EDEXCEL GCSE BUSINESS · PAPER 1
Exam Practice: Legislation and Business
Legislation and business · Understanding external influences on business · Lesson 3 of 5 · 13 marks · 20 minutes
Name Date
Answer all questions. Use the context of the business in the question where one is given.
Question 1 DEFINE [1 mark]
Define the term 'legislation'.
Question 2 STATE [1 mark]
State one area covered by employment law.
Question 3 OUTLINE [2 marks]
Outline one consequence for a business of not meeting health and safety law.
Question 4 EXPLAIN [3 marks]
Explain one impact on a small business of an increase in the National Minimum Wage.
Question 5 ANALYSE [6 marks]
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SOURCE Gemma runs a small shop selling electrical goods such as kettles, toasters and hairdryers. A customer has returned a kettle bought three weeks ago that stopped working. Gemma's shop policy says "no refunds", and she wants to offer only a repair. |
Analyse the impact of consumer law on Gemma's business.
Answers
Check your answer only once you have written one.
Question 1 [1 mark]
Laws passed by Parliament that businesses and people must follow.
▸ Laws / rules made by Parliament or the government 1 mark
Question 2 [1 mark]
Health and safety.
▸ Any one of: recruitment; pay / minimum wage; discrimination; health and safety 1 mark
Question 3 [2 marks]
It could be fined or prosecuted (1), which increases its costs and, if an employee is hurt, could also mean paying them compensation (1).
▸ A consequence identified, e.g. fines / compensation / closure / bad publicity 1 mark
▸ Developed: the effect on the business 1 mark
Question 4 [3 marks]
The business's wage costs would rise (1). It must pay every worker at least the new, higher rate, so its total costs increase (1). This reduces its profit unless it can raise its prices, which could lose it customers to cheaper rivals (1).
▸ An impact identified, e.g. higher costs / lower profit / higher prices / fewer staff hours 1 mark
▸ First linked point of explanation 1 mark
▸ Second linked point of explanation 1 mark
Question 5 [6 marks]
Under consumer law the kettle must be of satisfactory quality, and it stopped working after only three weeks. Because it is within 30 days of the purchase, the customer has the right to reject it and receive a full refund, so Gemma's "no refunds" policy is not legal for faulty goods. Refunding faulty goods increases her costs, especially if a whole batch from a supplier is faulty. However, if Gemma refuses, the customer could take her to court, and could post bad reviews online. For a small shop that relies on local reputation, this could lose her many future customers. By following the law and refunding quickly, Gemma protects her reputation, which means customers are more likely to trust her and return.
▸ AO2 (Application, 3 marks): uses the context - the kettle, three weeks, the "no refunds" policy Level 1-3
▸ AO3a (Analysis, 3 marks): chains of reasoning about the costs of meeting the law and consequences of not meeting it Level 1-3