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Business Studies · May / June 2024 · Paper 22 · Question 4

0450

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  • 4(a)[8]

    Using Appendix 2 and other information, explain two ways JJ may be affected by the forecast increase in unemployment in country X. Award 1 mark for each way (max 2). Award a maximum of 3 additional marks for each explanation of the way JJ may be affected by the forecast increase in unemployment – one of which must be applied to this context. Relevant ways might include:

    Makes it easier for JJ to recruit new employees – larger pool of unemployed people to choose from – may be more skilled people available for work
    May make it easier to resist demand for higher wages from employees – rising level of unemployment means more competition amongst workers for jobs - so willing to accept lower wages
    May lead to lower demand for JJ's products – consumer spending is lower – as many people have lost their jobs so incomes are lower
    Lower priced products produced by JJ may see an increase in demand – as consumers have less income available to spend on luxury high priced items
    JJ may be less willing to invest – as future sales may not increase for some time – making it more difficult to gain a return on investment
    Lower sales in country X so JJ may try harder to export its products - spreads risk For example: May make it easier for JJ to recruit new employees (1)

    as there is a larger pool of unemployed people to choose from (1)

    and many of these workers may be skilled people available for work (1)

    with experience of how to manufacture jewellery (app). Application could include: jewellery;

    set up 25 years ago;

    public limited company;

    objective to increase profit every year;

    to expand the business;

    sold directly to customers in other countries;

    30% sold using ecommerce;

    70% sold in jewellery shops;

    raw materials purchased locally;

    60 full-time employees;

    25 part-time employees;

    bracelets;

    rings;

    earrings;

    increase from 3% to 6%.

  • 4(b)[12]

    Using Appendix 3 and other information, consider the following two environmental issues when JJ manufactures its products. Which issue should JJ choose to solve first? Justify your answer.

    Using coal for fuel in its factory
    Buying from suppliers that damage the environment Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of the two issues. Well-justified conclusion. Candidates discussing the two issues in detail, in context and with a well-justified conclusion including why the alternative issue was rejected should be rewarded with the top marks in the band. 9–12 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one issue. Judgement with some justification/some evaluation of choice made. Candidates discussing at least one issue in detail and applying it to the case should be rewarded with the top marks in the band. 5–8 Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss the problems with little/no explanation. Simple judgement with limited justification/limited evaluation of choice made. Candidates outlining the two issues in context should be rewarded with the top marks in the band. 1–4 No creditable response Relevant points might include: Using coal for fuel in its factory
    Using coal causes global warming giving JJ a bad reputation - bad publicity from pressure groups
    Price of coal is increasing which continually increases cost of power for the factory – if JJ continues to use coal it will raise the costs of manufacturing jewellery
    Could choose to reduce use of coal so JJ could benefit from the 25% government grant to invest in solar power for the factory – this would reduce the environmental impact of JJ’s factory which other manufacturers may not be doing so improving JJ’s image - reducing the pressure from environmental pressure groups
    As all jewellery manufacturers use the same process and have the same increases in the price of coal – may be no change in JJ’s competitiveness Buying from suppliers that damage the environment
    JJ may be negatively affected by its association if consumers become aware of where JJ buys its raw materials - JJ’s suppliers are causing environmental damage to the areas around their mines
    Some consumers are only interested in the price of JJ’s products and may not care about the suppliers – so may have no effect on JJ’s sales/revenue
    Pressure groups may try to make JJ change its suppliers – may lead to increased raw material costs as located further away – raising prices/reducing profit margins
    JJ could encourage its suppliers to change their mining operations to more environmentally friendly methods helps JJ’s reputation – but may lead to increased costs Conclusion Justification might include:
    The issue of using coal should be the first to solve because coal prices are increasing so costs will continue to rise if JJ does not change to solar power. The 25% grant from the government will help. The initial investment can be repaid over a long time period and costs reduced throughout this time. Customers may not be aware of the environmental damage caused by the suppliers JJ uses and so there may be no effect on sales or revenue and there is no rush to reduce this problem.
    The issue of buying from local suppliers that damage the environment should be solved first as the damage to JJ's reputation may be difficult to recover from and the business may lose many loyal customers of its jewellery, leading to lower revenue/profit.
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