UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Ordinary Level

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1 * * UNIVERSITY OF MRIGE INTERNTIONL EXMINTIONS General ertificate of Education Ordinary Level OMMERE 7100/12 Paper 1 Multiple hoice May/June hour dditional Materials: Multiple hoice nswer Sheet dditional Materials: (not provided by IE) Soft clean eraser Soft pencil (type or H is recommended) Ruler Protractor RE THESE INSTRUTIONS FIRST Write in soft pencil. o not use staples, paper clips, highlighters, glue or correction fluid. Write your name, entre number and candidate number on the nswer Sheet in the spaces provided unless this has been done for you. O NOT WRITE IN NY ROES. There are forty questions on this paper. nswer all questions. For each question there are four possible answers,, and. hoose the one you consider correct and record your choice in soft pencil on the separate nswer Sheet. Read the instructions on the nswer Sheet very carefully. Each correct answer will score one mark. mark will not be deducted for a wrong answer. ny rough working should be done in this booklet. The businesses described in this question paper are entirely fictitious. This document consists of 11 printed pages and 1 blank page. I13 06_7100_12/4RP ULES 2013 [Turn over

2 2 1 What is an example of primary production? a baker making bread a farmer planting a new orchard a nurse looking after children a shopkeeper opening a new store 2 commerce trade X Identify X in the diagram. aids to trade direct services foreign trade home trade 3 How are commercial services and direct services inter-related? uying and selling are examples of direct services. ommercial services depend on direct services. irect services include advertising, accounting and medical services. Tertiary production consists of commerce and direct services. 4 What is the main function of a retailer? manufacturing goods for customers offering free parking to customers providing small quantities of goods to consumers selling goods in bulk to consumers ULES /12/M/J/13

3 5 Retailers sometimes issue loyalty cards to their customers. How might customers benefit from loyalty cards? 3 They can buy goods on special credit terms. They can choose from a wider range of goods than other shoppers. They can collect points which give them discounts on goods bought. They can use services like restaurants free of charge. 6 What is the main disadvantage of e-commerce to the customer? danger of credit card fraud power failure during a transaction retailer running out of stock of the items ordered wrong goods supplied by the retailer 7 Small-scale retailers survive competition from large-scale retailers by having access to credit finance. offering a personal service. providing a wide variety of goods. using expensive advertising. 8 What is the main function of a finance house? cashing cheques managing debentures offering mortgages providing hire purchase ULES /12/M/J/13 [Turn over

4 9 The document is a customer s copy of a bill for a credit card purchase. 4 7, Star Shopping entre, The ity iamondcard xxxx xxxx xxxx 1234 Exp 10/14 start 10/10 Sally Lee Sale ardholder copy Please keep this receipt for your records mount: $35 verified by pin THNK YOU /03/2013 uth ode: Who is the customer? iamondcard Krazy ays Sally Lee 10 Why might a consumer protection organisation advertise? to improve consumer awareness to inform consumers of new products to persuade consumers to buy goods to remind consumers of existing products 11 retailer is most likely to use a wholesaler when bulk orders are required by the retailer. goods are large and fragile. goods need after-sales service. the retailer has a small-scale business. ULES /12/M/J/13

5 12 Wholesalers link manufacturers and retailers by providing services. Which group of wholesaling services are provided only to retailers? 5 buying in bulk, storing goods, preparing goods for sale clearing production lines, displaying goods, warehousing giving trade discount, providing delivery services, breaking bulk providing market information, bearing risk, storing raw materials 13 small-scale manufacturer wants to export goods by sea. Who should be contacted to arrange for the transportation of the goods? bonded warehouse manager customs officer forwarding agent port authority official 14 What information would be found in a quotation? details of goods returned by a customer instructions to a carrier relating to the delivery of goods prices and terms under which the goods will be sold summary of a number of transactions 15 Which commercial document would be used to adjust the charge when a customer returns faulty goods? advice note credit note enquiry receipt 16 Which information is found on a statement of account, but not on an invoice? details of payments made names and addresses of buyers and sellers terms of payment value of goods bought ULES /12/M/J/13 [Turn over

