UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
General Certificate of Education Ordinary Level
*1546610185*
COMMERCE 7100/02
Paper 2 October/November 2009
2 hours
Candidates answer on the Question Paper.
No Additional Materials are required.
READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name in the spaces provided above.
Write in dark blue or black pen.
Do not use staples, paper clips, highlighters, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer any four questions.
The businesses described in this Question Paper are entirely fictitious.
The number of marks is given in brackets [ ] at the end of each question or part question.
For Examiner's Use
Total
This document consists of 19 printed pages and 5 blank pages.
IB09 11_7100_02/2RP
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Answer any four questions. For
Examiner's
Use
1 The diagram in Fig. 1 shows the Activities A-E involved in the production of a can of peas.
Growing and
A harvesting
pods of peas
Shelling peas
B ready for
canning
Canning peas
C in the food
processing factory
Distribution of
D canned peas to
supermarkets and
other shops
Sale of canned
E peas to
consumers
Fig. 1
Use the diagram in Fig. 1 to help you to answer the following questions.
(a) What stage of production is the activity in Fig. 1 labelled:
(i) A
(ii) D [2]
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(b) Using the diagram in Fig. 1, identify two ways in which value is added to the pods of For
peas. Examiner's
Use
Way 1
Way 2
[2]
(c) Explain how the farmer who is growing the peas might make use of:
(i) banking and finance;
[3]
(ii) warehousing.
[3]
(d) Describe how the canned peas would be distributed to supermarkets and other shops
(Activity D).
[4]
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(e) The food processing factory uses specialisation when canning many kinds of For
vegetables. Is specialisation beneficial to the owner of the factory? Examiner's
Use
Give reasons for your answer.
[6]
[Total: 20]
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2 Aminathi Singh owns several shops selling motorcycles. For
Examiner's
Use
(a) Explain two reasons why it is better to own several shops rather than one shop.
Reason 1
Reason 2
[4]
(b) Why should Mrs Singh offer after sales service in her shop?
[3]
(c) Mrs Singh wishes to start an advertising campaign to sell more motorcycles. State two
factors she should consider when choosing which advertising media to use. Give a
reason for each of your choices.
Factor 1
Reason
Factor 2
Reason
[4]
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(d) Giving an example, explain what is meant by a method of appeal. For
Examiner's
Use
[3]
(e) Mrs Singh is considering using the following methods of promotion:
a free gift with every motorcycle sold
5% discount when payment is made in cash
a free copy of a motoring magazine
Which method of promotion would you recommend? Give reasons for your choice.
[6]
[Total: 20]
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3 The following headlines have appeared in a newspaper. For
Examiner's
Use
Rise in popularity of the small retailer - many small shops opening
Supermarkets compete on price - consumers benefit
Fig. 2
Use the newspaper headlines in Fig. 2 to help you to answer the following questions.
(a) Explain two reasons why many people start small retail businesses.
Reason 1
Reason 2
[4]
(b) Explain why small shops are popular with consumers.
[4]
(c) Do consumers benefit from supermarkets competing on price? Give reasons for your
opinion.
[3]
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(d) Mrs Ming has bought some cooking oil from her local supermarket. The cooking oil For
smells bad. What actions could she take? Examiner's
Use
[3]
(e) A supermarket wishes to increase its sales by using the following options:
Option 1 Selling local produce
Option 2 Offering own brands
Option 3 Giving loyalty cards to customers
Option 4 Providing an in-store bakery
Which two of these options would be the best methods of increasing sales? Give
reasons for your choices.
[6]
[Total: 20]
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4 The Managing Director of Smartwear Ltd has decided to install a computer system which For
will automatically produce invoices and other commercial documents ready to send to Examiner's
Use
customers. At present this is done manually.
(a) (i) Explain what is meant by an invoice.
[3]
(ii) Name one other commercial document sent to customers after the invoice and
explain its function.
Commerical document
Function
[3]
(b) Explain the benefits of using a computer system to issue invoices.
[4]
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(c) The Managing Director intends to lease the computer from an office supplies company For
for $150 a month on a four year contract. Examiner's
Use
Calculate the cost of the lease for the four year period. Show your working.
