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Business Studies · Oct / Nov 2016 · Paper 22 · Question 1

7115

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  • 1(a)[8]

    Identify and explain one advantage and one disadvantage to Ghaziz and Jasmin of being in a business partnership. [8]

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

    More capital than sole trader
    Share decision making
    Someone to share running the business/cover when holidays
    More ideas/specialisation Disadvantage
    Unlimited liability
    No continuity
    Share profits
    Conflicts between partners Award a maximum of three additional marks for each explanation of the advantage/disadvantage – 2 of which must be applied to this context. Indicative response: Unlimited liability (k) so if the demand for the cleaning or gardening services drops and they make a loss (ap) Ghaziz and Jasmin could lose their personal possessions to pay the bills(an). If customers do not pay them Ghaziz and Jasmin will have to pay the wages to the cleaners and gardeners out of their own money (ap). Possible application marks: gardening services;

    house cleaning services;

    partnership set up 5 years ago;

    partners have different ideas about reasons for success of the business;

    income in country X is increasing;

    employment is increasing;

    expand by offering new service;

    elderly people;

    old people;

    adults children;

    financial information from Appendix 1;

    information from the graph in Appendix 3. There may be other examples in context which have not been included here.

  • 1(b)[12]

    Consider the effects of each of the following changes on the success of GJ. Which change do you think will have the biggest effect on the profit of the business? Justify your answer. [12]

    Relevant points might include: Increasing employment in country X

    higher incomes leads to increased demand for services
    harder to find new employees
    increased wage rates to attract/retain employees Increase in tax on all services in country X
    increased price leads to falling demand
    increased spending on other more essential services – decreased demand for house cleaning/gardening
    all services taxed so little/no effect on GJ Increase in the number of people buying large houses with gardens in country X
    increased demand as more people require cleaning and gardening services
    increased incomes meaning larger houses can be purchased – increased demand for cleaning/gardening
    increased competition
    increased prices as increased demand – increased profit 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 conclusion of which change will have the biggest effect on profit rather than the other changes. 7–8 marks for some limited judgement shown in the conclusion of which change will have the biggest effect on profit Level 2 4–6 marks Detailed discussion of the effects of each change. Level 1 1–3 marks Outline of the effects of each change. Level 1 – 1 mark for each L1 statement (max of 3 marks) e.g. Higher incomes from more people having jobs leads to increased demand. Level 2 – 1 × L2 explanation can gain 4 marks and a further mark can be awarded for each additional L2 explanation (max 6 marks) e.g. Higher incomes from more people having jobs leads to increased demand for gardening and cleaning services. People are working and do not have time to clean their own houses and have higher income so can afford to pay GJ for house cleaning and gardening. This will increase revenue and profit for GJ. (4 marks for L2 answer + 1 application mark for mentioning house cleaning and gardening). Level 3 – For L3 to be awarded there needs to be at least two L2 marks awarded and then a conclusion of which change will have the biggest effect on profit. Award up to 2 additional marks for relevant application. Possible application marks: gardening services;

    house cleaning services;

    50 part-time workers;

    competitive pricing;

    old people;

    expand by offering new service of looking after elderly people;

    information from the graph in Appendix 3. There may be other examples in context which have not been included here.

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