Lesson 2.1.4a

2.1.4a Ethical considerations and trade-offs with profit Quiz: Pearson Edexcel Business, Unit 6

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 2.1.4a, Ethical considerations and trade-offs with profit: 20 multiple choice questions for the Pearson Edexcel GCSE Business (1BS0), Unit 6: Growing the business, written with Revision Ninja.

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The 20 questions

  1. An ethical consideration in business is:

    • using the cheapest supplier regardless of conditions
    • treating stakeholders fairly, such as paying a fair wage
    • maximising short-term profit at any cost
    • avoiding all taxes wherever possible

  2. A trade-off between ethics and profit means:

    • choosing an ethical option may reduce short-term profit
    • ethics only matters for non-profit organisations
    • profit and ethics never conflict in any case
    • ethical choices always increase profit

  3. Which action is an ethical decision that may cost profit?

    • Cutting staff pay to the legal minimum to save on costs
    • Selling products with hidden extra charges added at checkout
    • Paying suppliers a fair price though a cheaper one exists
    • Using child labour in the factory to reduce production costs

  4. Which is a stakeholder that an ethical decision could affect?

    • The local sports calendar
    • Employees
    • An annual national holiday
    • The weather over the factory

  5. Fair trade products are an example of:

    • a merger strategy with a rival business in the same sector
    • an ethical business choice that may pay producers more
    • a tariff placed on imports to protect home producers
    • a trade bloc agreement between several member countries

  6. Which is a possible consequence of a business choosing ethical sourcing?

    • No effect on any stakeholders at all
    • Higher costs, and possibly higher prices for customers
    • Lower costs and no change in customer prices
    • Guaranteed higher market share in every case

  7. A business that pays its staff above the legal minimum is making a decision that is:

    • a takeover decision that gains control of a rival firm
    • unethical, because paying more than required wastes money
    • ethical, but it may reduce profit in the short term
    • a tariff decision that protects the business from imports

  8. Which statement shows a trade-off between ethics and profit?

    • A firm has no ethical obligations to anyone at all
    • A firm pays more for sustainable cotton, so its profit margin is lower
    • A firm's profit is unaffected by the behaviour of its suppliers
    • A firm cuts all costs and its profit rises with no other effects

  9. A firm pays £2 per item to an ethical supplier instead of £1.60 from a cheaper one. For 10,000 items, how much extra does it pay?

    • £3,600
    • £40,000
    • £400
    • £4,000

  10. A retailer's profit margin falls from 20% to 15% after switching to fair trade suppliers. By how many percentage points has the margin fallen?

    • 5 percentage points
    • 35 percentage points
    • 25 percentage points
    • 15 percentage points

  11. A business refuses to sell a product linked to animal testing. Which trade-off does it accept?

    • A legal exemption from all taxes
    • Higher profit with no effect on its reputation
    • Lower sales in exchange for a better ethical reputation
    • No change in sales or reputation at all

  12. A shop stops selling cheap clothing made in unsafe factories. What is the most likely short-term effect?

    • An automatic reduction in tariffs
    • Lower sales and profit
    • No effect on any stakeholder
    • Higher sales and profit

  13. A café decides to pay its staff a living wage. Which stakeholder benefits most directly?

    • Rival cafés in the same area
    • The bank that lends to the café
    • Government tax collectors
    • Employees

  14. A company plans to use recycled packaging costing 5p more per unit. It sells 200,000 units. What is the extra cost?

    • £1,000
    • £100,000
    • £10,000
    • £10

  15. Which decision best shows an ethical trade-off with profit for a clothing firm?

    • Paying for independent safety audits of its factories
    • Buying the cheapest fabric regardless of its source
    • Cutting its workers' hours without pay
    • Hiding supplier problems from customers

  16. A business is criticised for using suppliers that pay low wages. Which stakeholder is most directly affected?

    • The company's own bank
    • The workers in the supplier's factories
    • The local government's tax office
    • Shareholders of unrelated firms

  17. A company stops using products that harm local wildlife, reducing sales by 8%. Which kind of decision is this?

    • A product life-cycle extension
    • A tariff decision
    • An ethical trade-off with profit
    • A merger decision

  18. An entrepreneur only sells ethically sourced goods even though competitors undercut her prices. How best is her approach described?

    • A way to ignore all stakeholder interests
    • A strategy to increase the number of tariffs she faces
    • A commitment to ethics that may limit her profit
    • A method of entering overseas markets quickly

  19. Ethical behaviour may still benefit profit in the long run. Which reason is the strongest?

    • It eliminates competition from rivals in the market permanently
    • It guarantees the firm a government subsidy every year
    • It removes all costs from the business in the long run
    • It can build customer loyalty and a good reputation

  20. A firm pays £50,000 more for ethical supplies. It gains new customers worth £80,000 of extra revenue, with no other extra costs. What is the net gain?

    • £30,000
    • £130,000
    • £50,000
    • -£30,000

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