Section 1 – Short answer questions

[80 marks]

This is a compulsory section. Students are required to answer eight out of ten short answer questions, with each question carrying 10 marks. I recommend that students always start with this section. It covers all elements of the Leaving Cert Business syllabus. Traditionally, this is the best answered section of the exam, with the average mark awarded between 70-75% in recent years.

The question styles range from definitions, calculations, matching terms and circling the correct option given, etc – again encompassing all sections of the Business course. Students should remember that marks are never allocated as a full 10 marks, and are often broken up into (6 marks + 4 marks) or two 5 mark answers, further broken up into (2 marks + 3 marks). As a result, students should always ensure that they write two distinct points for each question to gain maximum marks. My main advice to students is practice. Students should set 35 minutes on the clock, take exam questions from previous years and attempt them all. This will ensure accuracy in timing and approach to the question.

Sample answers to short answer questions which have appeared in recent years:

1. Distinguish between prototype development and test marketing as stages in the development process of a new product. [Marking scheme: 5 marks (3 + 2) + 5 marks (3 +2)]

Prototype development:

- This is the first development of a sample or model of a product.

- It can be used to test the product to see if it conforms to certain standards and to determine what adjustments/ improvements can be made before deciding to go into full production.

Test marketing:

- It involves doing a small-scale trial to identify possible faults, to assess customer reaction to the marketing mix, and to reduce the risk of the product’s failure.

- The product is tested on a sample of potential consumers before going into full production.

2. Explain your understanding of the terms inflation rate and interestrate. [Marking scheme: (3 + 3) and (2 + 2)]

Inflation rate:

- Inflation is the sustained percentage increase in the general level of prices and the cost of living over a period of time, normally one year.

- It is measured by the Consumer Price Index (CPI) which is the percentage increase in the price of goods.

Interest rate:

- Interest rates are the price paid by a borrower to a lender for the use of their money.

- The amount of money the borrower must pay the lender for the use of the lender’s funds is expressed as a percentage of the amount borrowed.

Or

- The reward for money saved/invested over a period of time expressed as a percentage of the amount invested.

-

3. Outline two ways the Government could encourage business

activity in Ireland. [Marking scheme: 5 marks (3 + 2) and 5 marks (3 + 2)

1. The Government could lower personal taxation in the form of lower PAYE and DIRT. This would give employees and consumers more disposable income and therefore increase the demand for goods and services, resulting in an increase in business profitability.

2. The Government could improve the country’s infrastructure and increase spending in telecommunications and broadband, allowing businesses to operate efficiently as well as encouraging business activity and job creation.

4. ‘The goal of the World Trade Organisation (WTO) is to reduce protectionism and allow free trade.’ Illustrate your understanding of the underlined term. [Marking scheme: 6 marks (3 + 3) and 4 marks (2 + 2)]

- Protectionism refers to trade barriers imposed by governments.

- Government actions and policies restrict or restrain international trade. They may be done for economic reasons with the intention of protecting domestic businesses and jobs from foreign competition, or for political or health reasons.

- Examples of these trade barriers include tariffs, quotas, embargos and barriers.

5. Distinguish between ‘directive’ and ‘regulation’ as legislative instruments within the EU. [Marking scheme: 4 + 4 + 2]

- A directive is a legal instrument to implement and enforce EU law in Member States. It obliges them to change their national laws, to allow for EU rules, within a time limit/ deadline. It is binding only as to the results to be achieved, while leaving within prescribed limits the choice of means to be employed to the Member States. An example is the Waste Electrical and Electronic Equipment (WEEE) Directive.

- A regulation is a legislative act of the EU which becomes immediately enforceable as law in all Member States simultaneously. EU institutions can enforce a regulation throughout the EU. They take precedence over national laws. They are self-executing and do not require any implementing measures. For example, the European Social Fund and the Cohesion Fund Regulation 275/94.

6. (A) Define the term trade dispute. [Marking scheme: 4 marks (2 + 2)]

A trade dispute is defined as any dispute between employers and employees, which is connected with the employment/non-employment, or the terms and conditions of employment, of any person. For example, the pay and working conditions of workers.

(B) Outline two types of official industrial action available to employees involved in an industrial dispute with their employer. [Marking scheme: 2 x 3 marks (2 + 1)]

1. Official strike:

- Employees hold a secret ballot to see if the majority want to go on strike. If so, they then give their employer at least seven days’ notice of the strike. The union tells the employees to stop working and pays them strike pay. - The employees may then engage in primary picketing, in an attempt to attract some publicity and support for their cause and to persuade customers not to enter the premises.

2. Work-to-rule:

- To hurt their boss, employees carry out their work following the rules to the letter. They do their basic job and nothing else.

- They are completely inflexible and refuse to do anything extra to help their boss. This often slows down production. As the employees haven’t stopped working, they still get paid.

7. Outline two rights of a ‘data subject’ under the terms of the Data Protection Act 1988/2003 [Marking scheme: 5 marks (3 + 2) and 5 marks (3 + 2)]

1. Right to get a copy of the data:

- You have the right to be given a copy, clearly explained, of all your personal details by writing to the person or organisation that holds these details about you on a computer or in manual form.

- You can also ask the data controller to inform you of any opinions given about you that he holds.

2. Right to have any errors corrected or deleted:

- If you discover that a data controller has details about you that are not factually correct, you can ask them, in writing, to change or to delete them.

- If you feel that a data controller does not have a valid reason for holding your personal details you can ask them, in writing, to remove them.

8. (A) From the following figures calculate the net pay of Hazel Dunne.

Gross pay €50,000; tax credits €6,000; standard tax rate 20%; higher tax rate 41% and cut-off point €36,400. [Marking scheme: 7 marks (calculations)] Workings:

High tax rate [41%]: 50,000 – 36,400 = 13,600 (1)

(B) State two tax credits a person may be entitled to: [Marking scheme: 2 marks and 1 mark]

(i) Personal tax credit [e.g. single/married/widowed] (ii) PAYE tax credit

9. (A) Using the figures below, calculate the net profit percentage (margin) of Kelly Ltd for 2017

Sales €50,000 Gross profit €22,000 Expenses €12,000

(Show your formula and workings)

[Marking scheme: Formula (2 marks), 10,000 (2 marks), 50,000 (1 mark), Answer (1 mark – must include %)]

(B) If the net profit percentage for 2016 was 25%, outline how management could use this information in making decisions. [Marking scheme: 4 marks (2 + 2) decrease and decision]

This result shows a decrease of 5% in the net profit margin for the company, this is a bad trend. It means that the business is relatively less profitable than last year. In order to rectify this, the business could look at decreasing its expenses, for example, employees’ wages.

10. Column 1 is a list of insurance terms. Column 2 is a list of explanations for these terms. [One explanation does not apply to any of these terms]

Match the two lists by placing the letter of the correct explanation under the relevant number below. [Marking scheme: 3 marks + 3 marks + 2 marks + 1 mark + 1 mark]