Legislation Practice Questions

Question 1

7 marks

All businesses must follow legislation.

(a)

Which one of the following is an example of a business following consumer law?

A Carrying out a risk assessment in its warehouse
B Describing its products accurately in its advertising
C Paying all employees at least the National Minimum Wage
D Providing employees with protective clothing

/ 1

(b)

Explain one benefit to a business of following employment law.

/ 2

(c)

State and explain two ways in which following legislation may increase the costs of a business.

/ 4

Question 2

5 marks

(a)

Which one of the following laws protects employees from discrimination because of their age, sex or race?

A Equality Act 2010
B Health and Safety at Work Act 1974
C National Minimum Wage Act 1998
D Trade Descriptions Act 1968

/ 1

(b)

Explain one consequence for a business of failing to meet its obligations under employment law.

/ 2

(c)

Table 1 shows information about the employees of a small business after an increase in the national minimum wage.

Table 1

Item	Amount
Number of employees paid the minimum wage	6
Hours worked by each employee per week	20
Minimum wage before the increase	£9.60 per hour
Minimum wage after the increase	£10.20 per hour

Using Table 1, calculate the increase in the total weekly wage cost for the business.

Show your workings.

/ 2

Question 3

5 marks

(a)

Which one of the following is most likely to be a consequence for a business of not following consumer law?

A Lower wage costs
B Customers claiming refunds or compensation
C An increase in market share
D Fewer customer complaints

/ 1

(b)

Explain one impact on a business of an increase in the national minimum wage.

/ 2

(c)

Explain one way consumer law affects how a business sells its products.

/ 2

Question 0

20 marks

Item A: Cedar Lane Café

Cedar Lane Café is owned by sole trader Omar Haddad and is on a busy shopping street in Nottingham. Omar opened the café in 2019. It has 40 seats and serves around 420 customers a week, who spend an average of £9.50 each. Omar employs eight part-time staff, six of whom are paid the national minimum wage.

The government has announced an increase in the national minimum wage. Omar has worked out that this will add about £9 000 a year to the café's wage bill. Two other cafés have opened on the same street in the last year, and Omar knows that many of his regular customers are office workers who buy lunch every day.

To respond to the higher wage bill, Omar is considering installing self-service ordering screens, costing £7 000, so that fewer staff hours are needed. The alternative would be to increase all menu prices by 8%.

(a)

Explain one reason why Omar needs to respond to the increase in the national minimum wage.

/ 2

(b)

Calculate the extra revenue Cedar Lane Café would earn each week if it increased all menu prices by 8% and still served 420 customers. Use the information in Item A.

Show your workings.

/ 3

(c)

Analyse two ways the increase in the national minimum wage could affect Cedar Lane Café.

/ 6

(d)

Recommend whether Omar should install the self-service ordering screens.

Give reasons for your answer.

/ 9

Question 0

20 marks

Item A: Brightwater Cleaning

Brightwater Cleaning is a partnership based in Carlisle, Cumbria. It is owned by Kiran Dhillon and Dale Morton, who clean the offices of 22 local businesses in the evenings. The partnership employs 14 part-time cleaners, most of whom work 15 hours a week.

The cleaners use strong chemical products to clean kitchens and washrooms. New health and safety regulations, made under the Health and Safety at Work Act 1974, mean that any employee using these products must be given protective gloves and goggles, costing £40 for each cleaner, and must complete a half-day training course costing £60 for each cleaner. Employers must also keep a written record of the training that has been given.

Brightwater Cleaning made a profit of £31 000 last year. Kiran and Dale are concerned that meeting the new regulations will reduce their profit at a time when two of their office contracts are due to be renewed. One of the partners has suggested that the cleaners could simply be told to be careful instead.

Item B: Brightwater Cleaning

Kiran and Dale have decided to meet the new regulations. To cover the cost, they are considering raising the prices they charge all 22 office clients, including the two whose contracts are due to be renewed.

(a)

Explain one benefit to a business of providing a safe working environment.

/ 2

(b)

Using Item A, calculate the total cost of the protective equipment and training for all 14 cleaners as a percentage of Brightwater Cleaning's profit last year. Give your answer to 2 decimal places.

Show your workings.

/ 3

(c)

One of the partners has suggested that the cleaners could simply be told to be careful.

Analyse two consequences for Brightwater Cleaning of not meeting the new health and safety regulations.

/ 6

(d)

Recommend whether Brightwater Cleaning should raise its prices to cover the cost of meeting the new regulations.

Give reasons for your answer.

/ 9

Business in the Real World

Influences on Business

Business Operations

Human Resources

Marketing

Finance

Question 1

Question 2

Question 3

Question 0

Question 0