A Level Business: Enterprise (Cambridge 9609) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 1.1 Enterprise (1.1.1 to 1.1.3) of the Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028, an AS Level topic that A Level candidates also study. All businesses and people are invented. Revise first with the study guide and the revision notes. Course links: the Cambridge A Level Business hub, the checklist and the free diagnostics. For wider Topic 1 practice, see the Topic 1 practice questions.

Questions

1. Define the term adding value. [2]

2. Ravensgill Textiles makes wool scarves. Each scarf sells for £19.50. Bought-in wool and dye cost £6.40 a scarf and packaging costs £0.60 a scarf. The business makes 1,800 scarves a month. The owner is considering recycled wool. Total bought-in cost would rise to £7.90 a scarf and the new selling price would be £22.00.

(a) Calculate the value added per scarf at the current price. [2] (b) Calculate the total monthly value added at the current price. [1] (c) Calculate the change in monthly value added if the new price and cost apply and sales stay at 1,800. [3]

3. State which factor of production is best shown by each of the following in a pottery business.

(a) A kiln. [1] (b) The founder’s decision to start the business and take the risk. [1] (c) The clay dug from a local pit. [1]

4. The owner of Thessaly Pies has £15,000 to invest. A new oven would raise profit by £2,400 a year. An online ordering system would raise profit by £2,100 a year. Hiring a part-time worker would raise profit by £1,900 a year. She chooses the oven.

(a) Identify the opportunity cost of her choice. [1] (b) Explain why opportunity cost matters when a business makes decisions. [2]

5. Distinguish between business risk and uncertainty, using an example of each. [4]

6. Explain two barriers to entrepreneurship. [6]

7. Oriel Fenn is an employee of Sennen Paper, a large stationery producer. She designs a recycled-paper range in her own time, persuades managers to fund a trial and leads the team that launches it. Sennen Paper carries the cost of the launch.

(a) Explain why Oriel is an intrapreneur rather than an entrepreneur. [3] (b) Explain one way in which intrapreneurship may help Sennen Paper’s long-term success. [3]

8. Explain two differences between a local business and a multinational business. [4]

9. Amberley Loom has traded for three months. The owner’s business plan forecast average monthly sales revenue of £9,000. Actual average monthly sales revenue is £5,100. Monthly fixed costs are £6,200 and monthly variable costs are £1,900. The owner started with £40,000 of loan funding. Equipment cost £22,000, and £18,000 of cash remains today to cover monthly losses from now on. No other income is available.

(a) Calculate the average monthly profit or loss. [2] (b) Calculate how many months the remaining £18,000 will last at this rate. [2] (c) Analyse two reasons, using the data, why Amberley Loom is likely to fail. [4]

10. Cormac Tull plans Dunmore Pots, a mail-order pottery business. His business plan forecasts 80 orders a month at an average price of £25, and he will use it to ask a bank for a £12,000 loan.

(a) Calculate forecast monthly sales revenue. [1] (b) Calculate monthly sales revenue if orders turn out to be 30% lower than forecast. [2] (c) Explain one benefit and one limitation of Cormac’s business plan. [4] (d) Justify whether the bank should place heavy reliance on the plan when deciding the loan. [3]

11. Evaluate whether enterprise is the most important way a country’s businesses contribute to its development. [8]

Answers

1. Adding value is the process of turning inputs into outputs that sell for more than the cost of the bought-in materials and services [1], so that the difference between selling price and bought-in cost is the value added [1]. [2] Examiner insight: A definition earns more when it names the inputs and the selling price; “making something better” gives no clear measure.

2. (a) Bought-in cost = £6.40 + £0.60 = £7.00 [1]. Value added = £19.50 − £7.00 = £12.50 per scarf [1]. (b) 1,800 × £12.50 = £22,500 [1]. (c) New value added per scarf = £22.00 − £7.90 = £14.10 [1]. New monthly value added = 1,800 × £14.10 = £25,380 [1]. Change = £25,380 − £22,500 = an increase of £2,880 [1]. Examiner insight: In a calculation, show the bought-in total before subtracting and state the unit; a clear route lets a slip in one line cost less than a bare answer would.

3. (a) Capital, a man-made resource used in production [1]. (b) Enterprise, the ability to seek out and develop opportunities and accept the risk [1]. (c) Land, a natural resource [1]. Examiner insight: The context decides the answer; a kiln is capital even if you think of it as “equipment” in everyday language, so use the board’s four terms.

4. (a) The £2,100 a year extra profit from the online system, the next best alternative given up [1]. (b) Resources are limited, so using money one way means it cannot be used another way [1]. Looking at the opportunity cost helps a business compare options and judge whether the chosen one is worth more than the best alternative [1]. [2] Examiner insight: Naming the oven, or adding up all three options, is a common slip; only the single next best alternative counts.

5. Risk is where the possible outcomes and their likelihood can be estimated [1], for example the chance a restaurant loses money, estimated from sales of similar restaurants [1]. Uncertainty is where outcomes cannot be reliably predicted, so no probability can be set [1], for example the effect of a new technology that makes a product obsolete [1]. [4] Examiner insight: Each half needs its own example to gain the second mark; two definitions that sound alike show the difference has not been understood.

