OCR A Level Business: Global context, trade, the EU and emerging markets (H431) – 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 the content headed Global context, International trade and free trade, The European Union, and Emerging markets and the global environment in the OCR A Level Business (H431) specification, Version 2.1 (January 2026). Read the study guide and revision notes first. The specification permits a scientific or graphical calculator. The businesses and figures are invented. Rates are foreign units per £1.

Questions

1. (a) Define globalisation. [2] (b) Explain two factors that have facilitated globalisation. [4] (c) Explain one way in which multinationals contribute to globalisation. [2]

2. Distinguish between globalisation and a global strategy. [4]

3. Elmstow Ceramics is a UK business. The exchange rate is £1 = €1.16. (a) A plate sells for £36. Calculate its price in euros. [2] (b) A Spanish glaze supplier sends an invoice for €8,700. Calculate its cost in pounds. [2] (c) The rate changes to £1 = €1.22. Calculate the new pound cost of the invoice, and state whether the pound has appreciated or depreciated. [3]

4. Explain the nature and purpose of two barriers to international trade: a tariff and a quota. [4]

5. (a) Explain what is meant by free trade. [2] (b) Explain what is meant by a trading bloc. [2] (c) State one advantage and one disadvantage for a business that trades within a trading bloc. [4]

6. Describe one financial and one non-financial source of support for a business that trades internationally. [4]

7. Elmstow Ceramics sells mainly to retailers in the Eurozone and prices in euros. Monthly sales are €52,000 and the monthly glaze invoice is €8,700. The pound rises from £1 = €1.16 to £1 = €1.22. Evaluate the impact of this change on Elmstow and its stakeholders. [9]

8. Dalwyn Coffee has 14 cafes in one UK region and is known for its local roasting. Veyra Coffee, a global brand with a loyalty app and lower prices on standard drinks, plans to open six sites nearby. Evaluate the opportunities and threats to Dalwyn of the rise in the number of global brands. [9]

9. Cobsworth Foods is a UK snack maker considering an emerging market. The country has 48 million people, 12% of whom are middle-income buyers. In six years it is expected to have 52 million people, 19% of them middle-income. (a) Explain what is meant by an emerging market. [2] (b) Calculate the percentage growth in the number of middle-income buyers. Give your answer to one decimal place. [2] (c) Evaluate the impact on Cobsworth Foods of this emerging market. [6]

10. Explain how EU enlargement and the single European currency may influence a UK business that sells to EU members. [6]

11. Kelvarra Software is a UK developer of scheduling software for dental practices, with UK sales of £1.8 million. The directors compare two options. Option A is the EU: expected first-year sales of €420,000 at £1 = €1.16, with a one-off set-up cost of £60,000 for translation and compliance, and expected sales growth of 8% a year. Option B is Asia-Pacific: expected first-year sales of USD 310,000 at £1 = USD 1.25, a local partner taking 30% of sales, a one-off set-up cost of £35,000, and expected sales growth of 25% a year. Recommend and justify which option Kelvarra should choose, or whether it should do both. [12]

Answers

1. (a) The growing integration of economies, markets and businesses across borders [1], so that goods, services, money and information move more freely between countries [1]. (b) Two factors [1] [1], each explained [1] [1]. Options: the Internet and communication technologies let firms coordinate suppliers and customers abroad cheaply; e-commerce lets small firms sell directly to overseas buyers; trade liberalisation lowers tariffs and quotas, cheapening trade; better transport infrastructure cuts the cost and time of moving goods. (c) Multinationals locate production and sales in several countries [1], spreading brands, technology and supply chains across borders [1]. Examiner insight: A definition earns credit when it names the cross-border element; a bare statement that “the world is smaller” gives little. Each factor in (b) needs a linked reason.

2. Globalisation is a trend in the business environment, outside the control of any one firm [1] [1]. A global strategy is a deliberate plan by one business to operate in world markets [1], for example entering several countries with a standardised product [1]. Examiner insight: Answers that give two separate definitions and never contrast them are weaker; use a word such as “whereas” so the difference is explicit.

3. (a) 36 × 1.16 [1] = €41.76 [1]. (b) 8,700 ÷ 1.16 [1] = £7,500 [1]. (c) 8,700 ÷ 1.22 = £7,131.15 [1]. The pound buys more euros, so it has appreciated [1]. The invoice is £368.85 cheaper [1]. Examiner insight: Show the multiply or divide step. A bare wrong figure shows nothing. State the direction of the change in words.

4. A tariff is a tax on imports [1], used to raise revenue or make imports dearer than local goods, which protects domestic producers [1]. A quota caps how many units of a good may be imported [1], used to protect domestic producers and jobs by capping foreign supply [1]. Examiner insight: “Nature” and “purpose” are two separate asks. A description of what the barrier is, with no reason for using it, covers only half the question.

5. (a) Trade between countries [1] without tariffs, quotas or other barriers [1]. (b) Countries that agree to lower or scrap trade barriers among members [1], often sharing common rules or a common external barrier [1]. (c) Advantage: tariff-free access to a larger market of member countries [1], which can raise sales and economies of scale [1]. Disadvantage: more competition from other member firms [1], which can lower the firm’s market share or prices [1]. Examiner insight: Explain why each point matters to a business, not to a country.

6. Financial: export credit insurance or a bank letter of credit [1] protects the exporter against non-payment and eases cash flow [1]. Non-financial: government trade advice, trade fairs or a local agent [1] gives market information and contacts before committing money [1]. Examiner insight: “Describe” asks for more than a name. Say what each source provides, and give one of each type.

