Paper 1: May/June 2023 – 12

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

Alright class, today we’re going through the Cambridge AS Level Business Studies Paper 1 from May/June 2023.
This paper tests your understanding of basic business concepts — definitions, short explanations, and a few longer analysis and evaluation questions. It’s marked out of 40, and the key is to write short, focused, and logical answers that show clear understanding.

Let’s begin with Question 1(a). This was a 2-mark definition asking for demand. The correct definition is that demand is the quantity of a product that consumers are willing and able to buy at a certain price during a specific period of time. One mark for the idea of quantity, and one mark for linking it to price or time.

Question 1(b) asked for a factor that could influence the supply of a product. A simple example is production cost. If wages or raw material costs rise, it becomes more expensive to produce, so supply decreases. One mark for identifying, and two for explaining the impact.

Now Question 2(a) — another definition question. Factors of production are the resources used to make goods and services — land, labour, capital, and enterprise. That earns two marks if both parts are mentioned.

Question 2(b) asked for one stage of the transformational process. You could say “input,” where a business gathers raw materials and other resources before transforming them into finished goods. One mark for naming the stage, two for explaining it.

Next is Question 3(a) — define equality. Equality means treating all individuals fairly and giving them the same opportunities regardless of characteristics such as gender or background. Short, clear, and complete for two marks.

Question 3(b) asked for one benefit of a diverse workforce. The best answer is increased creativity. When people come from different cultures and experiences, they bring unique ideas, which helps problem-solving and innovation. One mark for identifying, two marks for explaining the benefit.

Then we have Question 4, a 5-mark question about stakeholder conflict. For instance, shareholders might want maximum profit, while employees might demand higher pay. If management prioritises profit, staff morale could fall, leading to lower productivity and weaker performance. To reach full marks, explain this chain of impact clearly and link it to a business situation.

Now we move to Section B, the longer structured questions.

Question 5(a) asked you to explain two benefits of government grants as a source of finance.
The first big advantage is that grants are non-repayable. Unlike loans, the business doesn’t have to return the money, which helps cash flow and reduces financial pressure. The second benefit is that grants often encourage growth and innovation. Governments usually give them to promote specific projects like research, job creation, or expansion into new areas. For example, a small bakery could use a grant to buy new ovens or develop eco-friendly packaging without taking on extra debt. To score higher marks, apply your examples to real or realistic businesses.

Then Question 5(b) is a 12-mark evaluation asking whether poor management of working capital is the main reason small retailers fail.
Let’s break it down. Working capital is the difference between current assets and current liabilities — basically the cash available for day-to-day operations. If a small retailer manages it poorly, they might struggle to pay suppliers or buy stock, leading to shortages or delays. That’s one strong reason why businesses fail. But remember, the question asks if it’s the main reason. You also need to consider other causes — maybe poor marketing, bad location, weak demand, or lack of customer loyalty. For example, even with good cash management, a shop in a quiet area with no customers could still fail.
To reach top marks, balance your argument and give a clear conclusion. A strong ending would be: while poor working capital management is a major issue, other factors like demand, competition, and customer satisfaction are equally important in determining success or failure.

Question 6(a) asked for two benefits of having a unique selling point, or USP. The first is competitive advantage — a USP helps the business stand out and stay memorable to customers. The second is the ability to charge higher prices, since customers often pay more for products they see as unique or better. For example, Apple and Starbucks both use their USPs to build loyalty and justify premium pricing. To earn top marks, explain how each benefit helps the business stay competitive and grow.

Question 6(b) is a twelve-mark evaluation on whether marketing is the most important factor in a coffee shop’s success. Marketing is vital for attracting customers and building awareness, especially for a new shop. But it’s not everything. Location, product quality, and customer experience also determine long-term success. Even great marketing can’t save poor service or bad coffee. So, your conclusion should say that marketing is key for visibility, but success also depends on quality, service, and the right location.

Press “Mark As Complete” Button To proceed