Revision NotesExam QuestionsFlashcardsPast Papers
IGCSEBusinessCambridge (CIE)Exam Questions6. External Influences on Business Activity6.3 Business & the Environment

Syllabus Edition

First teaching 2025

First exams 2027

Business & the Environment (Cambridge (CIE) IGCSE Business): Exam Questions

Exam code: 0450, 0986 & 0264, 0774

1 hour12 questions
Easy
Medium
Hard
14 marks

Case Study

NLR manufactures a range of branded skincare products, including hand cream. Packaging of the products is important. Like many businesses, NLR makes use of market segmentation. The Marketing Director knows the stage of the product life cycle can influence NLR’s pricing decisions. He is analysing market research data. This shows 85% of consumers expect businesses to respond to environmental pressures.

Outline two ways NLR might respond to environmental pressures.

How did you do?

22 marks

Identify two ways business activity could have an impact on the environment.

How did you do?

32 marks

Identify two ways a business could contribute to sustainable development.

How did you do?

44 marks

Case Study

GreenTech Industries operates a large manufacturing plant producing electronic components. The business has recently faced significant criticism from local residents and environmental groups for polluting the nearby river with chemical waste. The company's reputation has been damaged, with several major clients threatening to cancel contracts. Market research shows that 78% of consumers now consider environmental responsibility when making purchasing decisions. The Managing Director is under pressure from shareholders to address these environmental concerns.

Outline two reasons why GreenTech Industries should respond to these environmental issues.

How did you do?

52 marks

Identify two ways a business could reduce waste.

How did you do?

64 marks

Case Study

EcoManufacturing Ltd operates a chemical processing facility that produces industrial cleaning products. Recent government inspections have revealed that the company has been exceeding permitted emission levels for toxic gases and disposing of hazardous waste without proper treatment. The Environment Agency has issued formal warnings and is considering prosecution under the Environmental Protection Act. The company's insurance premiums have increased by 40% due to environmental liability concerns, and the local council is reviewing their operating licence. Legal experts estimate potential fines could reach £2 million if prosecuted successfully.

Outline two ways EcoManufacturing Ltd may be affected by legal controls related to the environment.

How did you do?

72 marks

Identify two advantages to a business of becoming more environmentally friendly.

How did you do?

16 marks

Case Study

Tom started ALB 5 years ago making trainers (sneakers) out of sustainable materials such as wool. One of ALB’s objectives is to protect the environment. As part of his research, Tom calculated some costs that he could use in his break-even analysis. An extract is shown in the below figure. ALB uses retailers to distribute its products. Tom thinks a successful entrepreneur has to be a good manager.

Break even analysis

Explain one advantage and one disadvantage to ALB of trying to protect the environment.

How did you do?

26 marks

Case Study

RWB manufactures buses. 1,200 people work in its factory. All employees receive off-the-job training. RWB uses financial rewards to motivate its employees. Last year, RWB made a $1.7 million loss. The Managing Director said: ‘There are many external influences affecting our business, including changes in the level of unemployment and new legal controls over business activities which affect the environment.’

Explain two ways RWB might be affected by new legal controls over business activities which affect the environment.

How did you do?

36 marks

Do you think manufacturing businesses should always respond to environmental pressures? Justify your answer.

How did you do?

112 marks

Refer to Appendix 2 and Appendix 3 and other information. Consider the following three ways FO could use to contribute to sustainable development:

  • only use raw materials from sources that replace what they have used

  • only use packaging that can be recycled

  • only use electric vehicles to deliver products.

Which way should FO choose to maximise profit? Justify your answer.

Refer to the following insert when answering the question

How did you do?

212 marks

Consider how the changes in the following three government legal controls could affect CC.

  • Increase in the minimum wage

  • More controls over what can be stated in advertisements

  • No waste plastic can be sent to landfill sites

Which change is likely to have the greatest effect on profit? Justify your answer.

Refer to the following insert when answering the question

How did you do?