[4]
(d) The Managing Director needs to communicate the decision to install the computer
system to other members of staff. She has the following methods of communication
available:
email letters to all members of staff
telephone intranet
Which two methods of communication should she use? Give reasons for your opinion.
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5 Masengo owns a furniture warehouse. He sells directly to consumers who visit the For
warehouse. Examiner's
Use
He accepts credit cards, debit cards and cash in payment for the furniture.
He does not accept cheques.
He also offers hire purchase agreements for the more expensive items.
(a) Why should Masengo accept credit cards?
[2]
(b) Explain two benefits to Masengo of his customers using cash to pay for the furniture.
Benefit 1
Benefit 2
[4]
(c) Explain why Masengo does not accept cheques.
[2]
(d) Explain one difference between a credit card and a debit card.
[2]
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(e) Should Masengo continue to offer hire purchase agreements to his customers? Give For
reasons for your opinion. Examiner's
Use
[6]
(f) Explain two reasons why Masengo needs a warehouse.
Reason 1
Reason 2
[4]
[Total: 20]
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6 Abdul Khan owns a van that he uses for his business. For
Examiner's
Use
The table below shows the no claims bonus and premiums for insurance for the van over
five years.
Year Total Premium Charged No Claims Bonus
$ %
1 1100 -
2 1150 20
3 1200 40
4 1230 60
5 1280 60
Fig. 3
Use Fig. 3 to help you to answer the following questions.
(a) (i) What is meant by a premium?
[1]
(ii) What is meant by no claims bonus?
[2]
(iii) Why has the no claims bonus increased from nil in Year 1 to 60% in Year 4?
[1]
(b) The total premium in Year 3 is $1200. Abdul is entitled to 40% no claims bonus.
Calculate his premium. Show your working.
[2]
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(c) Explain why the total premium charged has risen from $1230 in Year 4 to $1280 in For
Year 5. Examiner's
Use
[2]
(d) Abdul is making a claim for an accident he has had in Year 5. Discuss the importance
of the principles of insurance when making a claim. Which do you consider to be the
most important principle? Give reasons for your choice.
[6]
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(e) Abdul bought his van from Hassan Motors Ltd, a public limited company. He has his For
van maintained and serviced at Ready Auto Services, a small garage owned by Mr Ng, Examiner's
Use
a sole trader.
(i) State two features of a public limited company.
Feature 1
Feature 2
[2]
(ii) Why might Abdul prefer to use Ready Auto Services for the maintenance and
servicing of his van rather than using Hassan Motors Ltd?
[4]
[Total: 20]
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7 Louis Daly owns a wholesaling business buying from manufacturers and selling to retailers For
in the home market. He also buys from other countries through intermediaries (people who Examiner's
Use
bring buyers and sellers together) to meet the demands of consumers.
(a) Explain two services Louis gives to manufacturers in the home market.
Service 1
Service 2
[4]
(b) Name two kinds of intermediaries Louis might use when buying from other countries.
2 [2]
(c) Is it true that intermediaries are needed more in international trade than in home trade?
Give reasons for your opinion.
[6]
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(d) Explain why consumers may buy some types of goods from other countries even For
though they are manufactured in their own country. Examiner's
Use
[4]
(e) Explain how the functions of customs authorities may affect Louis’ business.
[4]
[Total: 20]
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8 Three airlines operate within a country where distances are very great. They transport For
people and freight. Examiner's
Use
(a) Explain why air transport is important within this country.
[6]
(b) Suggest one other way in which heavy freight might be moved in this country. Give
reasons for your choice.
[4]
(c) (i) Name two services provided at airports for passengers.
2 [2]
(ii) Name two services provided at airports for handling freight.
2 [2]
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(d) Two of the airlines are in serious financial difficulty. They need to replace aircraft. They For
have made losses during the last two years because of the increasing costs of fuel and Examiner's
Use
staff wages.
Recommend ways in which these two airlines might be made profitable. Give reasons
for your recommendations.
[6]
[Total: 20]
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University of Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of
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