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Unit Four

What is growth?

Economic activity is the amount of buying and selling that goes on in a country over a particular period of time

GDP is the total value of output produced in an economy in a year

Economic growth is the percentage increase in GDP per year

Economic growth can be increased by increasing output by purchasing more resources or using existing resources more efficiently. Resources include:

Land
Labour
Machinery

An investment is when a business spends money on improving the number or quality of their resources.

Physical capital investment - Spending on new assets such as factories or machinery which enable a firm to produce more output

Human capital investment - Spending on training and education which allows workers to be able to produce more output in the future

The government can contribute in economic growth by encouraging investments through reducing taxes on profits and providing grants. The government can also improve the resources that it owns, allowing firms the ability to produce more such as improving transport infrastructure. Infrastructure is a major limiting aspect of economic growth in LEDCs.

Does growth increase the standard of living?

Standard of living is the amount of goods and services a person can buy with their income in a year.

Economic growth > GDP rises > Average standard of living rises

GDP per capita is the value of output produced by a country in a year divided by the population of that country.

Problems using GDP:

Distorted GDP when population of the country is small
GDP assumes that everybody in a country is equal

Income inequality is where there is a difference in income between different groups of people within a country

Alternative to GDP:

Quality of life- An individual’s overall sense of wellbeing. It can be measured by health, education or the amount of goods and services a person buys
Infant mortality rates- The percentage of those who do not survive past their fifth birthday
Life expectancy- Average age which people are expected to live up to
Literacy rates- Percentage of adults who are able to read and write

Can growth be bad?

Negative externalities:

Congestion
Non-Renewable resources being wasted
Waste
Pollution

Can growth be sustainable?

Sustainable economic growth - An increase in GDP which minimises negative externalities faced by future generations

Renewable resources - Resources that are not limited in supply and are naturally replaced in the environment (such as solar)

Energy from Renewable resources are generally more expensive

A CSR report is expected by businesses. Arguably businesses treat their shareholders better in an attempt to add value and charge more for their products (Green wash).

Ethical responsibility - Where a business takes a moral stand point and ensure that its behaviour does not impact stakeholders in a negative way

What can the Government do?

What the government can do to change behaviour:

Taxes (price of product rises, demand goes down)
Subsidies (price of product goes down, demand goes up)
Legislation (laws passed by the government. Legislation can cause the restriction or ban of production of something considered ‘bad’. Those who break the rules are punished)
Regulation (A set of rules imposed to govern the way something is carried out)

Internalising an externality - Turning an unconsidered external cost into a considered private cost which is paid in money. Example includes making the driver of a heavily polluting vehicle pay more tax.

If a business’s costs increase they can pass the cost increase to the consumer or try and increase efficiency by cutting costs elsewhere.

Unit Three

How do businesses grow?

A business grows when it sells more goods and services in one time period than a previous period. Growth enables a business to:

Increase profits
Increase market share (having more control in a market may force rivals out of business)
Take advantage of economies of scale (larger businesses can achieve lower average costs)

Internal growth - A business increases in size by selling more goods/services

How?

Changing the marketing mix
New product development

External growth - A business grows in size due to merger or takeover

Horizontal integration - Acquisition takes place between two businesses at the same stage of the production process
Backward vertical integration - Two businesses at different stages of the chain of production joining together (e.g. Body Shop buying the farms which produced the natural ingredients for their products)
Forward vertical integration - A business joins with another which is further forward in the chain of production
Conglomerate merger - Two businesses join together which have no common business interest

Disadvantages of external growth:

Job losses
      o      Costs are saved by closing facilities which are duplicated (e.g. Head Offices)
Combined business may lead to the loss of identity for individual businesses.

Why do businesses grow?

Why?

