decreasing taxation D Increasing interest rates and increasing taxation [1 mark] 0 6 A business helps its local community with a view to improving the quality of life of nearby residents. In Carroll's pyramid of corporate social responsibility, this is most likely to be an example of A economic responsibility. B ethical responsibility. C legal responsibility. D philanthropic responsibility. [1 mark] 0 7 An approach to examine the impact of possible changes on the predicted financial outcome of an investment is known as A investment criteria. B non-financial factors. C sensitivity analysis. D the discount rate. [1 mark] 5 *05* Turn over ► IB/G/Jun17/7132/1 Do not write outside the box 0 8 Starbucks is an American coffee shop. In recent years it has opened over 300 tea shops in America to appeal to its existing customers. According to Ansoff’s matrix this is an example of A diversification. B market development. C market penetration. D product development. [1 mark] 0 9 Which type of crisis is most likely to occur at point 3 of Greiner’s model of growth shown below? A Leadership crisis B Autonomy crisis C Red tape crisis D Control crisis [1