Business Economics

1. General Assessment Guidance
 Your summative assessment for Business Economics is a Coursework submission.
 The deadline for submission is 12:00 PM (Midnight) on Tuesday 26th April 2016.
 You are required to submit your assessment via Turnitin online access. Only submissions made via the
specified mode will be accepted and hard copies or any other digital form of submissions (like via email
or pen drive etc.) will not be accepted.
 For coursework, the submission word limit is 1,500 words. You must comply with the word count
guidelines. You may submit LESS than 1500 words but not more. Tables, diagrams, bibliography,
appendices, annex and headings are NOT included within word count calculations. You must specify
total word count on the front page of your report.
 For coursework, please use font size 12 for body text and the typeface (font) should be Arial or Times
New Roman with minimum 1.5 spacing.
 For headers and titles, please use font size 14. Your submission must have standard margins and page
numbers.
 Please use English (UK) as your language in the submission.
 Do not put your name or contact details anywhere on your submission. You should only put your student
identification number (SRN) which will ensure your submission is recognised in the marking process.
 A total of 100 marks are available for this module assessment and you are required to achieve minimum
40% to pass this module.
 You are required to use only Harvard Referencing System in your submission. Any content which is
already published by other author(s) and is not referenced will be considered as a case of plagiarism.
You can find further information on Harvard Referencing in the online library on the VLE. You can use the
following link to access this information:
http://my.bpp.com/vle/mod/data/view.php?d=223&rid=596
 BPP University has a strict policy regarding plagiarism and in proven instances of plagiarism or collusion,
severe punishment will be imposed on offenders. You are advised to read the rules and regulations
regarding plagiarism and collusion in the GAR and MOPP which are available on VLE in the Academic
registry section.
 You should include a completed copy of the Assignment Cover sheet. Any submission without this
completed Assignment Cover sheet will be considered invalid and not marked.
BPP University Business School
2. Assessment Brief
2.1. Case Study
The case study is based around the fictional company BikeTime PLC. You will be using your Economics
knowledge to help the business make business decisions.
2.2. Questions
There are 5 questions in the case study that cover the 9 weeks content of the module. All the questions must
be answered.
2.3. Assessment Submission Structure
The coursework should be written as a report. The assessment needs a brief introduction and then to fully
answer the 5 questions. The coursework needs to be referenced using Harvard referencing.
2.4. Assessment Marking Scheme
The assignment is marked out of 100. The following table shows the mark allocation and the approach
required.
Assignment Part Mark Approach
Question 1 20 Short answers.
Question 2 20 Short answers.
Question 3 20 Short answers.
Question 4 20 Short answers.
Question 5 15 Short answers.
Presentation grade 5
Total 100
BPP University Business School
Business Economics – Coursework April 2016
You are an Economics Business Consultant that helps businesses understand the world around
them. Your advice is designed to help a business operate more efficiently, reduce risks and
maximise shareholder wealth.
BikeTime Plc (BikeTime) is a specialist cycle manufacturer and a member of the FTSE 250.
BikeTime has two main products, a mountain bike and a road bike. It operates from one large
factory in Liverpool. The production process involves a significant usage of steel and electricity.
The business is operated by the Managing Director and four other Directors.
Currently the business uses half of its resources to produce mountain bikes and half its resources to
produce road bikes. In the last financial year, it made a profit of £70 million from sales of £700
million. The profits and sales currently come equally from mountain bikes and road bikes. It expects
to have similar sales and profits this year.
BikeTime’s share price has closely followed the FTSE 250 index.
BikeTime sells half of both products in the UK and half internationally. Internationally their main
market is the EU. In recent years the business has struggled with wild changes in the market price
for cycles and in changes in the business environment. Changes in interest rates and government
policy have come as a surprise. BikeTime feel they need to understand economics better in order to
aid business decisions.
You have been asked to advise BikeTime on economic matters. Each of the five questions are from
one of the five directors. Please respond to the Directors formally answering all of their questions in
under 1500 words. Ensure you include a brief introduction. Your report must be referenced using
Harvard referencing.
UK Mountain Bike
Manufacturer Market Share (%)
BikeTime (16%) Cycles X (13%) Rider (14%)
Roadster (22%) RoadKing (20%) Other (15%)
UK Road Bike Manufacturer
Market Share (%)
BikeTime (16%) Cycles X (19%) Rider (17%)
Roadster (16%) RoadKing (20%) Other (12%)
BPP University Business School
Q1.
a) What is the economic problem? (2 marks)
b) Give an example of opportunity cost for BikeTime. (3 marks)
c) Which economic system is BikeTime operating in? Explain one potential benefit and one
drawbacks of this system. (5 marks)
d) What are Stakeholders? Select 2 significant Stakeholders for BikeTime and explain why it is
important for the business to take these stakeholders into consideration when making
decisions. (10 marks)
Q2
a) Looking at supply, demonstrate through a diagram how mountain bikes becoming more
expensive to produce will affect the supply for road bikes. What happens to the price and
quantity supplied for road bikes? (5 marks)
b) BikeTime has discovered that if they were to increase the price of mountain bikes by 10%
from £100 to £110, the demand would fall by 5%. What is the product’s price elasticity of
demand? Why might this be the case? (5 marks)
c) Which type of market structure does BikeTime operates in within the UK? List four ways how
this differs from another type of market structure. (5 marks)
d) Describe how the cycle market in the UK might fail. How might a government intervene? (5
marks)
BPP University Business School
Q3.
a) The economy is currently in the early stages of an upturn. The government is keen to have
an expansionary fiscal policy to help increase growth. Explain to the BikeTime how the
government will do this. Use the circular flow of income and your knowledge of the business
cycle to explain. How might BikeTime be affected by this policy? (10 marks)
b) The government believes that the economy would benefit from manufacturing greater
amounts of light weight, strong carbon fibres. They are planning a market orientated
approach to supply side policies. Explain how the government may achieve their market
orientated approach? How might BikeTime be affected by this policy? (10 marks)
Q4.
a) What impact does a strengthening pound (£) have on BikeTime? (4 marks)
b) Explain how the relationship between risk and reward will affect the interest rate and terms
of a bank loan given to BikeTime compared with its competitors. (4 marks)
c) BikeTime has half of its sales from trading internationally. List a benefit and a drawback of
trading internationally. (2 marks)
d) Many countries have protectionist measures restricting trade with other countries. Explain a
method of how countries restrict trade. Evaluate whether it is good for a country to restrict
trade. (10 marks)
Q5.
a) Explain how one international economic organization is aiming to promote globalisation. How
might this affect BikeTime? (5 marks)
b) Looking at one key current global markets explain how these may effect BikeTime now and
in the future. These could include: FTSE, Pound / Euro Exchange Rate, Oil and relevant
Commodity markets. (10 marks)
The coursework will also be marked on its presentation. This will include a brief introduction,
accurate spelling, grammar and appropriate language used. (5 marks)

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