OxfordAQA IGCSE Business: Influences on Business — Practice Questions (9225)

These are original questions written for Marlbridge, in the style and at the standard of the examination. They are not reproduced past-paper questions — examination boards hold copyright in their own papers. Use these alongside the official past papers available free from your board.

Related: Influences on business study guide

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Section A

1. State two ways a business can use e-commerce to access wider markets. [2]

2. Identify two types of environmental consideration a business may need to address. [2]

Section B

3. Explain two ways a rise in interest rates could affect a small business that relies on a bank loan to fund new equipment. [6]

4. Analyse the possible trade-off between acting ethically and maximising profit for a business deciding whether to use a cheaper, less environmentally friendly supplier. [8]

5. Explain how a weaker home currency (depreciation) could affect a business that exports most of its products. [4]

6. Explain two ways new health and safety legislation could affect a business’s costs. [6]

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Answers

1. Selling directly to customers globally through a website, without needing physical stores in every market [1]; using digital communication (e.g. email, social media) to reach and engage customers in distant markets at low cost [1].

2. Any two of: traffic congestion, recycling, waste disposal, noise pollution, air pollution [1] [1].

3. Direct effect: loan repayments increase, raising the business’s fixed costs and reducing the profit available for reinvestment [1] [1] [1]. Indirect effect: consumers also face higher borrowing costs, reducing their disposable income, which may reduce demand for the business’s products at the same time its own costs are rising [1] [1] [1].

4. Using the cheaper supplier increases short-term profit by reducing input costs [1] [1], but may damage the business’s reputation with stakeholders (customers, investors) who value ethical and environmentally responsible behaviour, potentially reducing sales or long-term brand value [1] [1] [1]. A supported judgement should weigh the size of the short-term cost saving against the likely severity of reputational damage for this specific business — for example, a business marketed heavily around sustainability has more to lose reputationally than one where customers prioritise price above all else [1] [1] [1].

5. A weaker home currency makes the business’s exports cheaper for foreign buyers in their own currency [1] [1], likely increasing the quantity of exports sold [1] and potentially increasing total revenue, depending on how responsive foreign demand is to the price change [1].

6. Compliance costs: the business may need to invest in new equipment, training or facilities to meet the new legal requirements, directly raising costs [1] [1] [1]. Non-compliance costs: failing to comply risks fines, legal costs, or reputational damage if an incident occurs, which could be more costly than the compliance investment itself [1] [1] [1].

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Exam technique for this topic

Evaluation-style questions like Q4 are marked most highly when the answer reaches a supported judgement specific to the scenario given, rather than a generic list of pros and cons that would apply to any business — always tie the final judgement back to a specific detail in the question (the type of business, its customers, its market position) rather than concluding with a general statement that could apply anywhere. For questions about interest rates, exchange rates, or other economic-climate factors, distinguish the direct effect on the business’s own finances from the indirect effect that works through its customers’ spending power or competitiveness, since examiners specifically credit this two-part reasoning over a single undifferentiated point. When explaining an effect of legislation, always state a mechanism — how the cost or benefit actually arises — rather than simply asserting that a law “affects” the business.

Worked example: weighing two influences against each other

A question describes a small, locally-owned café facing both a new minimum-wage increase (legislation) and rising competition from a newly opened international coffee chain nearby (competitive environment). Asked to assess which poses the bigger risk, a strong answer weighs both against the café’s specific situation: the minimum-wage rise raises a known, quantifiable cost that can be planned for through pricing adjustments, while new competition threatens the café’s customer base and revenue in a less predictable way that pricing alone may not fully offset, particularly if the chain competes on price, convenience or brand recognition the small café cannot easily match. A supported conclusion — for instance, that competition poses the greater risk here because it threatens revenue directly rather than simply raising a cost that can be passed on — is what separates a strong evaluative answer from one that merely describes both influences without comparing their relative severity for this business.

Connecting sub-topics across the exam paper

Because Topic 2’s six sub-topics recur as background context throughout Topics 3-6 (Business Operations, Human Resources, Marketing and Finance), a scenario question elsewhere on the exam paper may assume familiarity with, say, exchange-rate effects (2.4) without re-explaining them — building genuine fluency in this topic, rather than revising it as a standalone unit to be forgotten once the test on it is complete, pays off throughout the rest of the exam.

Where marks are usually lost

• Stating that an influence “affects the business” without explaining the specific mechanism by which it does so.
• Treating ethical behaviour as costless, without acknowledging the genuine trade-off with profit the question is testing.
• Confusing the direction of an exchange-rate effect — a weaker currency helps exporters and hurts importers, not the reverse.
• Giving a generic evaluation conclusion that does not engage with the specific business or scenario described in the question.