Survival
Larger returns for owners
Economies of Scale
Spreading the risk

Bulk-buying economies - When businesses can gain discounts on large orders from suppliers

Technical economies of scale - Reduction of average cost of production due to the use of more advanced machinery

Market power - A measure of the influence of a business over consumers and suppliers. Linked with market share. If you’re in a monopoly, you can increase prices knowing customers wouldn’t shift as there isn’t an alternative. Can also pay less to small suppliers, as the small suppliers need them.

Diseconomies of scale include:

Communication within the business can become more problematic
Workers may feel alienated feeling that they are only a small cog in a large wheel
Large firms may lose their ability to adapt quickly to changes in the market

ICT is helping to avoid some of the communication issues.

Monopoly

Monopoly - A business which has a market share of 25% and therefore can influence the market
It is good for the business as they have market power and therefore their sales and profits are likely to be higher than if there was competition. It is bad for consumers as they may have to pay more

Disadvantages of a monopoly:

High prices
Less choice
Excessive profits made by the business

Advantages of monopoly:

Potentially cheaper prices if larger businesses negotiate lower prices for their raw materials and components (bulk buying economies of scale)
Development of new products (more money for patents)
Natural monopolies- One large business can supply the market with products at lower costs than if the market was supplied by many producers
Better having one set of pipes for a water supply service than many different companies putting their pipes down

Can a big business be controlled?

The Competition Commission investigates mergers, markets and regulated industries. They can block mergers, force companies to sell off assets and make changes to the way markets operate. Any monopoly is subject to investigation by them.

Regulators are independent bodies set up by the government to monitor and regulate business activity. Each industry is assigned a regulator (e.g. Office of Rail Regulation). Only really interested in monopolies.

Regulator monitors:

Prices
Quality of service provided
Seeing that the business is acting in public interest

A business can self-regulate where an industry body made up of representatives from businesses within the industry monitor the actions of members to ensure rules and guidelines are followed.

Pressure group: An organisation which aims to influence the decision of businesses, government and individuals.

Unit Two

Ways in which success can be measured

Profits, however may give false impressions. £1 million profit sounds good but if £100 million worth of sales then it is pretty poor (only 1% profit)

Market share - (The quantity sold by a business / Total sales in the market)*100

Competitiveness - The strength of a business position in the market based upon market share and profit. It reflects whether people are prepared to use the business over its rivals.

Competitive advantage - Advantage a business has over its rivals which help to win customers. The advantages should be difficult to copy (defensible) and unique (distinctive)

Social success - Performance of a business, taking account of social, environmental and ethical factors

Corporate Social Responsibility (CSR) Report - Gives details of the costs of a business’s activity on society and the environment and the measures they are taking to reduce these costs

Business failure

Businesses fail when the revenue they earn from sales cannot cover the costs of production. The business gradually becomes insolvent where they do not have sufficient funds to pay expenses and therefore cannot continue to trade.

Causes of Business failure:

Cash flow, Credit terms - Payments do not need to be made for 30 to 60 days however costs such as wages need to be paid up front
Lack of competitiveness
Change in demand
Failing to get the marketing mix right
Productivity, or Business efficiency

Productivity - Measure of output per worker or machine per period of time

Changing demand:

Falling income
Changing taste and preferences
Fashions
Advertising
Competition

What problems does the economy face?

Changing demand - Demand refers to the amount of spending that takes place in the economy. The level of demand in the economy may change due to:

The level of economic activity (depends on buying and selling that takes place in an economy)
Interest rates
Consumer confidence
Demand from foreign customers

Interest rates - High interest rates = cost of borrowing is high. This may put off those thinking of taking out a loan, which is important for expensive items such as cars. Households with a mortgage are also affected.

Families may have more or less disposable income which may affect how much they spend.

Consumer confidence -  The measure of how prepared consumers are to spend money.  If unemployment was rising then people would have less consumer confidence as they would believe their job is under threat.

When the economy is doing well, people may be prepared to spend money on items regarded as luxuries such as new cars.

Inflation - Measures the change in the average level of prices in an economy. Measured using CPI (Consumer Price Index) which  compares the price of a typical  basket of goods in one time to another time period.