7. Adverse effects: sales in pounds fall from £44,827.59 to £42,622.95, a fall of about £2,205 a month [1] [1]. Raising euro prices risks losing sales to rivals [1]. Offsetting effect: the glaze invoice falls from £7,500 to £7,131.15, a saving of £368.85 [1]. Net: about £1,836 a month less [1]. Stakeholders: shareholders face lower profit and dividends [1]; employees may face pay restraint if the fall continues [1]; Eurozone retailers see no price change [1]. Judgement: the exposure is mainly on the sales side, because sales are more than five times the glaze bill, so Elmstow gains little from cheaper imports. It could buy more inputs in euros or agree fixed rates [1]. Examiner insight: Numbers carry more weight when you compare them, as here. Say which effect dominates. A list of good and bad effects with no comparison leaves the evaluation unfinished.

8. Threats: Veyra’s lower prices on standard drinks may pull price-sensitive customers [1]; its app builds loyalty [1]; six new sites close by could split the local market and reduce sales per cafe [1] [1]. Opportunities: Dalwyn can position as the local, roast-to-order alternative with more distinctive coffee [1]; Veyra may raise overall demand for café visits in the region [1]; community links and service add differentiation [1]. Judgement: the outcome depends on whether Dalwyn’s customers value local roasting over price. As it competes head-on in the same area, the threat is serious, but a clear niche is a credible defence [1] [1]. Examiner insight: Apply the global brand to the café, not to “businesses in general”. Evaluation improves when you name the condition on which the conclusion depends.

9. (a) A country with a fast-growing economy that is industrialising [1], with rising incomes but not yet as developed as advanced economies [1]. (b) 48 × 0.12 = 5.76 million and 52 × 0.19 = 9.88 million [1]. (9.88 − 5.76) ÷ 5.76 × 100 = 71.5% [1]. (c) Opportunity: the middle-income group rises by about 71.5%, so demand for packaged snacks could grow strongly [1] [1]. Risks: local competitors know tastes and distribution [1]; exchange rate swings could cut pound profit [1]. Judgement: the growth is large enough to justify entry, perhaps through a local distributor to limit the risk, because the firm does not yet know the market [1] [1]. Examiner insight: Quote the 71.5% growth and link it to demand, rather than saying only “growing market”.

10. Enlargement: more countries joining adds customers and suppliers under the same rules [1] [1]. It also adds competitors, often with lower costs [1]. Single currency: trading with members that use the euro removes exchange rate risk and conversion costs [1] and makes prices easy to compare [1]. A UK business outside the Eurozone still converts pounds, so exposure remains [1]. Examiner insight: Cover both parts of the question. Link each feature to a cost or revenue effect.

11. Option A: €420,000 ÷ 1.16 = £362,068.97 [1], or £302,068.97 after the set-up cost [1]. Year-three sales at 8% growth are about £422,317 [1]. Option B: USD 310,000 ÷ 1.25 = £248,000, less 30% partner share £74,400 = £173,600 [1], £138,600 after set-up [1]. Year-three sales at 25% growth are £387,500, or £271,250 after the partner share [1]. Factors: the EU is nearer and similar in standards; a translated product suits local-language buyers [1], while Asia-Pacific brings language, culture and time-zone differences and reliance on a partner [1]. Both involve currency risk, and Kelvarra, being outside the EU and the Single European Market, faces extra paperwork and compliance [1]. Recommendation: choose Option A, since it is higher in both year one and year three on these figures [1], and treat Option B as a later move once the EU base is secure and the partner terms are tested [1]. The conclusion would change if Asia-Pacific growth far exceeded 25% [1]. Examiner insight: Use the calculated figures in the justification. A recommendation backed only by general claims scores less than one built on the numbers and a condition that could change the choice.

Where marks are usually lost

• Defining a term without applying it to the business in the stem.
• Dividing when the conversion needs multiplying, or the reverse.
• Describing an exchange rate change without saying whether it helps importers or exporters.
• Confusing a tariff with a quota, or a trading bloc with free trade.
• Giving only an opportunity, or only a threat, on an “evaluate” question.
• Quoting stem data without comparing it, or leaving out a conclusion.
• Recommending an option without a reason why the alternative is weaker.

Frequently asked questions

Are these OCR A Level Business H431 past paper questions? No. They are original practice questions written for Marlbridge on Global context, International trade and free trade, The European Union, and Emerging markets and the global environment. Use them alongside OCR’s own past papers.

How do you avoid mistakes in currency conversion questions? Check the starting currency and show the multiply or divide step, then state the direction of the change in words. With a rate in foreign units per £1, multiply to convert pounds into the foreign currency and divide to convert back.

What should you say about an exchange rate change? Say whether it helps importers or exporters, and what it does to costs, prices or profit for the business in the case. A general statement that “exchange rates affect trade” earns little.

How do you use figures in an evaluate question on global markets? Compare the numbers and say which effect dominates, then reach a conclusion. Quoting stem data without comparing it, or listing good and bad effects with no comparison, scores less.

What does a “recommend and justify” answer on international expansion need? A clear decision built on the calculated figures and a reason why the alternative is weaker. A recommendation backed only by general claims scores less.

Next steps

• Read the study guide and revision notes.
• Visit the OCR A Level Business hub and the printable checklist.
• Try the free 10-minute diagnostics.
• Book a free trial class.

Official syllabus

OCR A Level Business (H431), Version 2.1 (January 2026), published by OCR, for first assessment in 2017 with final assessment in summer 2027. Content covered: Global context; International trade and free trade; The European Union; Emerging markets and the global environment, within External influences.