Instructions:
-
Carefully review all given instructions and past paper guidelines before starting each practice session.
-
Attempt the past paper questions independently first, just as in an actual exam environment.
-
Use a notebook or exam-style sheets to write your answers. Ensure your work is neat, clearly labeled with question numbers, and follows proper exam format.
-
After completing each section, check your answers using the provided marking schemes and examiner reports (if available).
-
Review your mistakes and rewrite incorrect answers to improve accuracy and exam technique.
-
If you find any questions difficult or unclear, watch the video given below for that paper. In that video, each paper is discussed in detail.
-
If you still face difficulties or have doubts after watching the video, note them down and discuss them with your instructor or course coordinator for clarification.
-
Revise question-solving strategies and repeat similar past paper questions to strengthen your understanding and performance.
Click Here to download the Video Handout
Hi everyone, welcome to class. Today we’re going through an O Level Business Studies Paper 1 based on four case studies: Paolo’s Cake Business, TBX the Steel Manufacturer, Country X’s economy, and TFN the Travel Business. This paper covers several key topics like working capital, sustainability, economic sectors, and motivation. By the end of this lesson, you’ll know how to write full-mark answers for every type of question on this paper.
Let’s start with Question 1(a), which asks you to define working capital. You can say that working capital is the capital available to a business for its daily operations. It’s calculated as current assets minus current liabilities and helps a business meet its short-term obligations like paying bills and wages. Remember, for definition questions, always include both the meaning and a simple explanation to secure two marks.
Now in Question 1(b), you’re asked to calculate the average revenue per day. The formula is straightforward: price multiplied by quantity. So, six dollars per cake multiplied by fifty cakes gives you three hundred dollars. Always show your working step by step, because in these questions, one mark is for the correct method and one for the final answer.
Next, Question 1(c) asks you to outline two reasons why packaging will be important for Paolo’s business. The first reason is that packaging helps protect cakes during transportation, keeping them fresh and undamaged when they reach wholesalers. The second reason is that packaging makes the product more attractive to customers, helping it stand out and build a brand image. When you see an “outline” question, give the point and one short explanation — that’s the perfect structure.
In Question 1(d), you need to explain one advantage and one disadvantage of using crowdfunding as a source of finance. The main advantage is that Paolo can raise money from many small investors without needing to repay it, which helps cash flow. However, the disadvantage is that crowdfunding requires strong marketing and can fail if people don’t show interest. To score full marks, always give a clear example or a short explanation in the business context.
Moving on to Question 1(e), you’re asked whether selling to a wholesaler is the best channel of distribution for a start-up business. Selling to a wholesaler provides steady demand and bulk sales, which can be very useful when a start-up has limited marketing reach. However, the downside is that wholesalers buy at lower prices, so Paolo’s profit margins will shrink, and he’ll have less control over how his cakes are presented to customers. The best answer here is to say it depends on Paolo’s goal: if he wants quick and consistent sales, wholesalers are a good option, but for long-term brand building, selling directly to consumers might be better.
Let’s move on to Question 2, which focuses on TBX, a steel manufacturer. Question 2(a) asks you to identify two ways business activity can impact the environment. You can write pollution from factory emissions and resource depletion caused by mining raw materials. That’s one mark for each point, so keep it brief and precise.
In Question 2(b), you’re asked for two ways a business can contribute to sustainable development. You can say that TBX could use renewable energy sources like solar power or wind energy and also implement recycling systems to reuse steel waste. These small, realistic examples are what make your answer stand out.
Now, Question 2(c) asks you to outline two possible economies of scale TBX might benefit from. The first is purchasing economies, which means buying raw materials like iron ore in bulk at discounted rates. The second is technical economies, which means using advanced machinery to produce large quantities at a lower cost per unit. To get all four marks, remember to name each type and give a short business example for each.
In Question 2(d), you need to explain two possible problems of holding too much inventory. The first problem is higher storage costs. A company with a lot of inventory will need extra space, which increases rent, security, and insurance expenses. The second problem is the risk of inventory becoming obsolete or damaged. For example, if demand falls or materials rust, TBX could face major losses. Both points should clearly show how the issue affects the business.
Now, Question 2(e) asks whether quality control is the best method to achieve quality production. Quality control checks finished products for defects, so it helps maintain standards before goods reach customers. But it’s not perfect because it detects problems after production, which can lead to waste. Quality assurance, on the other hand, focuses on preventing defects during production. So the best approach is a mix of both — checking quality throughout the process and at the end. Always end evaluation questions with a balanced conclusion like this.
Next, we move to Question 3, based on Country X. Question 3(a) asks you to define public sector. You can say the public sector includes organisations owned and operated by the government, such as schools, hospitals, or transport services. For Question 3(b), define Gross Domestic Product, or GDP, as the total monetary value of all goods and services produced within a country during one year.
For Question 3(c), you’re asked to identify four types of business organisation in the private sector. The correct answers are sole trader, partnership, private limited company, and public limited company. Each name earns one mark, so make sure your list is accurate and clear.
In Question 3(d), you must explain two reasons for the changing importance of the primary sector in Country X. The first reason is technological advancement. Modern machines reduce the need for human labour, making agriculture and mining less dominant. The second reason is a shift toward manufacturing and services. As countries develop, more people move to secondary and tertiary industries, which boosts GDP and reduces dependence on farming. Use the data from the question paper to support your explanation if available.
Finally, Question 3(e) asks whether the benefits of having multinational companies in a country are always greater than the drawbacks. Multinationals bring investment, jobs, and new technology, which can strengthen a country’s economy. But there are also disadvantages, such as low wages for workers, profits being sent back overseas, and harm to local firms that can’t compete. The best conclusion is that it depends on how the government regulates these companies — if managed properly, benefits can outweigh drawbacks.
Now let’s discuss Question 4, which is about TFN, a travel business. Question 4(a) asks for two advantages of customer loyalty. Loyal customers increase repeat sales and reduce the need for heavy advertising, which saves money. That’s one mark per point, so just state them clearly.
For Question 4(b), you need to identify two hygiene factors from Herzberg’s two-factor theory. The correct answers are salary and working conditions. Hygiene factors don’t motivate people directly, but poor ones can cause dissatisfaction.
Question 4(c) asks you to outline two reasons why profit might be important for TFN. You can say that profit allows the business to reinvest and expand, and it also attracts new investors by showing financial strength. Both points show clear understanding of business growth and investment.
In Question 4(d), you need to explain one advantage and one disadvantage of managers having a wide span of control. The advantage is faster communication and decision-making because fewer management layers make operations smoother. The disadvantage is that managers can become overworked when supervising too many employees, which may lower efficiency. Always link your points back to business performance for higher marks.
Lastly, Question 4(e) asks if off-the-job training is the best method for a service business. Off-the-job training provides structured, expert-led learning that can improve customer service and professional skills. However, it’s expensive and may lack practical experience. On-the-job training lets employees learn by doing, which is cheaper and more relevant. So, a combination of both methods is usually the best for service firms like TFN.
Let’s wrap up with a quick summary. For definition and identification questions, be short and clear. For outline and explain questions, write one point and one consequence. For evaluation questions, always present both sides and finish with a balanced judgement. Use real business names like Paolo, TBX, and TFN in your answers to show application. And remember: one clear idea equals one mark. With this structure, you can easily tackle any O Level Business Studies paper and earn top grades.
Press “Mark As Complete” Button To proceed
—————————————————————————————————————
