Cambridge IGCSE and O Level Business Studies
Section 1 – Revision questions
Two-mark questions
1 Define ‘opportunity cost’.
2 Identify two advantages to a business of specialisation.
3 Identify two examples of capital goods.
4 Define ‘added value’.
5 Identify two differences between the private sector and the public sector.
6 Identify two characteristics of an entrepreneur.
7 Identify two uses of a business plan.
8 Identify two reasons why owners might want to grow their business.
9 Identify two problems of business growth.
10 Identify two reasons why a business might remain small.
11 Define ‘unlimited liability’.
12 Define ‘joint venture’.
13 Define ‘public limited company’.
14 Identify two features of private sector organisations.
15 Define ‘SMART objectives’.
16 Define ‘business stakeholder’.
17 Define ‘social enterprise’.
18 Define ‘mixed economy’.
19 Identify two objectives of public sector organisations.
© Cambridge University Press 2018 Section 1 – Revision questions 1
Cambridge IGCSE and O Level Business Studies
Four-mark questions
1 With the aid of examples, explain the difference between a ‘need’ and a ‘want’.
2 Outline two factors of production.
3 Outline how a restaurant might achieve specialisation of labour.
4 Outline two disadvantages of specialisation to employees.
5 Outline two ways a business could increase value added.
6 With the aid of examples, explain the difference between primary sector and tertiary sector business activity.
7 Using oil as an example, explain the relationship between primary and secondary sector business activity.
8 Outline two differences between unincorporated and limited liability businesses.
9 Outline two features of a business plan.
10 Outline two reasons why governments might support business start-ups.
11 Outline two problems of measuring the size of a business.
12 Outline two ways of achieving external growth.
13 Outline two reasons why the owner of a business may not have growth as an objective.
14 Outline two benefits to a sole trader of becoming a partnership.
15 Outline two advantages of a franchise.
16 Outline two disadvantages of a public limited company.
17 Outline two advantages to businesses of forming a joint venture.
18 Outline the importance of profit to any two business stakeholders.
19 Outline the main difference between the objectives of a social enterprise and other private sector businesses.
20 Outline two differences between the objectives of private sector and public sector organisations.
© Cambridge University Press 2018 Section 1 – Revision questions 2
Cambridge IGCSE and O Level Business Studies
Six-mark questions
1 Ben is a professional photographer. He has a studio where he takes photographs of individuals and family
groups. Ben’s business has been successful and he believes this is due to setting SMART objectives.
Ben enjoys the benefits of being his own boss but as a sole trader he sometimes worries about the
disadvantages of this form of business organisation. He is wondering if he should change his business into a
private limited company.
a How important are SMART objectives to the success of Ben’s business? Justify your answer.
b Explain two benefits to Ben of being a sole trader.
c Do you think Ben should become a private limited company? Justify your answer.
2 Outdoor Living is a private limited company owned by four members of the Mitchell family. They manufacture
garden furniture such as tables and chairs. All of their products are made from wood. The younger members of
the Mitchell family are keen to set growth as a business objective, but their father, Andrew, the chief executive
of Outdoor Living, is less keen to do so.
a Explain two ways Outdoor Living might increase the value added of its products.
b Explain one advantage and one disadvantage to the owners of Outdoor Living of being a private limited
company.
c Do you think the directors of Outdoor Living should set growth as an objective? Justify your answer.
© Cambridge University Press 2018 Section 1 – Revision questions 3
