UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Ordinary Level

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1 * * UNIVERSITY OF MRIGE INTERNTIONL EXMINTIONS General ertificate of Education Ordinary Level OMMERE 7100/13 Paper 1 Multiple hoice May/June hour dditional Materials: Multiple hoice nswer Sheet dditional Materials: (not provided by IE) Soft clean eraser Soft pencil (type or H is recommended) Ruler Protractor RE THESE INSTRUTIONS FIRST Write in soft pencil. o not use staples, paper clips, highlighters, glue or correction fluid. Write your name, entre number and candidate number on the nswer Sheet in the spaces provided unless this has been done for you. O NOT WRITE IN NY ROES. There are forty questions on this paper. nswer all questions. For each question there are four possible answers,, and. hoose the one you consider correct and record your choice in soft pencil on the separate nswer Sheet. Read the instructions on the nswer Sheet very carefully. Each correct answer will score one mark. mark will not be deducted for a wrong answer. ny rough working should be done in this booklet. The businesses described in this question paper are entirely fictitious. This document consists of 10 printed pages and 2 blank pages. I13 06_7100_13/5RP ULES 2013 [Turn over

2 2 1 commerce trade X Identify X in the diagram. aids to trade direct services foreign trade home trade 2 Which statement shows the inter-relationship between secondary industry and commerce? growing wheat which is made into bread and cakes insuring a bank against claims made by the public mining coal for use in a steelworks selling furniture made in a factory to the consumer 3 The diagram shows some of the commercial problems helped by aids to trade. commercial problems risk storage X aids to trade insurance warehousing transport Identify X in the diagram. communication distance finance wholesaling ULES /13/M/J/13

3 3 4 What is the main function of a retailer? manufacturing goods for customers offering free parking to customers providing small quantities of goods to consumers selling goods in bulk to consumers 5 Which advantage does a vending machine have over retail shops? It deals with consumers complaints. It offers goods at low prices. It provides a wide range of goods. It saves on floor space. 6 Small-scale retailers survive competition from large-scale retailers by having access to credit finance. offering a personal service. providing a wide variety of goods. using expensive advertising. 7 Tariq wishes to buy a refrigerator. He can either pay $250 in cash, or accept the retailer s offer of a hire purchase agreement for a year. If he chooses hire purchase, he must pay a deposit of $40 and then 12 monthly instalments of $20. How much would Tariq pay for the refrigerator if he chooses hire purchase? $40 $60 $240 $280 8 Why might a consumer protection organisation advertise? to improve consumer awareness to inform consumers of new products to persuade consumers to buy goods to remind consumers of existing products ULES /13/M/J/13 [Turn over

4 9 retailer is most likely to use a wholesaler when 4 bulk orders are required by the retailer. goods are large and fragile. goods need after-sales service. the retailer has a small-scale business. 10 Which service is provided by wholesalers to manufacturers? clearing production lines offering loans providing cash and carry services supplying goods locally 11 What information would be found in a quotation? details of goods returned by a customer instructions to a carrier relating to the delivery of goods prices and terms under which the goods will be sold summary of a number of transactions 12 The diagram shows a statement of account from 1 Fashion Wholesalers for Ltd. S T TEMENT OF OUN T 1 Fashion Wholesalers redit venu e T o: Lt d 10 New Street Singapore Month ending: 31 May 2013 ate etails ebit redit alance $ 01 May 05 May 10 May 27 May alance b/f heque ash iscount Invoice 7891 redit Note What percentage cash discount does 1 Fashion Wholesalers offer to Ltd? 5% 10% 40% 95% ULES /13/M/J/13

5 13 International trading figures for a country over one year are shown. 5 visibles $bn invisibles $bn imports exports What is the alance of Payments on its current account for the year? $35bn +$15bn +$20bn +$35bn 14 What are customs authorities responsible for? calculating the alance of Trade collecting duty on imported goods reducing exports supervising port authorities 15 What is the main advantage of a trading bloc? free trade between member countries guaranteed prices to producers increased revenue from customs duties more trade with non-member countries 16 Why is trading overseas more difficult than trading in the home market? Goods are demanded in smaller quantities. Road and rail transport cannot be used. The exporter may be operating within a trading bloc. Weights and measurements may be different. 17 n unsuccessful advertising campaign may result in improvement in the quality of the goods. changes in prices charged for the goods. more goods for the consumer to buy. reduced costs of production. ULES /13/M/J/13 [Turn over

