1.1.3a Purpose of business activity and adding value Quiz: Pearson Edexcel Business, Unit 1

The 20 questions

1. What is the main purpose of business activity?

   • To avoid paying any taxes to the government each year
   • To produce goods or services that meet customer needs
   • To keep the owner's name well known in the local community
   • To keep the number of employees as small as possible at all times

2. Which of these is an example of a business adding value through branding?

   • Selling trainers in a plain box with no logo or name printed on them
   • Selling trainers with a well-known logo that customers recognise and trust
   • Selling trainers from a van that visits the town once a month
   • Selling trainers at the cheapest price in the local area each week

3. Which of these adds value through design?

   • A kettle with a plain shape and no window to show the water level
   • A kettle sold in a supermarket that also sells bread and milk each day
   • A kettle with a sleek shape and an easy-to-read water level window
   • A kettle that is sold at a discount in the sale every single week

4. Which of these is a unique selling point (USP)?

   • A bakery that sells bread at the same price as the supermarket nearby
   • A bakery that accepts payment in cash only from its regular customers
   • A bakery that is open from seven in the morning until six in the evening
   • A bakery that uses only organic flour from a single named farm

5. A company puts its product in premium packaging with a clear logo. Which way is it adding value?

   • Through branding and design, which make the product look more desirable
   • Through a larger workforce, which makes it easier to produce more units
   • Through lower prices, which make the product cheaper than rival products
   • Through faster delivery, which gets the product to customers more quickly

6. Why might adding value allow a firm to charge a higher price?

   • Customers never compare prices, so the firm can charge what it likes always
   • Customers are forced to buy the product because there are no alternatives available
   • Customers pay more because the firm has a higher number of employees on staff
   • Customers see the product as worth more because of its quality or brand

7. Which of these best describes convenience as a way of adding value?

   • A shop that delivers groceries to the customer's home each week
   • A shop that is located on a road with very little passing traffic
   • A shop that only accepts cash and has no card payment machine at all
   • A shop that stocks a small range of products that few people want

8. Which of these is the purpose of business activity that relates to customers?

   • To keep product designs unchanged for as many years as possible
   • To reduce the number of customers so that staff have less work to do
   • To make sure that every customer buys the most expensive product available
   • To meet customer needs by providing products they want or need

9. A firm offers a two-year guarantee on its laptops when rivals offer one year. What value is it adding?

   • Quality and reassurance, because customers feel safer about the product
   • Faster delivery, because the guarantee speeds up the shipping of the laptops
   • Lower cost, because the guarantee reduces the price of the laptop itself
   • Larger range, because the guarantee gives access to more laptop models

10. Which pairing best matches a way of adding value with an example?

    • Speed with a hand-made leather wallet that is in the shop window
    • Quality with a hand-made leather wallet that lasts for many years
    • Location with a hand-made leather wallet that is sold in a market stall
    • Price with a hand-made leather wallet sold at the lowest price in town

11. A business wants to add value without changing the product. Which action is most likely to achieve this?

    • Reducing the number of staff who answer customer enquiries each day
    • Removing the product's warranty to cut the costs of the business
    • Improving the after-sales service so customers feel more supported
    • Stopping all advertising so that the product is less well known locally

12. Which of these is a purpose of business activity that a firm may pursue alongside profit?

    • Keeping its prices unchanged for many years regardless of rising costs
    • Providing employment and useful products for the local community
    • Avoiding all contact with customers so that the firm can work in private
    • Ensuring that no competitor is ever able to enter the same market

13. What is meant by 'adding value' in a business context?

    • Removing features from a product so that it costs less to produce
    • Increasing the number of products made in a factory each single day
    • Reducing the price of a product so that it is the cheapest in the market
    • Making a product more desirable so that customers see it as worth more

14. A firm adds a free delivery service to its existing food products. Which type of value is this?

    • Quality, because the delivery service makes the food taste better to customers
    • Convenience, because customers get the goods without making a separate trip
    • Branding, because the delivery service carries the firm's name on its vans
    • Design, because the delivery service changes the look of the product itself

15. Which factor is least likely to add value for a customer buying a sofa?

    • A long warranty that protects the customer against faults for years
    • A comfortable design that suits the customer's room and lifestyle
    • A well-known brand with a strong reputation for quality furniture
    • A higher number of staff working in the back office of the firm

16. Which of these is most likely to increase the value a customer sees in a product?

    • A product that is made in the largest factory in the region each year
    • A product that is sold in the largest number of shops across the country
    • A product that has the lowest possible price compared with its rivals
    • A recognised brand name backed by a reliable reputation for quality

17. A firm reports that its sales are rising because customers trust its products. What is the main value being added?

    • Greater speed, because the firm's products reach shops more quickly
    • Lower cost, because the firm has reduced its prices for every product
    • Wider choice, because the firm has added many more products to its range
    • Quality and reliability, which build trust and repeat custom

18. Which of these is an example of the purpose of business activity relating to society?

    • Avoiding any contact with local people to protect the firm's reputation
    • Producing goods that few people want so that the firm can stay small
    • Raising prices above the level that customers are willing to pay for it
    • Producing goods that people need, such as affordable medicines for patients

19. Which action best shows a business adding value through its unique selling point?

    • Offering a product that competitors cannot match because it uses a special ingredient
    • Reducing the variety of products so that customers have fewer choices
    • Copying the product that the leading rival in the market already sells
    • Offering the same product as competitors at a slightly lower price

20. Which of these is the best definition of a business's purpose?

    • To have the largest number of employees of any firm in its industry
    • To hold the largest possible amount of cash in the bank at all times
    • To avoid competition by keeping its products secret from rival firms
    • To meet customer needs by producing goods or services that add value

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