IGCSE BUSINESS STUDIES END OF COURSE UPDATED
QUESTIONS AND ANSWERS GRADED A+
✔✔Disadvantages of division of labour and job specialization - ✔✔•Workers can
become bored doing just one job-efficiency might fall
•If a worker is absent no one else can do the job- production might be stopped
•Products become standardized
•Small businesses can't compete
✔✔Added value - ✔✔Added value is the difference between the selling price of a
product and the cost of bought in materials and components.
✔✔How to increase added value - ✔✔-Increase selling price but keep the costs the
same, to do this you need to have a good image of your product
-Reduce cost but keep selling price the same, this might decrease the quality
✔✔CHAPTER 2 - CLASSIFICATION OF BUSINESS - ✔✔
✔✔Primary sector - ✔✔The primary sector of industry extracts and uses the natural
resources of the earth to produce raw materials used by other businesses
✔✔Secondary sector - ✔✔The secondary sector of industry manufactures goods using
raw materials provided by the primary sector.
✔✔Tertiary sector - ✔✔The tertiary sector of industry provides services to consumers
and the other sectors of industry.
✔✔Industrialization - ✔✔The growing importance of the secondary sector in developing
countries
✔✔Advantages of industrialization - ✔✔•National output increases which increases
average living standard
•Increasing output can result in lower imports and higher exports
•Employment increases
•Tax money increases
•Value is added to the country's raw materials
✔✔Disadvantages of industrialization - ✔✔•More people move to the city which causes
housing and social problems
•Expansion on manufacturing may make it difficult for businesses to recruit and maintain
staff
•Business import costs will increase
•Pollution from factories add to the countries environmental problems
•multinational companies will comparative with the small businesses
,✔✔De-industrialisation - ✔✔De-industrialisation occurs when there is a decline in the
importance of the secondary, manufacturing sector of industry in a country.
✔✔Disadvantages of de-industrialization - ✔✔•Increase in competition for businesses
•Structural unemployment- some people don't have the skills to work in the tertiary
sector so the become unemployed
✔✔Advantages of de-industrialization - ✔✔•Income and living standards of the citizens
increase
✔✔Why does de-industrialization happen - ✔✔-Sources of primary products become
depleted
-Most developed countries can't compete in manufacturing against newly industrialized
countries
-As the country's total wealth increases and living standards rise, more people spend
more money on travel and restaurants than on manufactured products
✔✔Mixed economy - ✔✔A mixed economy has both a private sector and a public
sector.
✔✔Private sector - ✔✔Businesses not owned by the government. Services are charged
and paid for by the customer
✔✔Public sector - ✔✔Government owned and controlled businesses and organisations.
Services provided are free and are paid for by taxes.
✔✔Privatisation - ✔✔When governments sell public sector businesses to private sector
businesses
✔✔CHAPTER 3 - ENTERPRISE, BUSINESS GROWTH AND SIZE - ✔✔
✔✔Entrepreneur - ✔✔An entrepreneur is a person who organises, operates and takes
the risk for a new business venture.
✔✔Benefits of being an entrepreneur - ✔✔-Independence- able to choose how to use
time and money
-Able to put ideas into practice
-May become famous and successful if business grows
-May be profitable and the income might be higher than working as an employee for
another business
-Able to make use of personal interests and skills
✔✔Disadvantages of being an entrepreneur - ✔✔-Risk-the business might fail
-Capital- have to put own money into business and might have to find other sources of
money
, -Lack of knowledge and experience in starting and operating a business
-Opportunity cost- lost income from not being employed in another business
✔✔Qualities of an entrepreneur - ✔✔-Hard working- Have to work long hours and have
few vacation days
-Risk taker- Making decisions to produce goods or services that people might buy is
potentially risky
-Creative- A new business needs new ideas about products , services and ways to
attract customers, in order to make it different from other companies
-Optimistic- Looking forward to the future is essential, if you think you will fail you will fail
-Self-confident- Necessary to convince to convince banks, other lenders and customers
that your business will be successful
-Innovative- Being able to put new ideas into practice in interesting and different ways is
important
- Independent- Will often have to work on their own before they can hire other people,
have to be able to be motivated and be able to work by their self
-Effective communicator- Talking clearly and confidently to banks, other lenders,
customers and government agencies about the new business will raise the profile of the
new business
✔✔Why do governments support business startups - ✔✔-Reduce unemployment- New
businesses will often create jobs
-Increase competition- New businesses give customers more choice and compete with
already established businesses
-Increase output- The economy benefits from being increased output of goods and
products
-Benefit society-Entrepreneurs may create social enterprises
-Can grow further- May help some small firms grow to become very large and important
in the future
✔✔How do governments help business - ✔✔-Business idea and help- Governments
organize advice and support sessions offered by experienced people
-Finance- Loan money to businesses at small interest rates
-Labour- Gives businesses money to train employees
Research- Encourage universities to make their research facilities available to new
businesses
✔✔Business plan - ✔✔A business plan is a document containing the business
objectives and important details about the operations, finance and owners of the new
business.
