Download commerce topical questions and more Schemes and Mind Maps Trade and Commerce in PDF only on Docsity!
Compiled by Carol Dandira 2023
• production
- a.Identify the three stages of production shown in A, B and C in Fig. 1. [3] (b) (i) Who is the person that you would expect to find at the end of the chain of production in D in Fig.1? [1] (ii) Explain why this person is important. 4 (d) Choose two other aids to trade and show how they might assist the selling of furniture. [
- (a) ‘Aids to trade assist both primary and secondary industries.’ (i) Using examples, distinguish between primary and secondary industry. [4] (ii) Explain how two aids to trade may assist both primary and secondary industry. [10] (b) Explain the advantages of specialisation for a manufacturer of shoes. [6]
- (c) Should individuals specialise in particular occupations? Give reasons for your answer.
- Arthur is a farmer who owns a herd of beef cattle. Arthur sells his cattle directly to local butchers. (a) Identify which sector of production Arthur is involved in.
- KML has always sold directly to retailers, but has now been approached by W Wholesale Ltd, which wants to become its sole distributor. W Wholesale Ltd is a long established business distributing goods throughout the country. KML is in the secondary sector of production while W Wholesale Ltd is in the tertiary sector. Explain two ways in which businesses in these sectors are interdependent. [4]
- Commerce consists of trade and aids to trade. (a) Giving examples, explain what is meant by trade. [4] (b) State two aids to trade. [2] (c) ‘Without aids to trade, commerce could not take place.’ Do you agree with this statement? Give reasons for your opinion. (6) The tertiary sector is part of production. (i) Explain the term tertiary sector. [2] (ii) Giving an example, explain the term direct services. [2] (iii) Using examples, explain two ways in which direct services assist commercial services. [4]
• retail trade
- (a) (i) State two characteristics of a supermarket (ii) Explain why supermarket shopping has grown in importance in recent years. [8] (b) Explain why there are still many small shops selling food, given the growth in supermarket shopping. [10]
- Fig. 5.1 shows self-service checkouts that a supermarket chain has introduced into its stores. This is part of its new technology developments.
whether or not it would have been better for her to buy the dress from the retail store. Give reasons for your answer. [6]
- (d) Circle the correct answer to complete each of the following sentences. Placing a trademark on a product is called branding OR barcoding. Speciality stores sell a wide range of products OR one type of product. [2] Explain two disadvantages to a customer of shopping online.
- A nationwide supermarket company is planning to open a new superstore (hypermarket). There are two possible locations, Site A and Site B: Site A a city-centre site that provides enough room for the store, with access to a multi-storey car park but with no extra land for expansion Site B an out-of-town site with plenty of land and good road access to a number of surrounding towns. (a) (i) What are the differences between a supermarket and a superstore? [4] (ii) Identify two facilities that the superstore might provide for its customers. [2] (b) Why will the new superstore require only a small storage space attached to the shop rather than a large warehouse on the site? [4] (c) Which site should the nationwide supermarket choose, Site A or Site B? Give reasons for your choice, showing why you have rejected the other site. [6] (d) What will be the likely effects on small-scale retailers if the superstore is built? [4]
- Mr Wong owns a chain of department stores located in several cities in South East Asia. His business is a private limited company. (a) State two features of a department store. [2]
- The department stores are not as profitable as they used to be because of the increase in online shopping. State two reasons why people prefer to shop online rather than to visit department stores. [2]
- Mr Wong is going to introduce the following measures to try to increase his profits: setting up food courts in each of the department stores introducing loyalty cards offering weekly promotions on many goods Is it likely that these measures will be effective in increasing profits? Give reasons for your answer. [6]
• consumer credit
(a) Josephine and Boniface own a shop. They accept debit cards but not credit cards as payment for goods. (i) Explain why they have decided to accept debit cards and not credit cards. [4] (b) (ii) State and explain one possible disadvantage to their business of not accepting credit cards. [3]
