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CAIE A-Level Business AS 1.2 Business Structure Questions

Practise business structure questions on economic sectors and ownership forms using definitions, features and case-based analysis.

Syllabus
2026–2028
Course
Business 9609
Level
AS

Exam points

  • distinguish primary, public and quaternary sector activity using business examples

Covered syllabus points

1.2.1—Economic sectors1.2.2—Business ownership

Question 1

[Maximum number: 2]

Define the term quaternary sector.

Question 2

[Maximum number: 1]

Post Scent (PS)

PS is a private limited company operating in country H . It sells perfume for men and women using its own website. PS purchases the perfume in large quantities from various manufacturers and then sells it in smaller quantities to its customers. Most of the perfumes are sold in glass bottles.

PS has two main ways in which it sells perfume:
- A website where customers can purchase a range of perfumes. The perfumes are priced to be lower than high street competitors.
- A subscription service where customers pay a monthly fee for a mystery perfume to be delivered each month.

All of PS's products are delivered to customers' homes using the postal service. The packages can be left in a mailbox or in a safe place outside of the home. PS has an aim to improve the sustainability of its operations.

PS uses incremental budgeting. Table 1.1 shows the budgeted and actual cost and revenue data for 2023.

Table 1.1 Budgeted and actual cost and revenue data for 2023 (\$000)

Table 1.1 Budgeted and actual cost and revenue data for 2023 (\$000)

The directors of PS have decided that the business needs a Marketing Manager. The role

The directors have shortlisted five suitable applicants and plan to invite them all to an assessment centre as part of the recruitment process.

Identify one feature of a private limited company.

Question 3

[Maximum number: 12]

ML Computers (MLC)

MLC is a successful private limited company that has been trading for 20 years in country K. The company makes a range of laptop computers. It is the market leader in a highly competitive market.

MLC is developing a new touchscreen computer that will use the latest technology. Initially secondary market research was carried out, followed by primary market research. The market research data suggested a high potential demand for the new touchscreen computer.

The Marketing Manager is planning the launch of the new touchscreen computer using price skimming.

All computers are made in MLC's two factories in country K. Operations are capital intensive. New machinery is needed to manufacture the new touchscreen computer. Maria, the Managing Director, decided to use leasing for the new machinery.

MLC has 350 employees. One of its objectives is to reduce labour turnover to 8% by 2026.

Labour turnover rates currently vary across the two factories. The labour turnover for Factory A is currently 14%. Table 2.1 shows employee data for Factory B.

Table 2.1 Employee data for Factory B

Table 2.1 Employee data for Factory B

Maria is the majority shareholder with 55% of shares. She is concerned about the future growth of the company. Over the next three years she plans to launch five new computers using the latest technology. At a recent board meeting Maria proposed that the company changes the ownership of the business to a public limited company.

Evaluate whether MLC should change from a private limited company to a public limited company.

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