Joshua owns a small fishing boat and earns money by catching fish. He sells the fish at the local street market and also to his friend, Abel, who owns a restaurant. Joshua buys fishing nets when they need to be replaced.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [2] (a) (i) 1 mark for each feature stated to a maximum of two features
2. • Has stalls
3. • Stalls hired from local council
4. • Dependent on weather
5. • Not permanent building
6. • Traders usually sell one line of goods/seconds/poor quality/unbranded goods/variety of goods
7. • Traders often make what they sell
8. • Goods sold for cash
9. • Traders often travel from town to town
10. • Operate on different days of the week or, e.g. long opening hours
11. • Bargaining often seen
12. Accept any other relevant points.
13. [2] (ii) 1 mark for each type named to a maximum of two types (no marks for e.g. shoe shop)
14. • Shops with only one branch/independent retailer/unit retailer/convenience store
15. • Pedlars
16. • Hawkers/street vendors
17. • Kiosks
18. • Mobile shops/motor van
19. • Newspaper stand
20. • Speciality store
21. • Automatic vending machines
22. • Tuck shop
23. Accept any other relevant points.
24. [2] (b) (i) 1 mark for each other type of production
25. • Secondary
26. • Tertiary
27. [4] (ii) Valid points include (4 × 1 marks)
28. • Yes, he is involved in trade (1) as trade is the buying and selling of goods (1) using money (1) to make a profit (1)
29. • He buys fishnets (1) and sells the fish at the local street market/to Abel (1) and completes the channel of distribution (1)
30. Accept any other relevant points.
31. [4] (c) 1 mark for a statement of a wholesaler's services and a further 1 mark for an explanation up to a maximum of two services (2 × 2 marks)
32. • A wholesaler would buy some of Joshua's catch for an agreed price/in bulk (1) and then sell it to his customers/in small quantities (1)
33. • A wholesaler will break bulk (1) and sell part of Joshua's catch to many different retailers (1)
34. • The wholesaler may package the fish (1) ready to be sold by the retailer (1)
35. • The wholesaler can provide advice (1) on customer tastes/what is selling well/how to operate his business (1)
36. • Provide advertising (1) to inform/persuade consumers to buy fish or use of an e.g. of an advertising media (1)
37. • Can provide credit (1) so consumers can pay later (1)
38. • Prepare the fish for sale (1), e.g. processing/packaging/labelling/no need to package himself (1)
39. • Can provide transport (1) deliver the fish (1)
40. • Risk-bearing (1) will bear loss if demand falls (1)
41. • Provide immediate payment (1) in cash (1)
42. • Can provide a warehouse (1) where fish will be stored (1)
43. Accept any other relevant point.
44. [6] (d) Level 2 (4-6 marks) Has discussed both business organisations and has given a reasoned decision. (If a candidate has discussed only one business organisation/one-sided answer award 4 marks max)
45. Level 1 (1-3 marks) Has commented on one or both business organisations with/without a decision
46. • Both sole traders and partnerships have unlimited liability.
47. • Sole trader is easy to set up, whereas partnership slightly more complicated.
48. • Sole traders keep all their profits, while partnership profits are shared among the partners.
49. • Sole trader only has the capital from his own savings, whereas partnership can draw capital from each partner.
50. • If Joshua and Abel form a partnership, then each will share in the profits and losses of the restaurant and the fishing boat.
51. • The restaurant will secure supply of all the fish it wants from the fishing boat.
52. • A deed of partnership will have to be drawn up, which may split the profits on a basis other than 50-50.
53. • Evaluation should consider the present profitability of the two businesses and whether one is much more profitable than the other. Joshua and Abel must have a clear understanding of their responsibilities if they are to become partners.
54. Accept any other relevant points.