2

1 The diagram shows stages of production.

Cambridge International Examinations production

Cambridge Ordinary Level

primary secondary tertiary

COMMERCE 7100/13 X Y
Paper 1 Multiple Choice May/June 2018
1 hour What do X and Y represent?
Additional Materials: Multiple Choice Answer Sheet A commerce and direct services
Soft clean eraser
*5778865348*

Soft pencil (type B or HB is recommended) B construction and manufacturing

Ruler
Protractor C extraction and processing
D trade and aids to trade
READ THESE INSTRUCTIONS FIRST

Write in soft pencil. 2 What is an advantage of specialisation to factory workers?

Do not use staples, paper clips, glue or correction fluid.
Write your name, Centre number and candidate number on the Answer Sheet in the spaces provided A better craftsmanship
unless this has been done for you.
DO NOT WRITE IN ANY BARCODES. B fewer tools used

There are forty questions on this paper. Answer all questions. For each question there are four possible C improved skills
answers A, B, C and D.
D over-production
Choose the one you consider correct and record your choice in soft pencil on the separate Answer Sheet.

Read the instructions on the Answer Sheet very carefully.

3 Which statement shows how direct services assist industry and commerce?
Each correct answer will score one mark. A mark will not be deducted for a wrong answer.
A Advertisers promote products of industry and commerce.
Any rough working should be done in this booklet.
The businesses described in this question paper are entirely fictitious. B Banks provide finance for industry and commerce.
C Education helps to produce a skilled workforce.
D Transport moves foods and raw materials.

4 Which type of retail outlet involves selling goods from machines?

A automatic vending
B electronic point of sale
C speciality store
D street market traders

This document consists of 11 printed pages and 1 blank page.

IB18 06_7100_13/3RP
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© UCLES 2018 7100/13/M/J/18

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5 Which name is given to the buying and selling of products or services using electronic systems 8 A student wishes to buy a laptop to aid his studies.
such as the internet?
Which factor would be the most important for him to consider when deciding which type of credit
A ebanking to use?
B ecommerce A immediate ownership
C email B length of repayment period
D ereader C number of instalments
D overall total cost
6 The diagram shows goods on display.

9 The diagram shows a channel of distribution.

manufacturer
↓
wholesaler
↓
retailer
↓
consumer

Which type of product would be likely to be sold using this channel of distribution?

A bread
Where is this type of display most likely to be found? B clothing

A mail order company C jewellery

B mobile shop (van) D ships

C supermarket
10 Which service does a wholesaler provide for retailers?
D wholesale warehouse
A credit information about customers
7 A person wishes to purchase a car that is valued at $1600 cash. He pays a deposit of 5% of the B debt collection
cash price, plus 10 equal payments of $190.
C maintenance of goods
How much does he pay in total for the car?
D wide variety of goods
A $1600 B $1680 C $1900 D $1980

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11 What is the function of a broker in international trade? 14 A manufacturer makes a suit. The costs are as follows.

A bringing buyers and sellers together

$
B delivering goods to buyers
materials 30
C having possession of the seller’s goods
labour 20
D selling goods on behalf of others
overheads 30

12 Which document, prepared by the seller, shows a number of transactions and is sent to the buyer The manufacturer has a mark-up of 50% on all its retail prices.
at the end of a trading period?
What is the selling price of the suit?
A credit note
A $60 B $80 C $120 D $160
B delivery note
C invoice 15 What is entrepôt trade?
D statement of account A arranging trade between two countries
B importing duty-free goods only
13 The diagram shows an invoice.
C re-exporting goods previously imported
INVOICE D selling more cheaply abroad than at home
TD Trading Ltd
To: ABC Souvenirs Date: 28 May 2018 16 The table shows the international trade figures for a country in one year.

Order No: 3037 Invoice No: 273 $m

Terms: 5% 30 days
visible exports 500
Unit Price Cost
Quantity Cat. No. Item visible imports 400
$ $
invisible exports 350
150 XY27 China Cups 5 750
invisible imports 200
50 OM32 China Plates 5 250
Less Trade Discount 200 What is the Balance of Payments for this country?
Invoice Total 800 A $150 m B $250 m C $350 m D $1450 m

How much money will ABC Souvenirs save if payment is made immediately?
17 How do member countries benefit from belonging to a trading bloc?
A $10 B $40 C $50 D $200
A Financial contributions are paid to administer the trading bloc.
B Goods are adapted to meet the needs of all the members of the trading bloc.
C Higher prices are paid for goods bought from outside the trading bloc.
D Sales to other members of the trading bloc are likely to increase.