Inflation may be caused by:

Rise in costs of production being passed on to the consumer at higher prices. Due to;
      o Rising raw material prices
      o Higher wage costs
      o Increase in the process paid for imported goods
A rise in the level of demand in the economy- especially when supply is unable to keep up
      o Rising wages
      o Increased customer confidence

External shock: An unanticipated change in demand or inflation caused by factors beyond the control of the country e.g. Increase in oil prices

Internal shock: An unanticipated change in demand or inflation caused by factors within the country. For example a drought causing wheat prices to increase which would disadvantage consumers and business which use wheat.

Unemployment can be measured using:

Claimant Count (monthly count of those claiming unemployment benefits)
Labour Force Survey (measure based on a monthly survey to identify who is seeking work)

Costs to an individual of unemployment:

Lower level of income > lower standard of living
Loss of self-esteem
Losing skills
Family break-up

Costs to society of unemployment:

Less Tax revenue to the government
Cost to government for benefits
Crime
Impact on other businesses

Exchange rates

Changes due to supply and demand. If Britain increased their rate of interest, the demand for pounds would increase as foreign investors would convert their currency to pounds to save in the UK banks which now have had higher interest rates. The increase in demand would mean the exchange rate of the pound increases.

Unit One

In economics, the major problem is scarcity of resources where resources are limited in supply e.g. raw materials, time.

Trade-off: The selection of one choice results in the loss of another

Opportunity cost: The loss of the next most desired alternative when choosing a particular course of action

Price sensitivity 

A service/product is price insensitive when changing the price, leads to a small change in demand. Reasons for price insensitivity include:

It’s a necessity
Few substitutes
Only takes up a small proportion of an individual’s finance

Stakeholders

Stakeholder - Groups interested in the performance of a business

Shareholders - Owners of a limited company. Shares bought represent part ownership of the company.

Competition Commission - The body which investigates when firms merge or are taken over. They decide whether such activity is in the public interest. It can prevent merges or take-overs where these are seen to reduce the level of competition.

Dividends - Payments made to shareholders from the profit of a company.

Examples of stakeholders:

Shareholders
Workers
Customers
The Government
Local community

Externalities

Third party - Groups or individuals who are not directly involved in a decision/action

Externalities - Effect of an economic decision on individuals and groups outside who are not directly involved

Negative Externalities - Costs arising from business activity which is paid by people of organisations outside the firm

Positive externalities - Benefits arising from business activity experienced by people/organisations outside the firm. The firm do not receive a payment for the benefits received.

The Crucible - Key Points

Proctor 

The whole storyline revolves around Proctor’s agonizing search for his soul or his integrity and sense of self-respect
He is an upright and honest farmer who is confronted by a challenge to his honesty
On Proctor’s entrance, it is clear that the sexual attraction between him and Abigail still exists
Towards the final act, Proctor feels his honesty had long since been compromised and therefore there is a greater sense of dishonour appearing to go like a saint
“Because it is my name! Because I cannot have another in my life! Because I lie and sign myself to lies! Because I am not worth the dust on the feet of them that hang! How may I live without my name? I have given you my soul; leave me my name!”
“woman”- commanding
Stage direction “He is not quite pleased” suggests there are problems in their friendship and Proctor might have a justification for sleeping with Abigail
The fact that his relationship with Elizabeth has been harmed is clear due to short sentences in Act 2 suggesting lack of proper communication
Rational logic “and why not if they will be hanged for admitting it”. Thinking beyond the Theocracy
Rebellious (may explain why he is attracted to Abigail)
Still regards Abigail as a child and may be sympathetic towards her childhood innocence therefore- “Do you look for a whipping?”
“I will cut off my hand before I’ll ever reach for you again”
“You’ll speak nothing of Elizabeth”
John Proctor is a classic Arthur Miller hero – a man who struggles with the incompatibility of his actions with his self-image
After Abigail admits that it wasn’t witchcraft- “"PROCTOR, his smile widening: Ah, you're wicked yet aren't y'!” Stage direction suggests that he is amused or even charmed by Abigail’s behaviour which is effectively the opposite of Elizabeth.
In Act 3, Proctor ends up publicly staining his good name and getting condemned for witchcraft
In Act 4, Proctor is tempted into admitting his is in league with the Devil with the justification that he was a bad person anyway. This however is a lie.
He refuses to sign, as he doesn’t want to sign away his soul.

