Section A box Answer all questions in this section. Only one answer per question is allowed. For each question completely fill in the circle alongside the appropriate answer. CORRECT METHOD WRONG METHODS 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 In which of these business forms could the owner/owners be required to sell personal assets to pay for business liabilities? [1 mark] A Private limited companies and public limited companies B Private limited companies and sole traders C Public limited companies only D Sole traders only 0 2 Statement 1: ‘Cheaper resources overseas would discourage a UK business which has a low-cost positioning strategy from re-shoring production.’ Statement 2: ‘Political instability overseas would discourage a UK business from re-shoring production.’ Read statements 1 and 2 and select the correct option from the following: [1 mark] A Statement 1 is true. Statement 2 is true. B Statement 1 is true. Statement 2 is false. C Statement 1 is false. Statement 2 is true. D Statement 1 is false. Statement 2 is false. 3 *03* Turn over ► IB/G/Jun24/7132/1 Do not write outside the box 0 3 Delayering in a business is likely to: [1 mark] A decrease the span of control of managers. B improve the speed of vertical communication. C increase opportunities for promotion. D lead to less autonomy for workers. 0 4 The data below shows the budgets of a business for a particular year: Budgeted income: £200m Budgeted expenditure: £160m At the end of the year, the actual income was as budgeted but expenditure was 20% higher than the budget. This means that the actual profit showed: [1 mark] A a favourable variance of £8 million. B a favourable variance of £32 million. C an adverse variance of £8 million. D an adverse variance of £32 million. 0 5 Which one of the following statements is true? In a SWOT analysis: [1 mark] A a recession in the business’ main export market is a weakness. B an increase in labour productivity in the business is an opportunity. C an increase in the number of patents held by a business is a strength. D disappointing levels of innovation from research and development are a threat. 4 *04* IB/G/Jun24/7132/1 Do not write outside the 0 6 box Statement 1: ‘According to Ansoff’s matrix, market development involves selling a new product in a new market.’ Statement 2: ‘According to Ansoff’s matrix, market penetration involves selling an existing product in an existing market.’ Read statements 1 and 2 and select the correct option from the following: [1 mark] A Statement 1 is true. Statement 2 is true. B Statement 1 is true. Statement 2 is false. C Statement 1 is false. Statement 2 is true. D Statement 1 is false. Statement 2 is false. 0 7 Assuming no other changes, sales revenue for a product will stay the same if: [1 mark] A incomes rise by 10% and the income elasticity of demand for the product is 0 B incomes rise by 10% and the income elasticity of demand for the product is +0.1 C the price rises by 10% and the price elasticity of demand for the product is 0 D the price rises by 10% and the price elasticity of demand for the product is –10