6 18 What is an advantage of direct mail advertising over newspaper advertising? 6 dvertisements may last longer. dvertisements may reach more people. dvertisers are protected against bad publicity. dvertisers can target their audience. 19 petrol company advertises the best fuel prices in the area. What is this called? collective advertising competitive advertising generic advertising informative advertising 20 What communication system does the diagram show? computer database computer network the Internet videoconferencing 21 The diagram shows address labels which might be seen on envelopes. Which label would be used on an envelope addressed to a person who is travelling and who wishes to collect post from a nearby post office? Mr Jasani Freepost 99 Lahore Post Office Pakistan Mr Jasani Poste Restante Lahore Post Office Pakistan Mr Jasani Private ox No. 106 Lahore Post Office Pakistan Mr Jasani Registered Post No Lahore Post Office Pakistan ULES /13/M/J/13

7 22 What advantage does sea transport have over air transport? 7 carries bulk loads faster turnaround of goods less risk of damaged goods quicker delivery 23 Which statement applies to an air waybill? It gives title to the goods. It is a contract. It is a negotiable instrument. It is made up of four copies. 24 Which service provided by a port authority would be most useful to a trader who is intending to re-export motor vehicle spare parts? access to the inland transport network accommodation for a branch of the trader s bank bonded warehousing ship refuelling and repair yard 25 Why are warehouses needed? to enable goods to be displayed to make goods available when they are wanted to reduce the chain of distribution to reduce the cost of goods to the consumer 26 What will a retailer expect when purchasing from a cash and carry warehouse? cash discount, if paid within 28 days long-term credit no credit and no delivery of goods prompt delivery of goods ULES /13/M/J/13 [Turn over

8 8 27 The diagram shows the pooling of risk. insured public X make payments for losses insurance pool expenses dividends to investors Identify X in the diagram. invest funds make claims pay premiums receive policies 28 Mr Sibanda is not able to take out an insurance policy to cover a house he is renting from a friend. customers who visit his firm, in case of injury. the death of a client who owes him $ workers in his firm, in case of injury. 29 factory building is valued at $20 million. It has been insured for $25 million. If the building is totally destroyed, how much would the factory owner receive in compensation? $0 million $5 million $20 million $25 million 30 What is the most important factor when completing an insurance claim form relating to a motor vehicle accident? asking for a new car to replace the damaged one claiming as much money as possible from the insurance company completing the claim form truthfully and giving all relevant facts notifying the police that an accident has taken place ULES /13/M/J/13

9 9 31 What is the function of a commercial bank? financing hire purchase fixing the rate of exchange safeguarding customers money setting interest rates 32 Why would a company manufacturing machinery for export have a bank savings account? heques can be used to pay creditors. Electronic transfers can be used to receive payments. Funds can be kept for future investment. Payments can be made to suppliers on a regular basis. 33 large company wants all customers to pay their monthly accounts in full on the due date. Which method of payment would be most suitable for the company? cheque credit transfer debit card direct debit 34 The ank of sia is offering a new online banking service. What would not apply to this service? ustomers are given special overdraft and loan facilities. ustomers can bank 24 hours a day, 7 days a week. ustomers can gain access to their accounts using computer links. ustomers can pay bills and transfer funds over the Internet. 35 Two brothers wish to start a business selling tee-shirts over the Internet. They are looking for suitable premises. Which factor will most influence their choice of location? cheap business rates and rent land for future expansion nearness of shopping areas parking area for vehicles ULES /13/M/J/13 [Turn over

10 36 In which organisation are the owners protected by limited liability? 10 ordinary partnership public corporation public limited company sole trader 37 What is an advantage of franchising to the franchisor? ontrol of the business is given to franchisees. Royalty payments, charged on turnover, are received. Support is given in the form of site selection and choice of suppliers. The franchisee does not pay advertising costs. 38 What is an advantage to a country of a multinational company being located there? environmental pollution in the home country high taxation in the country increased employment in the country profits returned to the home country 39 limited company obtains long-term finance by issuing ordinary shares to people. What is an advantage of owning ordinary shares in this company? Shareholders earn fixed interest. Shareholders have voting rights. Shares are linked to company assets. Share values are changeable. 40 uring a month a retailer buys 1000 articles for $20 each. She sells all of them with a mark-up of 30%. Her expenses total $2000. What is her turnover for the month? $ $ $ $ ULES /13/M/J/13

11 11 LNK PGE ULES /13/M/J/13

12 12 LNK PGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (ULES) 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. University of ambridge International Examinations is part of the ambridge ssessment Group. ambridge ssessment is the brand name of University of ambridge Local Examinations Syndicate (ULES), which is itself a department of the University of ambridge. ULES /13/M/J/13

UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Ordinary Level

UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Ordinary Level UNIVERSITY OF MRIGE INTERNTIONL EXMINTIONS General ertificate of Education Ordinary Level *4869887961* OMMERE 7100/01 Paper 1 Multiple hoice October/November 2009 dditional Materials: dditional Materials