CIE Business-Studies Paper-1: Specimen Questions 7 - 8 of 14
Ravi Yadav lives in a city in country Z. The city has a big Indian population. When Ravi was looking for a business opportunity he identified a niche market in selling saris and similar clothes to Indian ladies. He imports the clothes from country X and sells them to retailers in his city.
Question number: 7 (3 of 4 Based on Passage) Show Passage
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A recent report into working conditions in different countries suggested that Ravi’s suppliers paid very low wages to their employees. The report also stated that they employed child labour working long hours. Do you think that Ravi should continue to buy from these firms? Justify your answer.
No, Ravi should not continue to buy from these firms as on moral grounds these firms are doing wrong. Child labor is completely ban all over the world and making small children work for earning money is wrong. Providing workers with lower wages is again wrong morally. Working with such firms are ethically unacceptable and knowing these facts and working with them can also be considered legally wrong. Business means making profit but it does include some ethics and morals which must not be broken.
Question number: 8 (4 of 4 Based on Passage) Show Passage
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If the currency of country Z appreciated in value how would this affect the profitability of Ravi’s business? Explain your answer.
If the currency of the country Z that is where Ravi lives appreciated in the value than he can earn more profit as he has to pay less to buy the products and simultaneously he can sell the product at the same rate. For instance, if Ravi used to pay 100/- to purchase a product and he used to sell that product for 150/- his net profit would be 50/- but now as the currency has appreciated he now pay less say 60/- to purchase a product but still sells it for 150/- now his net profit is 90/-