Abigail 

Abigail is vengeful, selfish and manipulative which makes her a perfect antagonist to Proctor
Leads this whole thing in order to get with Proctor
In her mind she sees herself as the centre of Proctor’s existence as opposed to an awkward teenager who took advantage of a man’s loneliness and insecurity during his wife’s illness
In Act 1, in order to avoid herself getting pinned, she blames Tituba and others despite the fact she told Tituba to go out and cast the spells.
"I saw Indians smash my dear parents' head on the pillow next to mine" Being exposed to such brutality at a young age, may explain her brutality
She’s female, orphan, teenager and unmarried which gives her a very low social position
Doesn’t like being respected as a child (shown by reaction to Proctor)
Enjoys having authority (takes authority in social group and uses it for evil in the court)
Act 1- “nervous laugh” shows she is manipulative as she is the opposite (very confident)

Elizabeth 

Virtuous woman who is steadfast and true
She seems to be struggling to forgive her husband and hates Abigail for this reason.
Only crime she commits is lying in court (proves she cares about Proctor)
By the end of Act 4 she understands that she was a cold wife and that’s what caused Proctor to have an affair with Elizabeth

Of Mice and Men - Key Points

George

Guardianship is immediately seen by him preventing Lennie from drinking the scummy water, taking care of his work card, and preparing his meal
George’s language is sharp and commanding. It is also logical, ordered and coherent,
Contrasts Lennie in the fact that he is sullen and bad tempered “He said angrily”. He also swears a lot.
At first has faith in the dream, “Live of the fat of the land” but loses hope towards the end of the text
Admired by the audience for sticking with Lennie
“I ain’t taking it away jus’ for meanness” shows sympathy for Lennie
Lennie “George won’t go away”, shows his faith in George
Candy “We’re gonna do it, George says we are”, shows his authority and influence over other characters
He needs Lennie in order to differentiate himself from the average lonely person. Gives him someone to govern – “Get him Lennie!” (commanding)
“Crazy bastard” is a stock phrase
“George never gets hurt” “he’s careful” – Intelligent and streetwise
Wants to escape the poverty, insecurity and inevitable loneliness of a migrant worker
“It’s a lot nicer to go around with a guy you know”
Bond of trust and friendship is tragically highlighted in the closing lines of the novel
Boss- ‘I said what stake you got in this guy’
“Curley punk is gonna get hurt if he messes around with Lennie”
‘Hardly none of the guys ever travel together’

Lennie

“the way a bear drags his paws”
“snorting into the water like a horse”
Act one attempts to directly contrast him with George
Lennie’s language is disjointed and he repeats things. He lives in a world of his own.
“Lennie got up and did the same”
Good nature and gentleness shown “smiled happily” “looked timidly”
Brainwashed with the American dream and seems the only motive for his life to seem worth it. This is seen by the fact that the opening scene has George comforting Lennie with the dream and it also ends that way
The fact that he kills a lady despite having the simplistic aim of stroking something, shows that he is very dangerous considering he is a large strong individual in a world of his own.
Sees George as role model, “Lennie who had been watching, imitated George initiated”
Audience generally pities him
Reminds us that the American dream is flawed
“Lennie’s lip quivered and tears started in his eyes”
‘Don’t you think of nothing but rabbits?’