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18 Which factor is most likely to influence the choice of an advertising medium for many kinds of 22 Which postal service would be used for urgent delivery of letters and parcels?
goods?
A express mail
A amount and size of packaging
B poste restante
B method of distribution
C private box
C number of customers
D registered post
D the brand name

23 Which type of transport is the most suitable for the bulk delivery of diesel fuel to a transport
19 Which advertising method of appeal is shown? company?

A delivery van
B freight plane
C goods train
D road tanker

24 Which service is provided at both seaports and airports for the handling of international cargo?

A car hire
A ambition
B customs inspection
B convenience
C quays
C durability
D runways
D masculine appeal

25 What is not a function of warehousing?

20 A manufacturer of soft drinks has decided to advertise on the internet because
A acting as a reservoir for production ahead of demand
A computer users can block unwanted messages by installing security software.
B ensuring that retailers obtain the best possible price
B instructions can be given on how to use the products.
C ensuring that seasonal products are available all year
C market coverage is limited to those who surf the internet.
D providing a place for collection and distribution
D the advertisement can appear on popular websites and homepages.

26 What is a benefit to a supermarket chain of operating regional distribution centres?

21 What would companies trading in the global economy find most useful to know about?
A It can break bulk and distribute supplies where required.
A benefits of insurance through the pooling of risks
B It can buy from a variety of wholesalers.
B exchange rates of different currencies
C It can locate a warehouse near every supermarket.
C survival of small retail shops across the world
D It can supply small-scale retailers with small quantities of goods.
D weather conditions in their own countries

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27 Which risk is non-insurable? 31 What is a direct debit?

A bad management A a method by which a bank charges a current account holder for its services
B broken window B money taken automatically by a creditor from a current account
C car accident C payment of several bills with one cheque for the total amount
D warehouse flood D the bank’s own cheque paid on behalf of a customer

28 Which insurance principle requires the insured to give correct information? 32 Which business unit is not in the private sector?

A contribution A limited company

B indemnity B partnership
C insurable interest C public corporation
D utmost good faith D sole trader

29 The diagram shows the process involved in making a claim. 33 CC Confectionery is a newly-established public limited company. It wishes to raise extra finance
on a stock exchange in order to expand.
produce
contact the complete a receive Which feature of this company is most likely to encourage investment in CC Confectionery?
→ documentary → → X →
insurer claim form compensation
evidence A gift boxes for new shareholders

What is the insurer’s action at X? B limited liability for shareholders

C publication of the accounts
A assess the evidence
D the popularity of sweets in the country
B find witnesses
C inform police
34 Which definition describes a multinational company?
D prepare cover note
A It is formed by two or more organisations, now trading as one company.

30 What is an advantage to a customer of having an internet bank account? B It is owned and run by a government to provide a service nationally.
C It is owned by many shareholders who live and work in other countries.
A being sure of complete security
D It operates in many countries, with its headquarters in one country.
B paying in cash and cheques
C receiving alerts about the account
35 How might financial services support primary producers?
D withdrawing cash at any time
A helping producers purchase equipment
B linking primary and secondary producers
C marketing products produced
D providing direct services

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36 A retailer’s opening stock, valued at cost, was $18 000. At the end of the trading period its cost BLANK PAGE
value was $22 000. The rate of inventory turnover for the period was 4.

What was the cost to the retailer of buying the stock during the trading period?

A $5000 B $10 000 C $40 000 D $80 000

37 A department store wishes to increase its sales revenue.

How might it achieve this?

A charge for after-sales services such as delivery and installation of goods

B increase customer satisfaction by reducing its use of self-service
C move to different suppliers who may charge more for stock
D relocate to a different city centre area where rents are lower

38 What is a political factor that affects commercial activity?

A healthcare
B pollution
C taxation
D technology

39 Which action is an environmentally-friendly practice?

A forest clearance for new industrial sites

B overfishing of seas and rivers
C returning landfill sites to parklands
D using rivers to dispose of waste

40 A customer wishes to return a recently purchased item.

Under what circumstances is the shop not required to give the customer a refund?

A The customer has damaged the item and no longer wants it.
B The item does not match the description on its packaging.
C The item does not match the sample shown to the customer in the shop.
D When the item was eventually delivered to the customer it was too late to be of any use.

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reasonable effort has been made by the publisher (UCLES) 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.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cie.org.uk after the live examination series.

Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local
Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge.

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