1.1.1 & 1.1.2 MCQ

1.1.1 & 1.1.
2 Edexcel Business
Edexcel GCSE Business

1.1.1: The dynamic nature of business & 1.1.2: Risk and
reward
Multiple Choice Question Test Bank
_____________________________________________
MCQ Test 1
This MCQ test contains 13 questions covering the specification
content for 1.1.1 & 1.1.2: The dynamic nature of business & risk
and reward

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Instructions:
• There are 13 questions in this test.
• Your teacher will determine how long you have to complete
this test and under what conditions.
• Only one answer per question is allowed for questions 1-11
inclusive.
• Two answers should be selected for questions 12 and 13.
• For each answer, completely fill in the circle alongside the
appropriate answer(s).
• If you want to change your answer, you must cross out your
original answer.
• If you wish to return to an answer previously crossed out, ring
the answer you now wish to select.
0 1 A budding entrepreneur who is looking to set up a new enterprise is concerned that the
business might not provide enough of a stable income to maintain his current standard of
living. Which of the following best describes this risk?
A Inability to break even 5

B Lack of security 5
C Business failure 5
D Lack of independence 5
[1 mark]
0 2 Sara decided to start-up a business as a personal trainer, due to her passion for fitness.
Which of the following is the main reason behind Sara’s business idea?
A Earn more money 5

B Pursue an interest 5
C Be her own boss 5
D Work more flexible hours 5
[1 mark]
0 3 Increased concern from consumers over the environment has led to new business start-ups
developing products from recycled materials. These business ideas have come about due to:
A Services that have become obsolete 5

B Products that have become obsolete 5
C Changes in consumer demand 5
D Changes in the interest rate 5
[1 mark]
0 4 Which of the following statements best describes the term, reward?
A The probability that something will go wrong 5
B The chance of loss or damage 5
C When a hoped for outcome does not happen 5
D The benefits gained through business activity 5

[1 mark]
0 5 An entrepreneur has developed a unique product to launch into the market. Which of the
following best describes how this new business idea came about?
A An original idea 5
B Adapting an existing product 5
C Adapting an existing service 5
D Adapting an existing idea 5

[1 mark]
0 6 Which of the following is a financial reason why an entrepreneur might start-up a new
business?
A To make a profit 5
B To pursue a skill or interest 5
C To have more freedom in decision-making 5
D To achieve a work-life balance 5

[1 mark]
0 7 Which of the following best describes the term, obsolete?
When consumers:
A Demand more of a particular product or service 5
B Want, and can afford, to buy more products and services 5
C Can no longer afford to buy a particular product or service 5

D No longer want to buy a particular product or service 5
[1 mark]
0 8 Lack of overall planning and poor decision-making can lead to business failure. This is
known as:
A Poor management 5
B Poor quality 5
C Poor understanding of the economy 5
D Poor sales levels 5

[1 mark]
0 9 An entrepreneur has produced a shaving oil for customers with sensitive skin to eliminate
any pain when shaving. This is an example of a business idea that:
A Was developed and delivered to the market quickly 5

B Solved a customer problem 5
C Offered a cheaper way of doing something 5
D Is aimed at a fast growing market 5

[1 mark]
1 0 A product or service is obsolete when sales:
A Start to rise 5
B Rise rapidly 5
C Growth slows 5
D Fall or come to an end 5

[1 mark]
1 1 Which of the following statements is true in relation to goods and services?
A Services can be touched and held, whilst goods are usually invisible 5
B Goods can be touched and held, whilst services are intangible 5
C Services are visible, whilst goods are usually invisible 5
D Both goods and services are intangible 5

[1 mark]
1 2 Which two of the following are examples of risk that can occur from business activity?
Select two answers:
A Profit 5
B Lack of security 5
C Independence 5
D Business success 5
E Financial loss 5
[2 marks]
1 3 Which two of the following increases the risk of business failure?

Select two answers:
When an entrepreneur:
A Draws up a detailed business plan 5

B Produces goods that do not meet customer needs 5
C Makes a product that stands out from its competitors 5
D Fails to carry out comprehensive market research 5

E Offers exceptional customer service 5
[2 marks]
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1.1.1 & 1.1.

Edexcel GCSE Business

A Inability to break even 5

A Earn more money 5

D Work more flexible hours 5

A Services that have become obsolete 5

D Changes in the interest rate 5

C When a hoped for outcome does not happen 5

D The benefits gained through business activity 5

D Adapting an existing idea 5

D To achieve a work-life balance 5

0 7 Which of the following best describes the term, obsolete?

A Demand more of a particular product or service 5

B Want, and can afford, to buy more products and services 5

C Can no longer afford to buy a particular product or service 5

D Poor sales levels 5

A Was developed and delivered to the market quickly 5

D Is aimed at a fast growing market 5

1 0 A product or service is obsolete when sales:

D Fall or come to an end 5

1 1 Which of the following statements is true in relation to goods and services?

D Both goods and services are intangible 5

1 3 Which two of the following increases the risk of business failure?

A Draws up a detailed business plan 5

D Fails to carry out comprehensive market research 5

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