IGCSE Business Studies Paper-1: Specimen Questions with Answers 9 - 11 of 14

Passage

Hari Joshi runs a textile manufacturing business. He pays his workers a high hourly wage rate. He is thinking of introducing a piece rate element but with a lower hourly wage rate. He is not sure whether such a change would benefit either his business or his employees.

Question number: 9 (1 of 2 Based on Passage) Show Passage

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Do you think that the introduction of a piece rate element will benefit the following? Explain your answers.

(1) His employees:

(2) Mr Joshi’s business:

Explanation

  1. His employees: - Piece rate element actually means payment by results i. e. the employee is paid for each unit of production at a fixed rate. Wage here is determined by the result and accordingly the amount is predefined and paid. Thereby the employees who works hard are benefited as they get wages according to how they work and no benefits will be given to the employees who simply used to sit for hours for making wages.
  2. Mr Joshi’s business: - Mr. Joshi’s business would definitely be benefited by this new policy as the workers would intend to work hard to get more wages and the workers who previously used to just sit for hours would as well work as no wages would be provided until and unless results comes out.

Question number: 10 (2 of 2 Based on Passage) Show Passage

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Explain what is meant by a ‘high hourly wage rate’

Explanation

The term hourly wage rate describes a rate an employer agrees to pay a worker per hour.

Say for example, if a person is to be paid 100/- per hour and he worked for 4 hours than at the end of the day he would be provided with 400/-.

Passage

Priya would use any extra capital to invest in new technology. This should benefit the business by cutting costs and improving efficiency. Some managers have told her that new technology often causes problems.

Question number: 11 (1 of 3 Based on Passage) Show Passage

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Why might new technology cut the costs of a business?

Explanation

Introduction of any kind of technology in an organization cuts the cost of the business and make people aware of new things, advanced ideas etc. some technologies completely change the cost structure for the service they provide for example Skype, provides an inexpensive service that replaces both international phone calls and videoconferencing, which previously could cost thousands of rupees annually. Focusing on the areas where improvement is needed and replacing it with certain improvement via technologies make it succeeds. Introduction of new technology helps in long run as it makes the work more efficient and it consumes less time.