Practise how government spending, legislation, trade policy and interest rates shape business costs, demand and strategic decisions.
Ocean Vibes is a boat tour business located in two tourists resorts in Portugal. During the tours, it collects wildlife research. The idea came from two young scientists, Alfredo and Pedro, who share a passion for the environment, boats and science. Ocean Vibes employs boat tour guides and a sales team in each of the two resorts.
The main goal of Ocean Vibes is to connect tourism with science. It offers dolphin and bird-watching tours to tourists and uses the boat tours to collect research data on the wildlife. Its tour guides are knowledgeable, passionate and respectful of the environment.
Customers can book the boat tours online or in the tourist resorts. They are encouraged to leave reviews on Ocean Vibes' website.
Every month Ocean Vibes provides a boat tour for students and researchers who wish to study the wildlife.
There are many other businesses offering boat tours in Portugal which makes competing in the industry a challenge.
Which one of the following is an example of a public service provided by the government?
Select one answer.
Clothing retailer
Police force
Mobile phone provider
Grocery store
B
Premier Inn wants to retain its employees so it can continue to maintain the service it provides for guests.
Explain one advantage for a country of being in a trading bloc.
A01-3 marks
Award 1 mark for an advantage for a country being in a trading bloc, plus 2 further marks for explaining the advantage, for a maximum of 3 marks.
- Businesses within a country can trade with no tariff barriers (1) This means that there will be no additional costs involved (1) therefore prices could be lower (1)
- It gives a wider choice of goods for consumers (1) as the goods move freely with no trade restrictions (1) from one country to another country (1)
NB No marks are awarded for a definition.
Answers that list three advantages why a business is in a trading bloc, with no explanation will get a maximum of 1 mark
Accept any other appropriate response.
(3)
Question
Number
Option 1: competition pricing
Option 2: promotional pricing.
Justify which one of these two options Premier Inn should choose.
Indicative content
Mark
Cadbury was founded in 1842 when John Cadbury opened a shop in Birmingham in the UK. The shop sold cocoa and drinking chocolate. Cadbury is now one of the major chocolate manufacturers in the world.
In 1918 the first overseas Cadbury factory was opened in Hobart, Tasmania in Australia. Another factory opened in South Africa in 1938. Cadbury chocolates are sold across the world and other factories have been opened. Cadbury produces many well-known brands, such as Dairy Milk, Buttons and Crunchie. It also produces ice cream and cakes.
Cadbury is now part of Mondelez, the largest snack business in the world.
Explain one advantage for businesses if banks reduce their interest rates.
A01-3 marks
Award 1 mark for identification of an advantage for a business if the banks reduce their interest rates, plus 2 further marks for explaining the reason, for a maximum of 3 marks.
- This means that if a business took out loans (1) monthly repayments would be lower (1) leaving more funds for other business expenses (1)
- If the interest rates are reduced, then customers may have more funds available (1) to spend on goods/products (1) thus increasing the turnover of businesses (1)
NB No marks are awarded for a definition.
Answers that list three advantages with no explanation will get 1 mark only.
Accept any other appropriate response.
(3)