Fig. 1 shows information about Ahmad and his commercial activities. Ahmad grows large quantities of vegetables. He uses many of the vegetables to feed his family and he gives away some of them. He takes the surplus vegetables to a market once a week in his van and sells them to people in the local town. Before he comes home, he buys groceries in the self-service store and fish at the harbour. Sometimes he barters vegetables for fish. Fig. 1 Use the information given in Fig. 1 to help you to answer the following questions.

Mark scheme

Marking points from the official mark scheme (May/June 2011). The mark or mark type is shown in brackets.

1. [6] (a) Level 2 (4-6 marks) Candidate has shown to what degree Ahmad is concerned with trade (in context) with reasons (no mention of profit = 5 marks max). Trade is buying and selling for profit. Ahmad is somewhat concerned with trade. He feeds his family with the vegetables and this is not trade. However, once a week he sells the surplus in a market, which is a place for trade, and he also buys groceries and so he is trading. He does not take part in any import/export trade; he is only concerned with one aspect of home trade i.e. retail. By bartering he is swapping goods rather than trading for profit. Level 1 (1-3 marks) Candidate has commented on how Ahmad is concerned with trade or listed some ways in which he is concerned with trade. Ahmad is concerned with trade because he buys groceries and he sells fish.
2. [4] (b) Any four actions × 1 mark each and up to two marks for a well-explained point: check the receipt carefully to find out where the overcharge occurred; return to the self-service store; take the receipt; ask to see the manager; take goods in lieu; ask for the overcharge to be corrected/refund; receive a credit note; or do nothing. Any other relevant point. NB sue, go to police, consumer protection agency/association = 0 marks.
3. [2] (c) (i) Any two points × 1 marks: credit given by small-scale retailers; sometimes called lay-bye; to customers who are known to them; amount owed may be settled weekly/monthly; usually involves only small amounts of money; no contract/letter/paperwork; to encourage customer loyalty. Any other relevant point.
4. [2] (c) (ii) Any two advantages × 1 mark each: may be able to buy when has no cash available/delay payment; will be able to postpone payment; safer than carrying cash/no need to carry cash; simple/quick to use (1 mark max); free credit for a period of time; generally accepted. Any other relevant point.
5. [2] (c) (iii) Any one disadvantage explained: danger of fraud stolen credit cards but losses usually borne by the credit card company; may spend time checking for stolen cards or credit limits; increased paperwork – records and communicating with credit card company; payment of commission to credit card company so loss of income; delays in receiving payment from credit card company may mean cash flow problems; purchase equipment + example. Any other relevant point. (bad debts = 0 marks)
6. [4] (d) Any four advantages × 1 mark each or two advantages explained × 2 marks: flexibility - can go when or where he wants; better supervision of goods carried/less damage; can advertise his business on the side of the van; can undertake deliveries; can transport his family/use for own needs; undertakes regular journeys to the market so cheaper than hiring other transport; better than using a bicycle for heavy vegetables; can take unsold produce to another town; can use the van to sell from (mobile van); can hire himself and his van to others; resale value of an asset. Any other relevant point.