Page 58 - Cambridge IGCSE Business Studies
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Cambridge IGCSE Business Studies Section 1 Understanding business activity
S S
Revision checklist Exam practice questions
● The main forms of business 1 An and Bo are in partnership together. They buy and renovate properties
organisations found in which they then rent out or sell to other people.
the private sector are sole
The business has been going for six years and is a profi table business.
traders, partnerships,
limited companies, franchises They want to expand the business to offer a maintenance and repairs
and joint ventures. service to both the private sector and public sector.
● There are advantages However, the partners do not have the capital needed for this expansion.
and disadvantages to
Bo’s sister, Jiao, has said that she is prepared to invest in the business in
each form of business
organisation. One of the most return for a share in the profi ts.
important disadvantages of
An and Bo are also considering changing the legal structure to a private
unincorporated businesses
limited company.
is that the owners have
unlimited liability for any
a Identify two features of private sector organisations. [2]
debts of the business.
b What is meant by ‘public sector’? [2]
● Most countries will have
both a private and public c Identify and explain two disadvantages to An and Bo of being a
sector. Unlike organisations
partnership. [4]
in the private sector, public
sector organisations are d Identify and explain two benefi ts to An and Bo of expanding their
more concerned with business. [6]
social objectives than
e Do you think the partners should become a private
profit objectives.
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limited company? Justify your answer. [6]
2 Mactar is a public limited company based in Country X.
They specialise in the construction of motorways and other major road
networks. KC Diggers is an incorporated business in Country Y. They
manufacture large earth-moving equipment which they sell or hire to
the construction industry.
The government of Country Y has recently announced plans to extend
the country’s motorway network. It is planning a new motorway which
will run 120km from the north to the south of the country. To speed up
the completion of the motorway, the government is offering the work to
private sector businesses.
Mactar has asked KC Diggers to join it in a joint venture so that
it can bid for the contract to construct the new motorway.
a Identify two features of an incorporated business. [2]
b What is meant by ‘private sector’? [2]
c Identify and explain two advantages to Mactar of
being a public limited company. [4]
d Identify and explain two possible reasons why Mactar might want
to expand into Country Y. [6]
e Do you think it is good idea for Mactar to enter into a joint venture
with KC Diggers? Justify your answer. [6]
Total available marks 40
