Question

2 Mohammed owns a bakery. He makes bread and cakes. He employs three
workers who help him mix the dough for the bread and cakes, put the
dough into tins, bake the bread and cakes, and serve customers. Mohammed
has calculated that the 'added value of his business is low. His customers
complain when he tries to increase his prices. We can buy the same bread
and cakes at lower prices, they tell him.
a Define 'added value'
[2]
b Identify the opportunity cost to Mohammed of buying a new oven. [2]
c Outline two benefits to Mohammed's business of all of his workers
being able to do all of the jobs in the bakery.
[4]
d Explain two ways in which Mohammed could increase the value added
of his bakery business.
[6]
e A friend told Mohammed, Your business would be more successful if
you only served in the shop and let your workers make the bread and
cakes! Do you agree? Justify your answer.
[6]

Answer 1

Answer:

Redecorating a bakery into a small coffee shop where he can sell sodas and other nonalcoholic drinks beside bagels; ... Paying for educations for his employees so they can perfect their skills in making cakes and bagels.

Answer 2

Answer:

b Identify the opportunity cost to Mohammed of buying a new oven. [2]