6. Any two barriers, three steps each. For example, difficulty raising finance [1]: a new entrepreneur has no trading record or security, so banks may refuse a loan or ask a high interest rate [1], which can stop a viable idea from starting [1]. Lack of skills or experience [1]: an entrepreneur who cannot manage cash or marketing may make costly errors in the early months [1], so many ideas fail or never begin [1]. [6] Examiner insight: Naming a barrier gains little alone; the explanation of why it stops a person starting is where credit is usually earned.

7. (a) Oriel acts entrepreneurially, creating and leading a new product [1], but she does it inside an existing business [1], and Sennen Paper, not Oriel, carries the financial risk of the launch [1]. [3] (b) Intrapreneurship brings new products and ideas from within [1], which stops a large business becoming slow and fixed [1], so Sennen Paper can keep its range fresh and adapt as customer tastes change, supporting long-term success [1]. [3] Examiner insight: Refer to the facts in the stem, such as who carries the cost; a general definition of an intrapreneur without that link is less convincing.

8. Any two differences, two steps each. For example, location of operations: a local business operates in one area, whereas a multinational owns and runs operations in more than one country [1], so the multinational can use lower-cost sites and reach larger markets [1]. Complexity and risk: a local business has simple, familiar rules and one currency [1], whereas a multinational faces different laws, cultures and exchange-rate changes [1]. [4] Examiner insight: A difference needs both sides stated; describing only the multinational leaves the comparison unfinished.

9. (a) Monthly costs = £6,200 + £1,900 = £8,100 [1]. Result = £5,100 − £8,100 = a loss of £3,000 a month [1]. (b) £18,000 ÷ £3,000 = 6 months [1], so the cash runs out about six months from now [1]. (c) Any two, each developed with data. Sales far below plan: actual sales revenue of £5,100 is £3,900 (43.3%) below the £9,000 forecast [1], so the forecast was unrealistic and the business cannot cover its costs [1]. Costs above revenue / weak cash control: fixed costs of £6,200 alone exceed sales revenue of £5,100 [1], so each month loses cash and only six months of funds remain [1]. [4] Examiner insight: Quoting the numbers and linking them to failure is what lifts analysis above a list of causes such as “poor planning”.

10. (a) 80 × £25 = £2,000 [1]. (b) Orders = 80 × 0.70 = 56 [1]. Revenue = 56 × £25 = £1,400 (£600 lower) [1]. (c) Benefit: the plan makes Cormac test his idea, costs and market before spending, so weaknesses can be found early [1], and it gives the bank evidence of his thinking [1]. Limitation: the forecast depends on assumptions such as 80 orders, and if they prove wrong, as in part (b), revenue falls by £600 a month [1], so the plan may mislead the owner and the bank [1]. (d) The bank should not rely heavily on the plan alone [1], because the forecasts are only estimates, and a 30% fall in orders would cut revenue by 30% [1]. It should also look at his experience, security for the loan and evidence such as early orders, then judge [1]. [3] Examiner insight: A justify question needs a reasoned decision backed by a reason from the case; “it depends” with no conclusion leaves the judgement unfinished.

11. For: enterprise creates new businesses, jobs and incomes [1], adds output and tax revenue [1], and brings innovation and more competition and choice [1]. Against or limits: other contributions matter too, such as large established firms, which employ many people and bring investment and exports [1]; a high failure rate among new ventures wastes resources and losses can harm lenders and workers [1]; and some enterprise may damage the environment or local communities [1]. Judgement: enterprise is important because it starts the process of new jobs and ideas, but it is not the only or always the most important contribution [1], as its success depends on finance, skills and stable conditions, and existing businesses are also vital [1]. [8] Examiner insight: Evaluation is shown when you weigh the claim against rival contributions and reach a supported conclusion, not by repeating the benefits of enterprise.

Where marks are usually lost

• Writing profit when a question asks for value added.
• Giving the chosen option as the opportunity cost.
• Leaving out units and working in calculation answers.
• Giving definitions of risk and uncertainty that sound the same.
• Describing barriers to entrepreneurship without saying why each stops people starting.
• Calling an employee who innovates an entrepreneur, ignoring who bears the financial risk.
• Using “international” and “multinational” as if they were the same.
• Analysing failure with generic causes and no figures from the case.
• Ending an evaluate or justify answer without a clear, reasoned judgement.

Next steps

• Recap the topic with the revision notes.
• Re-read the explanations in the study guide.
• Go to the Cambridge A Level Business hub and the printable checklist.
• Take the free 10-minute diagnostics.
• Book a free trial class.

Frequently asked questions

Which section of Cambridge AS and A Level Business 9609 do these questions cover? Section 1.1 Enterprise, from 1.1.1 to 1.1.3. The questions are original and all businesses and people are invented.

What is the most common mistake with opportunity cost? Giving the chosen option, or adding up all the options, as the opportunity cost. It is only the value of the next best alternative given up.

What is the difference between an entrepreneur and an intrapreneur? Both act entrepreneurially, but an intrapreneur does so as an employee inside an existing business, which bears the financial risk. An entrepreneur starts their own business and bears the risk personally.

How do I gain the second mark when distinguishing two terms? Give each term its own example as well as its definition. Two definitions without examples, or definitions that sound the same, lose marks.

Official syllabus

Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028, published by Cambridge University Press & Assessment (Cambridge Assessment International Education), section 1.1.