IFYBS004 Business Studies
THE NCUK INTERNATIONAL FOUNDATION YEAR
IFYBS004 Business Studies
End of Semester 1 Test
Exemplar
Time Allowed
1 Hours 40 minutes
1
1
INSTRUCTIONS TO STUDENTS
Questions
1-11
Answer ALL questions. These questions carry 30 marks in
total (60% of the marks for this assessment).
Questions
12-13
Answer 1 question ONLY. This question carries 20 marks in
total (40% of the marks for this assessment).
The marks for each question are indicated in square brackets [ ].

An approved calculator may be used in the test.

Show ALL working in your answer booklet.

Test materials must not be removed from the test room.
DO NOT OPEN THIS QUESTION PAPER UNTIL INSTRUCTED BY THE
INVIGILATOR
Exemplar
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Page 1 of 5
IFYBS004 Business Studies
Questions 1-11
Answer ALL questions.
These questions carry 30 marks in total.
Question 1
Rahul makes and sells handmade toy trains. The cost of raw materials per toy
train is £3.75 and allocated fixed costs are £2.00 per train produced. Rahul
sells each of the toy trains he makes for £35.00.
The added value per train is:
A
B
C
D
[1]
£29.25
£31.25
£33.00
£5.75
Question 2
Which of the following is not a feature of a public limited company?
A
B
C
D
[1]
They are private sector organisations
Shares can be sold on the open market
Owners have unlimited liability for business debts
Shareholders are the owners
Question 3
Which of the following is not a feature of a sole trader legal structure?
A
B
C
D
The
The
The
The
[1]
owner has unlimited liability for business debts
business is a separate entity from the owner
owner makes all decisions
business has one owner
Question 4
Dividing the consumers in a market according to their lifestyles is known as:
A
B
C
D
[1]
Geographic segmentation
Psychographic segmentation
Demographic segmentation
Behavioural segmentation
Question 5
Paul Tang has used his life savings to start his own business. He has used the
cash to buy a small shop which he will use to sell greetings cards and small
gifts. He has employed his niece to work alongside him in the shop.
Which factor of production is not mentioned in the above paragraph?
A
B
C
D
[1]
Land
Labour
Capital
Enterprise
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IFYBS004 Business Studies
Question 6
Which of the following statements about market research is true?
A
B
C
D
[1]
Primary research is quicker to collect than secondary research
Secondary research is more expensive than primary research
Primary research could be used to collect qualitative data
Secondary research data is more up-to-date than primary research data
Question 7
Which of the following is not a method of measuring the size of a business?
A
B
C
D
[1]
capital expenditure
market capitalisation
capital employed
market share
Question 8
Which of the following is an example of the augmented product?
A
B
C
D
[1]
Packaging
After sales service
Brand name
Design
Question 9
Which of the following functional areas of business is responsible for
quality management?
A
B
C
D
[1]
Operations
Human Resource Management (HRM)
Marketing
Finance
Question 10
Which of the following is an example of above-the-line promotion?
A
B
C
D
[1]
Sales promotion
Sponsorship
Television advertising
Money-off vouchers
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Page 3 of 5
IFYBS004 Business Studies
Question 11
Charlie owns a hotel in a seaside resort in the UK. In 2019 the average price of
a room, per night, was £100. In 2020 Charlie borrowed £200,000 from his bank
to invest in refurbishment and improving facilities for guests. This included, the
redecoration of bedrooms and public areas, and upgrading guest facilities, such
as replacing older televisions, and adding tea and coffee making facilities and a
refrigerator to many of the guest bedrooms.
Following this investment, Charlie increased prices for these rooms which are
now promoted as deluxe rather than standard rooms. The average room price
in 2020 was £105.
The hotels maximum annual occupancy is 7000 room nights based on a 50week year. In 2019 the hotel had 80% room occupancy. Following the price
increase the number of room nights sold fell to 5460.
The hotel’s kitchen equipment is old and keeps breaking down. It is in urgent
need of replacement. This will cost £75,000. Charlie is not sure whether he
should buy the equipment using a long-term bank loan or lease the equipment.
(a)
Charlie’s hotel business is in the tertiary sector. With the aid of
appropriate examples, describe the other two sectors of business
activity.
[4]
(b)
Using the information provided, calculate the price elasticity of demand
for the hotel for 2020 following the price increase.
[4]
(c)
Based on your calculation in part (b) explain one use of price elasticity of
demand to Charlie.
[2]
(d)
Recommend whether Charlie should use a bank loan or lease to obtain
the new kitchen equipment.
[10]
QUESTIONS CONTINUE ON NEXT PAGE
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IFYBS004 Business Studies
Questions 12 - 13
Answer 1 question ONLY
This question carries 20 marks in total.
Question 12
Evaluate the decision of a UK car manufacturer to enter into a joint venture
with a car manufacturer in South Africa.
[20]
Question 13
Evaluate the usefulness of the Boston Matrix to a computer manufacturer.
-
Exemplar
[20]
This is the end of the test. -
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