✔✔How does a business plan help an entrepreneur - ✔✔-Help them stay on strategy
-Objectives will be clear
- Helps have a good idea about cost and revenue
-Helps with keeping track of what customers they are aiming at
-Helps with hiring people and buying machinery
QUESTIONS AND ANSWERS GRADED A+
✔✔Disadvantages of division of labour and job specialization - ✔✔•Workers can
become bored doing just one job-efficiency might fall
•If a worker is absent no one else can do the job- production might be stopped
•Products become standardized
•Small businesses can't compete
✔✔Added value - ✔✔Added value is the difference between the selling price of a
product and the cost of bought in materials and components.
✔✔How to increase added value - ✔✔-Increase selling price but keep the costs the
same, to do this you need to have a good image of your product
-Reduce cost but keep selling price the same, this might decrease the quality
✔✔CHAPTER 2 - CLASSIFICATION OF BUSINESS - ✔✔
✔✔Primary sector - ✔✔The primary sector of industry extracts and uses the natural
resources of the earth to produce raw materials used by other businesses
✔✔Secondary sector - ✔✔The secondary sector of industry manufactures goods using
raw materials provided by the primary sector.
✔✔Tertiary sector - ✔✔The tertiary sector of industry provides services to consumers
and the other sectors of industry.
✔✔Industrialization - ✔✔The growing importance of the secondary sector in developing
countries
✔✔Advantages of industrialization - ✔✔•National output increases which increases
average living standard
•Increasing output can result in lower imports and higher exports
•Employment increases
•Tax money increases
•Value is added to the country's raw materials
✔✔Disadvantages of industrialization - ✔✔•More people move to the city which causes
housing and social problems
•Expansion on manufacturing may make it difficult for businesses to recruit and maintain
staff
•Business import costs will increase
•Pollution from factories add to the countries environmental problems
•multinational companies will comparative with the small businesses
,✔✔De-industrialisation - ✔✔De-industrialisation occurs when there is a decline in the
importance of the secondary, manufacturing sector of industry in a country.
✔✔Disadvantages of de-industrialization - ✔✔•Increase in competition for businesses
•Structural unemployment- some people don't have the skills to work in the tertiary
sector so the become unemployed
✔✔Advantages of de-industrialization - ✔✔•Income and living standards of the citizens
increase
✔✔Why does de-industrialization happen - ✔✔-Sources of primary products become
depleted
-Most developed countries can't compete in manufacturing against newly industrialized
countries
-As the country's total wealth increases and living standards rise, more people spend
more money on travel and restaurants than on manufactured products
✔✔Mixed economy - ✔✔A mixed economy has both a private sector and a public
sector.
✔✔Private sector - ✔✔Businesses not owned by the government. Services are charged
and paid for by the customer
✔✔Public sector - ✔✔Government owned and controlled businesses and organisations.
Services provided are free and are paid for by taxes.
✔✔Privatisation - ✔✔When governments sell public sector businesses to private sector
businesses
✔✔CHAPTER 3 - ENTERPRISE, BUSINESS GROWTH AND SIZE - ✔✔
✔✔Entrepreneur - ✔✔An entrepreneur is a person who organises, operates and takes
the risk for a new business venture.
✔✔Benefits of being an entrepreneur - ✔✔-Independence- able to choose how to use
time and money
-Able to put ideas into practice
-May become famous and successful if business grows
-May be profitable and the income might be higher than working as an employee for
another business
-Able to make use of personal interests and skills
✔✔Disadvantages of being an entrepreneur - ✔✔-Risk-the business might fail
-Capital- have to put own money into business and might have to find other sources of
money
, -Lack of knowledge and experience in starting and operating a business
-Opportunity cost- lost income from not being employed in another business
✔✔Qualities of an entrepreneur - ✔✔-Hard working- Have to work long hours and have
few vacation days
-Risk taker- Making decisions to produce goods or services that people might buy is
potentially risky
-Creative- A new business needs new ideas about products , services and ways to
attract customers, in order to make it different from other companies
-Optimistic- Looking forward to the future is essential, if you think you will fail you will fail
-Self-confident- Necessary to convince to convince banks, other lenders and customers
that your business will be successful
-Innovative- Being able to put new ideas into practice in interesting and different ways is
important
- Independent- Will often have to work on their own before they can hire other people,
have to be able to be motivated and be able to work by their self
-Effective communicator- Talking clearly and confidently to banks, other lenders,
customers and government agencies about the new business will raise the profile of the
new business
✔✔Why do governments support business startups - ✔✔-Reduce unemployment- New
businesses will often create jobs
-Increase competition- New businesses give customers more choice and compete with
already established businesses
-Increase output- The economy benefits from being increased output of goods and
products
-Benefit society-Entrepreneurs may create social enterprises
-Can grow further- May help some small firms grow to become very large and important
in the future
✔✔How do governments help business - ✔✔-Business idea and help- Governments
organize advice and support sessions offered by experienced people
-Finance- Loan money to businesses at small interest rates
-Labour- Gives businesses money to train employees
Research- Encourage universities to make their research facilities available to new
businesses
✔✔Business plan - ✔✔A business plan is a document containing the business
objectives and important details about the operations, finance and owners of the new
business.
✔✔How does a business plan help an entrepreneur - ✔✔-Help them stay on strategy
-Objectives will be clear
- Helps have a good idea about cost and revenue
-Helps with keeping track of what customers they are aiming at
-Helps with hiring people and buying machinery
