June 2015 Unit 2
June 2015 Unit 2
June 2015 Unit 2
Instructions
• Use black ink or ball-point pen.
• Fill in the boxes at the top of this page with your name,
centre number and candidate number.
• Answer all questions in Section A and Section B.
• Answer the questions in the spaces provided
– there may be more space than you need.
• may use a calculator.
You
Information
• The
The total mark for this paper is 70.
• – usemarks for each question are shown in brackets
this as a guide as to how much time to spend on each question.
• written communication
Questions labelled with an asterisk (*) are ones where the quality of your
will be assessed
– you should take particular care on these questions with your spelling, punctuation
and grammar, as well as the clarity of expression.
Advice
• Read each question carefully before you start to answer it.
• Try to answer every question.
• Check your answers if you have time at the end.
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©2015 Pearson Education Ltd.
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SECTION A
Answer ALL questions in this section.
Write the letter of your chosen answer in the box and explain your choice in the space provided.
You should spend 30 minutes on this section. Use the data to support your answers where
relevant. You may annotate and include diagrams in your answers.
1 (a) In April 2013 the UK unemployment rate was 7.9%.
Which one of the following activities is associated with structural unemployment?
(1)
A Catering
B Mining
C Hairdressing
D Tourism
Answer
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2 (a) Showcase is one of the largest multiplex cinema chains in the UK.
Which one of the following is most likely to exist in an oligopolistic market, such
as that for multiplex cinemas?
(1)
A Low barriers to entry
B Homogenous products
C Non-price competition
D Perfect knowledge
Answer
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3 (a) A Regus survey of 4,000 UK companies found that 80% of companies offered
flexible working to their employees.
Flexible working is most likely to lead to a decrease in
(1)
A employee morale
B productivity
C labour turnover
D empowerment
Answer
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4 (a) Despite an uncertain economic climate, new car registrations in the UK increased
year-on-year by 9.3% in July 2012.
Which one of the following is least likely to reduce uncertainty for the car industry?
(1)
A Research and development
B The use of macroeconomic indicators
C Planning
D Fluctuating oil prices
Answer
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5 (a) Employees of Weeks Agricultural Trailers only work from 8.00am to 4.00pm.
Which of the following would be most likely to increase capacity utilisation at
Weeks Agricultural Trailers?
(1)
A Increasing working hours
B Increasing the price of the agricultural trailers
C Buy or rent larger premises
D Reduce the level of stock held
Answer
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6 (a) In July 2012, ASDA cut the price of four pints of milk from £1.18 to £1, which was
below the cost of production for dairy farmers.
The most likely reason for ASDA to sell milk below the cost of production is to
increase
(1)
A the number of dairy farmers
B market share
C diseconomies of scale
D profitability of dairy farmers
Answer
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SECTION B
Answer ALL the questions in this section.
You are advised to spend 45 minutes on this section.
Evidence A: Up to 40% of High Street shops ‘could close over next five years’
In a recent report by Deloitte, 40% of shops in the UK will close by 2017 as consumers
increasingly reject traditional shops in favour of online shopping. Analysts state that the
majority of UK retailers, such as Halfords and Argos, will have to close 30–40% of their
shops to remain competitive. Electrical retailer, Dixons, is already reducing the number of
its shops from 650 to 450. 5
Causes of high street decline include increasing shop rents, a movement away from
music and film retailing to downloads, and most importantly, an increase in all online
sales. Some retailers employ more technology: Burberry use big screen previews instore,
and provide iPads for customer use. Ocado and Tesco have developed apps allowing
customers to order groceries on the move. Department stores such as Debenhams offer 10
‘click and collect’ where shoppers order online and pick up from the shop of their choice.
E-retailing now accounts for 17% of total UK retail sales and is likely to increase. Marks &
Spencer’s 2012 first quarter results showed general merchandise sales, 90% of which is
clothing, falling by 6.8% after being left behind by online competitors.
The UK Government commissioned retail expert Mary Portas to review UK high streets, 15
where vacant town centre shops reached 14.8% in June 2012. Her recommendations
included: operating town centres like businesses, with team managers; encouraging
large retailers to support the high street; reducing business rates and providing cheap car
parking.
In the town of Eccles the shop vacancy rate is 29.7%. Two of the town’s prime retail units 20
are engaged in a bargain basement price war. A pound shop that was undercut by a new
rival, calling itself the 89p superstore, has responded by rebranding itself the 85p store.
(Source: adapted from http://www.guardian.co.uk/business/2012/mar/20/
high-street-shops-close-deloitte/print by 20 March 2012)
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7 Explain one likely reason why some small businesses on the high street can still
survive despite the lack of economies of scale.
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8 Explain, using the concept of the long tail, why there has been a decline in high street
music retailers such as HMV.
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9 Fewer UK businesses want to open high street shops.
Using a supply and demand diagram, illustrate and explain the likely effect of this on
rental prices of high street shops.
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10 A double dip recession in the UK, coupled with a gloomy outlook predicted by the
Bank of England into 2014, means the future of the high street looks very uncertain.
Assess how retailers on the high street could be affected by a recession in the UK.
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11 Evaluate the view that Hilco should manage HMV using a centralised structure.
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*12 Mary Portas has made many recommendations to stop the decline of UK high streets.
Evaluate the impact of this decline on
(a) consumers.
(7)
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(b) retailers.
(7)
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