Business Studies · Oct / Nov 2016 · Paper 21 · Question 2

Identify and explain two reasons why P & P might respond to the pressure group and change what the company is doing. [8]

Knowledge [2 × 1] – award one mark for each reason Analysis [2 × 1] – award one mark for a relevant explanation for each reason Application [2 × 2] – award two application marks for each reason Award one mark for each reason (maximum of two), such as:

paint manufacturer;

large limited company;

large factory next to a river;

pollution;

waste;

dumping in the river;

makes tins (cans) of paint;

sells to large retailers;

150 production workers;

employees live near to the factory;

details of two options outlined in Appendix 2;

details of pollution caused by paint production outlined in Appendix 3. There may be other examples in context which have not been included here.

P & P production results in external costs as outlined in Appendix 3. Consider the external costs and external benefits of the production of paint by P & P. Recommend whether the Government should take any action. Justify your answer. (12) Relevant points might include: External costs Pollution – waste put into river makes children ill, kills fish, people can no longer catch their own fish, have to buy fish now – no clean water External benefits Provides jobs;

increased sales for fish sellers;

taxes paid to government Knowledge/Analysis/Evaluation – award up to 10 marks using the levels-based mark scheme below. Knowledge/Analysis/ Evaluation Level 3 At least 2 × Level 2 + 9–10 marks for well justified recommendation as to whether or not the government should take any action. 7–8 marks for some limited judgement shown in recommendation as to whether or not the government should take any action. Level 2 4–6 mark Detailed discussion of external costs and benefits on third parties. Level 1 1–3 marks Outline of external costs and benefits. Level 1 – 1 mark for each L1 statement (max of 3 marks) e.g. The company puts waste products into the river, Level 2 – one L2 explanation can gain 4 marks and a further mark can be awarded for each additional L2 explanation (max 6 marks) e.g. The company puts waste products into the river and this kills the fish leading to local people have to increase their spending on food which leaves them less to spend on other products. (4 marks for L2 answer plus one application mark for mentioning catching fish from the river). Level 3 – For L3 to be awarded there need to be at least two L2 marks awarded and then a recommendation whether the government should introduce regulations on the activities of this company. Award up to 2 additional marks for relevant application. Possible application marks: paint manufacturer;

large limited company;

imports raw materials;

large factory next to a river;

makes tins (cans) of paint;

pressure groups;

sells to large retailers;

uses batch production;

150 production workers;

employees live near to the factory;

details of two options outlined in Appendix 2;

details of pollution caused by paint production outlined in Appendix 3. No credit for paint but ok for pollution. There may be other examples in context which have not been included here.