™

Cambridge IGCSE

BUSINESS STUDIES 0450/23

*9030633940*

Paper 2 Case Study May/June 2021

1 hour 30 minutes

You must answer on the question paper.

You will need: Insert (enclosed)

INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.

INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].
• The insert contains the case study.

This document has 12 pages. Any blank pages are indicated.

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1 (a) Explain four factors that may influence the location of a tertiary sector business.

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

Explanation: ......................................................................................................................

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

Explanation: ......................................................................................................................

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

Explanation: ......................................................................................................................

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Factor 4: ...........................................................................................................................

Explanation: ......................................................................................................................

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(b) Explain how the following three factors could cause Ruben’s new business to fail:

• Lack of management experience

• Insufficient working capital
• Poor planning

Which factor do you think is most important to Ruben? Justify your answer.

Lack of management experience: ....................................................................................

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Insufficient working capital: ...............................................................................................

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Poor planning: ..................................................................................................................

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Conclusion: .......................................................................................................................

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2 (a) Using Appendix 2, explain one external cost and one external benefit of Ruben’s business.

External cost: ....................................................................................................................

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Explanation: ......................................................................................................................

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External benefit: ................................................................................................................

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Explanation: ......................................................................................................................

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(b) Consider the following three possible ethical issues for Ruben’s business:

• Advertising aimed at children

• Seeking profit maximisation by paying low wages
• Only buying from local suppliers.

Which do you think will have the greatest effect on Ruben’s business? Justify your answer.

Advertising aimed at children: ..........................................................................................

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Seeking profit maximisation by paying low wages: ..........................................................

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Only buying from local suppliers: ......................................................................................

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Conclusion: .......................................................................................................................

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3 (a) Explain the possible effect of four legal controls over employment on Ruben’s business.

Legal control 1: .................................................................................................................

Effect on Ruben’s business: .............................................................................................

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Legal control 2: .................................................................................................................

Effect on Ruben’s business: .............................................................................................

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Legal control 3: .................................................................................................................

Effect on Ruben’s business: .............................................................................................

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Legal control 4: .................................................................................................................

Effect on Ruben’s business: .............................................................................................

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(b) Consider the benefits of having part-time employees or full-time employees. Which do you
think Ruben should choose for his business? Justify your answer.

Part-time employees: ........................................................................................................

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Full-time employees: ........................................................................................................

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Recommendation: ............................................................................................................

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4 (a) Explain two ways the market research data shown in Appendix 1 could help Ruben make
business decisions.

Way 1: ...............................................................................................................................

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Explanation: ......................................................................................................................

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Way 2: ...............................................................................................................................

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Explanation: ......................................................................................................................

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(b) Consider the advantages and disadvantages of the three sources of finance outlined in
Appendix 3 if Ruben chooses to buy the franchise. Which source of finance should Ruben
choose? Justify your choice using cost calculations for each source.

Bank loan 1 year: ..............................................................................................................

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Bank loan 3 years: ............................................................................................................

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Inheritance from grandparents: ........................................................................................

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Recommendation: ............................................................................................................

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