- Many department stores, supermarkets, multiple chains and unit retailers are located in city shopping centres. (a) State two characteristics of: (i) department stores [2] (b) (ii) unit retailers. [2] (b) Explain why retailers are often located in shopping centres. [6] (c) Why do many multiple chain stores buy direct from manufacturers? [4] (c) Why do many consumers prefer to buy food from supermarkets rather than from unit retailers? [6]
- Lee owns a medium-sized speciality store in a large town, selling electrical supplies. He is considering accepting credit and debit cards as methods of
payment from both individual and trade customers. He offers hire purchase for larger items, such as cookers. (b) State one difference between a credit card and a debit card. [2] (c) Describe two disadvantages to individual customers of buying on hire purchase. [4] Discuss whether or not Lee should continue to allow trade credit. Give reasons for your answer. [6]
- Miah wants to buy a new games console from a retail store. She will need credit to buy this consumer durable. (a) What is meant by the term consumer durable? [1] (b) Explain two reasons why retailers offer credit. 4
- can buy the games console on her credit card or on a store card. Which do you recommend? Give reasons for your answer. (8)
- Bytezi Ltd is an international franchisor. It has franchise agreements with retail shops throughout the world. The shops are the franchisees who sell Bytezi computers. Some of Bytezi Ltd’s franchisees are concerned about the amount of goods bought by their customers using credit cards. Should they be concerned? Give reasons for your answer. [4]
• wholesale trade
1 (a) State and explain three services offered by wholesalers to retailers. [6] (b) Explain how retailers assist wholesalers. [3] (c) Explain why few wholesalers operate retailing businesses. [3] (d) Describe the changes in the wholesale trade brought about by the decline in importance of the independent wholesaler. [8]
- Some carpet wholesalers now sell direct to the public. Do you think this is a good idea? Give reasons for your answer. 6 Kanny Kitchens produces handmade kitchen cupboards and sells them to wholesalers and retailers. The following suggestions have been made to reduce its expenses and to increase its sales:
- import parts from Japan
- accept a contract with a wholesaler who wants to pay 30% less than the retail price for each cupboard
- open a showroom selling directly to consumers. (c) (i) The average retail price charged to consumers for a cupboard is $800. Calculate how much the wholesaler will pay for each cupboard. Show your working. [3] (ii) Although the wholesaler will pay less for each cupboard, explain why Kanny Kitchens should still consider selling to this wholesaler. [3]
• documents of trade
1.Mr Manyere owns an export business in South Africa growing and selling tomatoes for the European market. He will need to complete several documents when he exports a consignment of tomatoes to Europe. Name two documents and explain how Mr Manyere will use them. [6]
- (b) A retailer bought 100 shirts from a wholesaler for $25 each less 20% trade discount. (i) What is meant by trade discount and why is it offered by the wholesaler to the retailer? [4] (ii) Calculate how much profit the retailer would make if she sold each shirt for $35. Show your working. [4] (iii) Why might the wholesaler also offer cash discount to the retailer? [3]
(ii) Explain two ways in which a country might increase its exports. [4] (d) In connection with international trade, explain the terms: (i) entrepôt trade [2] (ii) freeport. [2] The supermarket imports much of its perishable stock from overseas suppliers. Evaluate two difficulties faced by the supermarket when using this supply chain. Give reasons for your answerThe supermarket imports much of its perishable stock from overseas suppliers. Evaluate two difficulties faced by the supermarket when using this supply chain. Give reasons for your answer
- ZZ Company is a manufacturer of carpets and rugs. 70% of its sales revenue comes from exporting its products. (a) (i) Explain why governments encourage businesses to export their products. [4] (ii) How important is distance when exporting? [3] (iii) Identify one other problem that ZZ might face when exporting its products. [1] (d) ZZ Company would like to export to a large South American country. Should it use its own sales staff or appoint agents in the country? Give reasons for your opinion. [6]
