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CIE · IGCSE · Business Studies

Free CIE IGCSE Business Studies
Practice Paper

8 mixed-difficulty practice questions in the style of real CIE IGCSE papers — answers, mark-scheme-style explanations, and the official exam structure all on one page.

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What the real CIE IGCSE Business Studies paper looks like

Paper 1 (Multiple Choice)
40 multiple-choice questions, 1 mark each. 45 minutes. Tests breadth of knowledge.
Paper 2 (Core) / Paper 4 (Extended)
Structured written paper. 1 hour 30 minutes (Core) or 1 hour 45 minutes (Extended). Tests depth of understanding and application.
Paper 6 (Alternative to Practical)
Written paper assessing practical skills for candidates without lab access. 1 hour. Worth ~20% of the total.
Total exam time: ~3 hours, depending on tier (Core vs Extended).
Grading: Grades: A* (highest) to G (lowest), with U (ungraded). Most universities require C or above.

Mini practice paper: 8 questions

Mixed-difficulty questions from across the Business Studies syllabus. Tap "Show answer" after each to check yourself.

Q1 · Difficulty 1/3

Which of the following is an example of a tertiary sector business activity?

  1. Manufacturing steel from raw iron
  2. Growing wheat on a farm
  3. Providing insurance services to customers
  4. Mining iron ore from the ground
Show answer & explanation
✓ Answer: C — Providing insurance services to customers
The tertiary sector encompasses service-providing activities, such as insurance, retail, and banking. Mining iron ore is a primary sector activity involving extraction of natural resources. Manufacturing steel is a secondary sector activity involving processing raw materials. Growing wheat is a primary sector agricultural activity.
Q2 · Difficulty 1/3

A business owner uses their own savings to start a new enterprise. This source of finance is best described as:

  1. Share capital raised from external investors
  2. Personal capital contributed by the owner
  3. Retained profit reinvested from previous trading
  4. A bank loan secured against business assets
Show answer & explanation
✓ Answer: B — Personal capital contributed by the owner
When an owner uses personal savings to fund a business, this is classified as personal capital — money the owner personally invests. A bank loan involves borrowing from a financial institution. Retained profit comes from previous business earnings, not personal savings. Share capital is raised by issuing shares to outside investors.
Q3 · Difficulty 1/3

Which promotional method is best described as a non-paid form of communication about a business that appears in the media?

  1. Sales promotion
  2. Public relations
  3. Personal selling
  4. Direct mail
Show answer & explanation
✓ Answer: B — Public relations
Public relations involves managing the spread of information about a business, including securing unpaid media coverage such as press releases and news stories. Sales promotion involves short-term incentives to boost sales. Personal selling is a paid, face-to-face sales activity. Direct mail involves sending promotional materials directly to consumers at a cost.
Q4 · Difficulty 1/3

Which of the following best defines 'added value' in a business context?

  1. The profit a business makes after deducting wages and overheads
  2. The increase in a business's market share over a financial year
  3. The total revenue earned by a business after paying all its costs
  4. The difference between the selling price of a product and the cost of bought-in materials
Show answer & explanation
✓ Answer: D — The difference between the selling price of a product and the cost of bought-in materials
Added value is specifically the difference between the selling price of a product or service and the cost of the materials and components bought in to make it. Option A describes net profit, not added value. Option C confuses added value with profit after all costs. Option D describes market growth, which is unrelated to adding value.
Q5 · Difficulty 1/3

Which of the following best describes a sole trader?

  1. A business that sells shares to the general public on a stock exchange
  2. A business owned by two or more people who share profits
  3. A business owned by shareholders with limited liability
  4. A business owned and run by one person who keeps all profits
Show answer & explanation
✓ Answer: D — A business owned and run by one person who keeps all profits
A sole trader is a business owned and operated by a single individual who retains all profits but also bears all losses. Option B describes a partnership. Option C describes a public limited company. Option D describes a limited company structure, not a sole trader.
Q6 · Difficulty 1/3

Which of the following best defines market segmentation?

  1. Choosing which product to launch in a new country
  2. Dividing a market into groups of customers with similar characteristics
  3. Setting a single price for all customers in a market
  4. Increasing total sales revenue by reducing production costs
Show answer & explanation
✓ Answer: B — Dividing a market into groups of customers with similar characteristics
Market segmentation means dividing the total market into distinct groups (segments) whose members share similar needs or characteristics. Option C describes pricing strategy, not segmentation. Option A describes a market entry decision. Option B relates to cost management and revenue, not segmentation.
Q7 · Difficulty 1/3

Which of the following best defines a 'stakeholder' in a business context?

  1. A government body that regulates business behaviour and practices
  2. A person or group with an interest in or affected by a business's activities
  3. A manager responsible for making strategic business decisions
  4. A person or group that owns shares in a public limited company
Show answer & explanation
✓ Answer: B — A person or group with an interest in or affected by a business's activities
A stakeholder is any person or group with an interest in or affected by a business's activities, which is broader than just shareholders. Option A describes only shareholders, a subset of stakeholders. Option C describes managers, who are one type of internal stakeholder. Option D describes a regulator, which is one external stakeholder group.
Q8 · Difficulty 1/3

Which of the following best describes an 'economy of scale'?

  1. A rise in average costs as a firm expands its production
  2. A government tax reduction offered to large businesses
  3. A financial penalty imposed when businesses merge
  4. A cost advantage gained as a business increases its output
Show answer & explanation
✓ Answer: D — A cost advantage gained as a business increases its output
Economies of scale are cost advantages that arise as a business grows and increases its level of output, resulting in a lower average cost per unit. Option B is incorrect because economies of scale are not government tax policies. Option C describes a diseconomy of scale, not an economy of scale. Option D is unrelated to economies of scale.
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CIE IGCSE Business Studies FAQ

What does the CIE IGCSE Business Studies exam look like?
The CIE IGCSE Business Studies exam is structured across 3 components. Paper 1 (Multiple Choice): 40 multiple-choice questions, 1 mark each. 45 minutes. Tests breadth of knowledge. Paper 2 (Core) / Paper 4 (Extended): Structured written paper. 1 hour 30 minutes (Core) or 1 hour 45 minutes (Extended). Tests depth of understanding and application. Paper 6 (Alternative to Practical): Written paper assessing practical skills for candidates without lab access. 1 hour. Worth ~20% of the total. Total exam time: ~3 hours, depending on tier (Core vs Extended).
Can I download a free CIE IGCSE Business Studies past paper?
Real CIE past papers are published directly by CIE on their official website. Kramizo doesn't redistribute copyrighted past papers, but we do generate free AI-written practice papers in the exact same style — same command words, same difficulty tier, same mark conventions. Use this practice paper as warm-up, then time yourself on official past papers before exam day.
How is CIE IGCSE Business Studies graded?
Grades: A* (highest) to G (lowest), with U (ungraded). Most universities require C or above. Kramizo's practice questions are tagged with difficulty 1-3 mapping roughly to the lower, middle, and top grade boundaries you'll encounter in the real exam.