A-level Business (7132) · Paper 1: Business 1
RA10 predicted paper · June 2027 · Set A · Question paper · Time allowed: 2 hours · Maximum mark: 100
Instructions- Answer all questions in Section A and Section B.
- Answer either Question 21 or Question 22 in Section C.
- Answer either Question 23 or Question 24 in Section D.
- Section A: 15 marks · Section B: 35 marks · Section C: 25 marks · Section D: 25 marks.
- You may use a calculator.
Written by RA10 from a question-by-question analysis of the AQA 7132 papers 2020-2025 and the v2.0 specification. This is not an official AQA paper and does not contain real exam questions.
Section A
Answer all questions in this section. Only one answer per question is allowed.
[1 mark]01Which one of the following best describes a social enterprise?- A A business owned by the government that provides a public service.
- B A business with social objectives that reinvests most of its surpluses to achieve them.
- C A charity that is not allowed to make a surplus.
- D A private limited company that donates 10% of its profit to charity.
[1 mark]02On the Tannenbaum Schmidt continuum, which statement describes the most subordinate-centred style?- A The manager makes the decision and announces it.
- B The manager presents the problem, gets suggestions and then decides.
- C The manager permits the team to make decisions within limits that the manager defines.
- D The manager sells the decision to the team.
[1 mark]03A business needs its sample to include 200 people aged 18-24 and 300 people aged 25-40, and lets interviewers choose who to ask until each group is full. This is:- A cluster sampling.
- B quota sampling.
- C random sampling.
- D stratified sampling.
[1 mark]04Statement 1: 'Price skimming is most suitable when a product has a clear unique selling point.'
Statement 2: 'Penetration pricing is most suitable when demand is price inelastic.'
Read Statements 1 and 2 and select the correct option.- A Statement 1 is true. Statement 2 is true.
- B Statement 1 is true. Statement 2 is false.
- C Statement 1 is false. Statement 2 is true.
- D Statement 1 is false. Statement 2 is false.
[1 mark]05A factory has a capacity of 2 500 units per week. It produces 2 100 units per week. Its capacity utilisation is:- A 16.0%
- B 54.0%
- C 84.0%
- D 119.0%
[1 mark]06Statement 1: 'Quality assurance aims to prevent defects by checking quality at every stage of production.'
Statement 2: 'Quality control is usually carried out by every employee rather than by inspectors.'
Read Statements 1 and 2 and select the correct option.- A Statement 1 is true. Statement 2 is true.
- B Statement 1 is true. Statement 2 is false.
- C Statement 1 is false. Statement 2 is true.
- D Statement 1 is false. Statement 2 is false.
[1 mark]07A product sells for £20 and has variable costs of £12 per unit. Fixed costs are £40 000. If the selling price rises to £22, the break-even output will:- A fall from 5 000 units to 4 000 units.
- B fall from 5 000 units to 3 333 units.
- C rise from 4 000 units to 5 000 units.
- D stay at 5 000 units.
[1 mark]08Statement 1: 'Crowd funding allows a business to raise finance from a large number of small investors, usually online.'
Statement 2: 'Debt factoring increases the total amount of revenue a business receives from its customers.'
Read Statements 1 and 2 and select the correct option.- A Statement 1 is true. Statement 2 is true.
- B Statement 1 is true. Statement 2 is false.
- C Statement 1 is false. Statement 2 is true.
- D Statement 1 is false. Statement 2 is false.
[1 mark]09A business had 160 employees at the start of the year and 180 at the end. During the year 34 employees left. Its labour turnover is:- A 18.9%
- B 20.0%
- C 21.3%
- D 22.5%
[1 mark]10According to Herzberg, which one of the following is a motivator rather than a hygiene factor?- A Company policy
- B Recognition for achievement
- C Relationship with supervisor
- D Working conditions
[1 mark]11A company has non-current liabilities of £30m and total equity of £70m. Its gearing is: [1 mark]12The Bank of England raises interest rates. This is an example of:- A contractionary fiscal policy.
- B contractionary monetary policy.
- C expansionary fiscal policy.
- D expansionary monetary policy.
[1 mark]13A budget airline offers the lowest fares in its market by keeping costs below those of all its rivals. According to Porter, this is:- A cost focus.
- B cost leadership (low cost).
- C differentiation.
- D differentiation focus.
[1 mark]14Statement 1: 'Overtrading occurs when a business expands too quickly without enough working capital.'
Statement 2: 'Synergy means that the combined business is worth less than the two businesses were separately.'
Read Statements 1 and 2 and select the correct option.- A Statement 1 is true. Statement 2 is true.
- B Statement 1 is true. Statement 2 is false.
- C Statement 1 is false. Statement 2 is true.
- D Statement 1 is false. Statement 2 is false.
[1 mark]15Employees resist a change because they do not trust the information they have been given. According to Kotter and Schlesinger, the most appropriate way to overcome this resistance is:- A coercion.
- B education and communication.
- C manipulation and co-optation.
- D negotiation and agreement.
Section B
Answer all questions in this section.
[4 marks]16A factory employs 40 production workers. Each worker is paid £27,600 per year. Annual output is 48,000 units.
Calculate:
(a) labour productivity (units per worker per year)
(b) labour cost per unit.
Show your working. [4 marks]17A business is considering an investment costing £450,000. Its expected net returns are:
Year 1: £120,000
Year 2: £160,000
Year 3: £200,000
Year 4: £210,000
Calculate the payback period, in years and months. Show your working. [9 marks]18A UK furniture retailer imports most of its products and many customers buy using credit.
Analyse how a fall in the rate of inflation might affect the profits of this business. [9 marks]19A household appliance manufacturer is replacing its functional structure with a matrix structure for new product development.
Analyse how this change might affect the speed at which it brings new products to market. [9 marks]20Analyse how the use of big data and data mining might help a supermarket chain to increase its market share. Section C
Answer either Question 21 or Question 22.
[25 marks]21'Herzberg's two-factor theory shows that pay will never motivate employees.'
Do you agree? Justify your view.
OR
[25 marks]22To what extent is the Tannenbaum Schmidt continuum useful in helping managers choose the most effective leadership style?
Section D
Answer either Question 23 or Question 24.
[25 marks]23To what extent is Porter's five forces the most useful tool for a business deciding whether to enter a new market?
OR
[25 marks]24Will selling through several channels (multi-channel distribution) always make a business more competitive than selling through a single channel?
Justify your view.