- Many businesses prefer to trade in their home country because of the difficulties involved in exporting, such as methods of payment. (a) Describe one way in which home trade is similar to international trade 2 (b) Explain two difficulties, apart from methods of payment, faced by exporters. 4 (c) Evaluate two factors that exporters should consider to ensure they receive payment. Which do you think is the more important factor? Give reasons for your answer. 6
- Kanny Kitchens produces handmade kitchen cupboards and sells them to wholesalers and retailers. The following suggestions have been made to reduce its expenses and to increase its sales:
- import parts from Japan
- accept a contract with a wholesaler who wants to pay 30% less than the retail price for each cupboard
- open a showroom selling directly to consumers. (a) (i) Explain two possible advantages to Kanny Kitchens of importing parts from Japan. [4] (iii) Explain how the work of the Customs Authorities might affect Kanny Kitchens when importing parts from Japan. [4]
- Bytezi Ltd is an international franchisor. It has franchise agreements with retail shops throughout the world. The shops are the franchisees who sell Bytezi computers. Explain how Bytezi Ltd is involved in international trade. [4]
• advertising
- (a) Explain two disadvantages of advertising to each of the following: (i) the consumer [4] (ii) the advertiser [4]
- (i) Why might a chain of shoe shops use a newspaper to advertise its latest special offers? [3] (ii) Why might a manufacturer of cooked meats use television rather than leaflets to advertise a new brand? [4] (e) Explain how an advertising agency might assist a manufacturer to advertise. [5]
- Mrs Chiri wishes to advertise her new clothing shop.
(a) State and explain three general factors Mrs Chiri will need to consider when choosing suitable media to advertise her shop. [6] (b) (i) Mrs Chiri hopes to use persuasive advertising and informative advertising. Explain how Mrs Chiri might use these kinds of advertising for her clothes shop. [6] (ii) Explain what is meant by collective advertising and give possible reasons why Mrs Chiri will not use this kind of advertising. [4] (f) Name two media suitable for advertising the new clothing shop. Give a reason for each of your choices. [4]
- B Bus Company plc operates in the private sector. It has recently been given the right to compete with the government-owned State Bus Company on bus routes in a major city. (d) The State Bus Company is about to have competition from B Bus Company plc. Discuss the best ways in which the State Bus Company can face this competition. [6]
- Fig. 4.1 shows an advertisement in a golf magazine for the reopening of a Golf & Spa Hotel
What do you think would be the best method of communication for Lee to use with the customers who owe him money? [3]
- X Trading Ltd (XTL) exports kitchen equipment worldwide. The kitchen equipment is purchased from various manufacturers nationwide and collected in its own transport. (i) State one form of communication that XTL could use when negotiating a sale with the importer in another country. [1]
- Identify the most suitable method of communication that a hotel would use for each of the following: (i) to confirm room bookings. [1] (ii) to inform guests of health and safety instructions. [1]
Many limited companies operate in the global economy. Using examples, explain why communication is important to them when trading both at home and abroad. 6
• transport
- Explain how transport may assist the production of furniture 6
- Mr Manyere owns an export business in South Africa growing and selling tomatoes for the European market. (a) Name two methods of transport he might use for his business. Give reasons for each of your choices. [8]
- Airports offer many facilities both for air cargo and for passengers. (a) (i) Name two services provided at airports for passengers. [2] (ii) List three facilities provided at airports for the handling of cargo. [3] (b) Explain three factors which have encouraged firms to use air transport for their freight. [9] (c) Many new airports are built at some distance from the cities they serve. Name and describe how two methods of transport might be used between a city and its airport. [6]
- (d) Circle the correct answer to complete each of the following sentences. An increased number of motor vehicles is a cause of global trade OR global warming. Imported car parts will often be stored in a manufacturer’s warehouse OR cold storage warehouse. [2] (5. (d) Sports clubs need to consider several factors, such as the nature of the equipment to be carried, before deciding to send their equipment by air transport. Evaluate two other factors sports clubs should consider before choosing air transport to send their equipment. Give reasons for your answer.