6 6 17 trader buys goods worth $4000 and receives 20% trade discount and 10% cash discount. How much is the cash discount? $320 $400 $1200 $ The chart shows the international trade carried out by a country. Exports invisibles $300 m Imports invisibles $400 m visibles $800 m visibles $500 m What is the value of the alance of Trade of this country? $100 m $200 m $300 m $400 m 19 What is the main advantage of a trading bloc? free trade between member countries guaranteed prices to producers increased revenue from customs duties more trade with non-member countries 20 How can a country attract the imports of goods that it cannot produce itself? holding a trade fair increasing tariffs reducing customs duties using a quota system ULES /12/M/J/13

7 21 What is the main benefit to a retailer of a successful advertising campaign? 7 improving the quality of goods knowing what goods are required selling more goods than before setting the price of goods 22 This picture shows an advertisement for football boots. top goal scorer uses Which method of appeal is shown in this advertisement? feminine appeal hero worship love of a bargain social acceptance 23 How has modern technology made more rapid global communication available to businesses? It can be used 24 hours a day. It uses less paper for communication. Less people need to be employed to operate it. More people travel over long distances. 24 Sonja s business employs people who travel all over the country selling hair and beauty products. Which method of communication should she use to make daily contact with her sales employees? mobile phones poste restante sales meetings videoconferencing ULES /12/M/J/13 [Turn over

8 25 What advantage does sea transport have over air transport? 8 carries bulk loads faster turnaround of goods less risk of damaged goods quicker delivery 26 What is an advantage of containerisation? all types of goods can be carried goods are unpacked at ports goods need not be inspected by customs increased speed of loading and off-loading 27 How do low-cost airlines save money? allowing excess baggage on-board flying into main city airports providing onboard meals selling tickets online 28 Which statement applies to an air waybill? It gives title to the goods. It is a contract. It is a negotiable instrument. It is made up of four copies. 29 Which product would not normally be stored in a warehouse? butter coal maize soap ULES /12/M/J/13

9 30 What is a feature of a cash and carry warehouse? 9 all goods are refrigerated entry is limited to members goods are sold on credit location is close to an airport 31 The diagram shows the pooling of risk. insured public X make payments for losses insurance pool expenses dividends to investors Identify X in the diagram. invest funds make claims pay premiums receive policies ULES /12/M/J/13 [Turn over

10 10 32 Solomon ernez has obtained the following information from four insurance companies about insuring the shops that he owns. One shop is in rea 1 and one shop is in rea 3. uildings insurance ($) nnual premium for every $ insured Insurance company rea ead Insurance $3 $5 $8 $10 Image Insurance $4 $5 $6 $8 Modern Insurance $5 $6 $7 $8 Orion Insurance $6 $7 $8 $9 Which insurance company will offer the cheapest insurance premium to insure both shops? ead Insurance Image Insurance Modern Insurance Orion Insurance 33 What is a function of a commercial bank? collecting import duties fixing exchange rates issuing bank notes providing loans and overdrafts 34 large company wants all customers to pay their monthly accounts in full on the due date. Which method of payment would be most suitable for the company? cheque credit transfer debit card direct debit 35 lice has an overdraft facility on her current account. t the beginning of a month lice had an overdraft of $650. cheque for $150 was debited to the account and a salary of $1480 was paid in. What is the balance on the account? $1980 O $800 O $680 R $830 R ULES /12/M/J/13

11 11 36 Who owns a public limited company? board of directors employees managing director shareholders 37 Which business organisation would be most suitable for a young person who wants to start a business where training and materials are provided? franchise partnership private limited company sole trader 38 n overdraft is a suitable means of obtaining finance from a bank for building a large factory. buying stock. hiring expensive machinery. purchasing a house. 39 supermarket has decided to lease delivery vehicles rather than to buy them. What is the main reason for doing this? The insurance costs of the delivery vehicles are reduced. The supermarket owns the delivery vehicles at the end of the lease. The vehicles can be returned to the leasing company at any time. Up-to-date vehicles are provided by the leasing company. 40 uring a month a retailer buys 1000 articles for $20 each. She sells all of them with a mark-up of 30%. Her expenses total $2000. What is her turnover for the month? $ $ $ $ ULES /12/M/J/13

12 12 LNK PGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (ULES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. University of ambridge International Examinations is part of the ambridge ssessment Group. ambridge ssessment is the brand name of University of ambridge Local Examinations Syndicate (ULES), which is itself a department of the University of ambridge. ULES /12/M/J/13