OCR GCSE (9-1) Business (J204) · Spec 6.1, 6.2 and 6.3
Influences on business
Read the notes, then try the questions. Each one is marked the moment you press Check, and shows the right answer and why.
Key ideas
- Ethical considerations are about what is fair and right for people, for example fair pay and honest dealing. Environmental considerations are about the effect on the planet, for example waste and pollution. Economic reasons are about money.
- Acting ethically can cost money but can build a good reputation.
- When consumer income rises, people have more to spend, and demand for many products tends to rise. When it falls, spending on non-essentials is usually first to drop.
- When unemployment rises, fewer people earn a wage, so spending falls. Recruiting can become easier for firms because more people are looking for work.
- Not every business is hit the same way. A discount store may gain when incomes fall.
- Globalisation means businesses trading and operating across the world. The internet has helped. A multinational operates in more than one country, and may use an international brand while adapting products to local tastes.
Key terms
- Ethical
- Connected to what is seen as fair and right.
- Consumer income
- The money people have to spend.
- Unemployment
- People who want a job but cannot find one.
- Globalisation
- Businesses and markets becoming linked across the world.
- Multinational
- A business that operates in more than one country.
Common mistakes
- Mixing up ethical, environmental and economic points. Ask yourself: is it about fairness to people, harm to the planet, or money?
- Saying a multinational is just a big business. The key idea is that it operates in more than one country.
- Saying unemployment helps sales because people have more time. Time is not the same as money.
- Saying a change in the economy affects every business in exactly the same way.
Exam tip
Questions on this topic usually sit on a named business, often a larger firm. In an Evaluate question, weigh up both sides, use facts from the text, then make a clear decision and say why. A decision with no link to the business in the text is capped.
Free practice questions
5 questions, 10 marks. Answer, then press Check. The marking guide explains how the marks are worked out. Nothing is saved.
- Question 1 · Multiple choice[1 mark]
Consumer incomes rise across a region. What is most likely to happen to sales at a luxury restaurant there?
- Question 2 · Multiple choice[1 mark]
Unemployment rises in a town. What is the most likely effect on a shop selling non-essential gifts there?
- Question 3 · True or false[4 marks]
Are these statements about consumer income and unemployment true or false?
1. When consumer income rises, demand for many products tends to rise.
2. Rising unemployment tends to increase the amount customers spend.
3. High unemployment can make it easier for a firm to recruit staff.
4. Falling consumer income affects all businesses in exactly the same way.
- Question 4 · Fill the gaps[3 marks]
Complete the passage using the word bank.
Word bank: raising · cutting · profit · falls · rises · income
When unemployment rises, fewer people receive a wage, so consumer falls.
With less to spend, demand for non-essential products .
A business may respond by its costs or lowering prices.
- Question 5 · Multiple choice[1 mark]
What is a multinational company?