- Arthur is a farmer who owns a herd of beef cattle. Arthur sells his cattle directly to local butchers Explain how transport might assist Arthur. [4]
- X Trading Ltd (XTL) exports kitchen equipment worldwide. The kitchen equipment is purchased from various manufacturers nationwide and collected in its own transport. (a) Explain two benefits of XTL using its own transport for collections. [4] (b) Discuss whether or not XTL should use containers to export the kitchen equipment. Give reasons for your answer. [6]
- B Bus Company plc operates in the private sector. It has recently been given the right to compete with the government-owned State Bus Company on bus routes in a major city.
Use the diagram shown in Fig. 1 to help you answer the following questions. (a) Explain the benefits of the pooling of risk to the 500 companies. [3] (i) Calculate the total premiums paid to the insurance company for fire insurance. Show your working. [2] (ii) Apart from paying claims, state two other uses for the insurance premiums. [2] (c) Explain how the principle of insurable interest applies to each of the 500 companies. [4] (d) (i) Name three other business risks against which the 500 companies might insure. [3] (ii) Explain why it is important that the companies insure against these risks. [6]
- Fig. 1.1 is a table of annual insurance premiums for motor cars based on occupation. Use Fig. 1.1 to help you answer the following questions. (i) What is an insurance premium? (b) Explain two factors, apart from occupation, for the high premiums charged to students for motor car insurance.
- Arthur is a farmer who owns a herd of beef cattle. Arthur sells his cattle directly to local butchers
Arthur wants to insure the buildings and machinery on his farm. (i) Describe two risks he could insure against. [4] (ii) Explain why it is important for Arthur, when applying for insurance, to observe the insurance principle of utmost good faith. [3] (iii) Arthur has received an insurance policy. State two purposes of this document. [2]
- A carpet wholesaler wishes to insure its warehouse and stock against the risk of fire and theft. Fig. 2.1 shows the annual insurance premiums quoted for this. Value/$ Annual premium warehouse 760 000 $1 per $ stock 622 000 $5 per $ Fig. 2.1 Insurance premium quotation Use Fig. 2.1 to help you answer the following questions. (a) (i) Calculate the total annual fire and theft premium for warehouse and stock. Show your working. 3 (ii) Explain why the insurance premium for stock is higher than for the warehouse. 3 (5)
• the business unit
- Mrs Annoh owns a successful small business selling mobile phones to business people. (a) Explain two advantages of owning your own business. 4 (b) Mrs Annoh wishes to expand her business. State two ways in which Mrs Annoh might do this. Explain the benefits of each. [6]
- (e) Explain three advantages to the business of being a limited company. [6]
- Tinashe and Dambudzo are in partnership selling computers. They are considering changing their business into a private limited company. (a) State four features of a partnership. [4] (b) What are the advantages to Tinashe and Dambudzo of changing their partnership into a private limited company? [6] (c) Many of their clients are small businesses. Explain how a small business may benefit from using computers. [10]
- Wasi is a self-employed photographer, working from home. He uses mobile banking for most of his payments. (a) Identify a form of business organisation that Wasi could set up
- B Bus Company plc operates in the private sector. It has recently been given the right to compete with the government-owned State Bus Company on bus routes in a major city. (a) (i) Name another form of business organisation that operates in the private sector. [1] (ii) Explain two differences between the private and public sectors. [4] (b) Do you think it is beneficial for the B Bus Company to be a public limited company? Give reasons for your answer. [4]
- Cheese4U, maker of speciality cheeses, would like to expand its business. It is considering franchising. Discuss whether or not you would recommend franchising. Give reasons for your answer.
