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1. (a) What is meant by an ‘Opportunity Cost’?

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(b) Give one advantage and one disadvantage of being an Entrepreneur?

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(c) What are the characteristics of a successful ‘Entrepreneur’?

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(d) Define ’Private Sector ‘and ‘public sector’? Give examples.

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(e) Explain three types of integration? Give examples

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(f) Define ‘Private Limited Company’? Write one advantage and one disadvantage for the same.

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(g) Define “Market Share”? Also find the market value of company a using the formula. If
company A has a sale of $35 million in one year and if the total value of sales in market is
$125, calculates the percentage of market share of company A?

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2. Sarah set up a business as a sole trader running a nursery for small children too young to go to
school. The business is successful and has opened a number of new nurseries. Sarah took on a
business partner in 2007. Growth has continued and now the business has 10 nurseries in
different towns and villages. Sarah is planning to open another nursery and is looking for a
suitable location.

(a) What is meant by the term ‘sole trader’?

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A nursery school is classified as a tertiary sector activity. Identify two other examples of
businesses that are also in the tertiary sector.

Example 1: ………………………………………………………………………………………....

Example 2: ………………………………………………………………………………………. [2]

(b) Identify and explain two advantages to Sarah of having a business partner.

Advantage 1: ……………………………………………………………………………………….

Explanation: ………………………………………………………………………………………..

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Advantage 2: ……………………………………………………………………………………….

Explanation: ………………………………………………………………………………………..

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(c) Identify and explain three factors Sarah should consider when choosing a suitable location for
a new nursery.

Factor 1: …………………………………………………………………………………………….

Explanation: ………………………………………………………………………………………..

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Factor 2: …………………………………………………………………………………………....

Explanation: ………………………………………………………………………………………..

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Factor 3: …………………………………………………………………………………………….

Explanation: ………………………………………………………………………………………..

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(d) Do you think that it would be a good idea for Sarah to continue to expand her business?
Justify your answer.

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3. If we started exploring for oil in this national park all stakeholders will benefit and there will be no
conflict between them, said myriam, the Chief Executive of Sure Oil. This Public limited company
is one of the most profitable oil businesses in the country. The workers are well paid and the
government receives high tax revenue from Sure Oil. Some customers think that they pay too
much for petrol from Sure Oil garages.

(a) What is meant by ‘public limited company’?

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(b) Identify two of Sure Oil’s stakeholders groups other than shareholders.

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(c) Identify and explain two objectives that the directors of Sure Oil could set for this company
other than making profit.

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(d) Identify and explain two benefits to Sure Oil of being profitable.

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(e) Do you agree with Mayriam that all stakeholders will benefit and there will be no conflict
between them if Sure Oil starts exploring for oil in the national park? Justify the answer.

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4. Jo owns a small shop selling take away meals in country P which has a mixed economy. The
Shop is called ‘Best Food’. She buys in food supplies such as pies and soups from Food sure, a
food processing business. Most of the meat and vegetables used by Food sure supplied by local
farmers. They transport their produce to Food sure and other food Processing business on the
rail system, which is owned and controlled by the state in country P Food, sure was recently sold
by the government as part of its privatization program.

(a) What is meant by ‘mixed economy’?

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(b) What is meant by ‘Privatization”?

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(c) Identify and explain for any two businesses in the given case above, which sector of business
they operate in.

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(d) Identify and explain two possible reasons why the secondary sector is declining in Importance
in country P.

Reason 1: ……………………………………………………………………………………………

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Reason 2: ……………………………………………………………………………………………

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(e) Do you think shops such as Best Foods should be in the private sector or public sector of the
economy? Justify your answer.
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END OF PAPER