- Bytezi Ltd is an international franchisor. It has franchise agreements with retail shops throughout the world. The shops are the franchisees who sell Bytezi computers. (a) (i) State two benefits to Bytezi Ltd of operating franchised retail shops. [2] (ii) State two benefits of being a franchisee of Bytezi Ltd. [2]
- Mr Wong owns a chain of department stores located in several cities in South East Asia. His business is a private limited company. Explain how changing from a private limited company to a public limited company might affect Mr Wong’s business. [4]
• finance
- Josephine and Boniface wish to obtain a refrigerator for use in their shop. They are considering purchasing or leasing the refrigerator. (i) Explain the benefits of A purchasing the refrigerator and B leasing the refrigerator. [6] (ii) If they lease the refrigerator, the leasing company will charge $2000 + 40% per year. Calculate the monthly charge for Josephine and Boniface. Show your working. [3]
- Fig. 2 shows the profit and loss account of a limited company called Penny Ping Enterprises Ltd Use Fig. 2 to help you answer the following questions. (a) Calculate: (i) the cost of goods sold [1] (ii) net profit. [1] ( b) (i) Explain the term ‘sales revenue’. [2] (ii) Explain the term ‘net profit’ and show why it is important to the owners of the business. [4] (c) Calculate the net profit in relation to sales revenue. (Show your working and give your answer as a percentage.) [2] (h) Explain two ways in which Penny Ping Enterprises Ltd might improve net profit. [4]
- (a) State the method of payment you would use for each of the following transactions. In each case choose a different method of payment. Give two reasons for each of your choices. (i) payment for sweets from a ‘tuck shop’ or street trader [3] (ii) purchase of a pair of trousers costing $100 from a department store [3] (iii) the electricity bill which is paid every three months. [3]
- (a) Giving examples, explain what is meant by legal tender. [4] (b) You have the following methods of payment available: BANK DRAFT BANK GIRO CHEQUE ELECTRONIC/CABLE TRANSFER Which method would you choose to make the following payments? Give two reasons for each of your choices. (NB Do not choose the same method of payment twice.) (i) buying a new computer (ii) moving US$10 000 from USA to Australia (iii) paying the workers of your company [9 (c) (i) In what circumstances would you choose to pay a debt by direct debit rather than by standing order? [4]
possible solutions are: • Offer a discount of 20% if customers buy 10 cakes. Each cake costs $3. • Pay someone $600 to design a website to advertise her cakes and meat pies. Discuss each of these solutions. Recommend a course of action. Give reasons for your answer 8 marks (c) Wasi wants to work from a purpose-built studio in the garden of his home but he does not have enough finance from his own savings to buy the studio. (i) Explain one reason why obtaining finance might be difficult for Wasi. (2) (iii) Do you think a loan would be the most suitable source of finance for Wasi to choose? Justify your answer. (6)
- ZZ Company is a manufacturer of carpets and rugs. 70% of its sales revenue comes from exporting its products. (i) Explain what is meant by sales revenue. [2] (ii) Describe two ways in which ZZ Company could improve their sales revenue. [4]
- T Toys Ltd makes toys. It has outgrown its factory and is looking for a new one. Explain two sources of long-term finance that would be suitable for the purchase of the new factory. [4]
- Bepe has recently left college and obtained her first job. Her employer has recommended that she should open a savings account and a current account at a bank. (a) (i) Explain two benefits to Bepe of having a savings account. [4] (ii) Explain two differences between a direct debit and a standing order. [4]
- (d) The importer sells some of the kitchen equipment direct to the public. (i) Calculate the price of kitchen equipment to the consumer when the cost to the importer is $55 and he needs to make a mark-up of 30%. [3] (ii) The importer has surplus stock. Suggest two ways in which he can dispose of it. [2]
In 2019, the hotel’s sales turnover was $1900000. The cost of goods sold was $575000 and the expenses were $835000. Calculate the net profit. Show your working. (3) b. The directors of the Golf & Spa Hotel would like to increase its net profit. Which would be the more effective method, improving marketing or reducing expenses? Give reasons for your answer (6)
Use the information given in Fig. 1 to help you to answer the following questions.