Crooks

Addressed as Nigger or Crooks. Shows that he is primarily judged around the fact that he is black or handicapped (racial and handicap prejudice)
“Cause I’m black”
“Nobody gets to heaven, and nobody gets no land”. Shows that the American dream is similar to heaven. There isn’t solid proof that it’s possible but it doesn’t stop many people from trying
Deliberately isolates himself
Represents loneliness, shown by the fact he seems threatened by Georges friendship with Lennie
Beaten down by loneliness so much that he doesn’t trust kindness
‘This is just a nigger talkin’, an’ a busted-back nigger’

Candy

Shouting at Curley’s wife’s dead body shows his desperation for a new life
He is a useless character and he understands that
He couldn’t stand up for his pet because he can’t stand up for himself
Represents social discrimination based upon age and handicap. His relatively low position in the social Hierarchy is shown by the fact someone with little social significance like Curley’s wife says “they left all the weak ones here”
Similar to his dog, he has lived beyond usefulness
Candy’s relationship with his dog mirrors that of Georges relationship with Lennie. Lennie and the dog depend on their other half and only they understand their friendship. George also ends up shooting Lennie similar to how Candy wished he killed his own dog than let a stranger do it
Candy adds to the tragedy. As he provides the finance needed for the dream, and George (and now the audience) believe that the dream is possible
‘He stood up suddenly and knocked his nail keg over backwards’

Curley's Wife

Lonely - “You can talk to people but I can’t talk to nobody but Curley else he gets mad”
Quote shows that she is effectively owned by Curley which represents the lack of respect towards women in the 1930’s
Targets Crooks, who is the only one lower in the social hierarchy- “I could get you strung up on a tree so easy it ain’t even funny”
“Nasal and brittle” suggests she is easily breakable which is foreshadowing
Jealous about the fact she is unable to enjoy herself “Ever’body out doin som’pin”
Introduced as a “tart” by Candy, showing that she generally has no respect
Manipulative shown by the fact George is worried about her and tells Lennie to “stay away from her”
Red imagery – red fingernail, red mules. Shows seductive nature.
Animalistic imagery – “ostrich feathers” “bridled” dehumanises Curleys wife
Her name is not known (dehumanises her)
Also has a dream (to be in the movies)
‘I never get to talk to nobody. I get awful lonely’
‘her body flopped like a fish’
‘the discontent and the ache for attention were all gone from her face’

Slim

“Hey Good-lookin”, even he is attracted by Curley’s wife
Stands up for what is right (demonstrated in fight scene)
Seems to be the only one who understands the friendship between Lennie and George
Involved in every crucial decision (Dog getting shot, deciding to shoot Lennie)
“Carlson stepped back to let Slim precede him”- shows respect
Slims character seems stereotypical of a Wild West Hero
“His slow speech had overtones not of thoughts but of understanding beyond thought”
“It was Slims calm invitation to confidence”
Candy describes him as “the jerk line skinner prince of the ranch”

The Boss

“he’s a pretty nice fella” “Gets pretty mad sometimes” – Candy
“wore high-heeled boots and spurs to prove he was not a labouring man” – positions himself above everyone else
Boss has reached American dream. Shows the audience that it is possible and therefore acts as a device to emphasise the tragedy of George and Lennie not being able to reach it
His language mainly consists of questions, showing authority

Curley

“You answer when spoken to”- looking for authority
“He glanced coldy”- Already a disliked character
“I won’t tell” (after the fight)- Shows he is scared of Slim
Threatened by Lennie because he is bigger – “He’s alla time picking scraps with big guys”
“Curley looked threateningly about the room”

The American Dream

Follows the New York Wall Street stock market collapse
Harsh poverty and long-term unemployment
Men, most travelling alone, migrated from ranch to ranch on short-term, poorly paid contracts.
George and Lennie personify the commonplace dream of the migrant worker
“Just says ‘gimme my time’ one night, the way any guy would.

Relationship between Elizabeth and Victor, Portia and Bassiano

Another key relationship presented in the Frankenstein is the relationship between Elizabeth and Victor. The relationship is first introduced towards the end of the first chapter. The novel has been written in a Chinese box structure and this chapter is written in Victors perspective meaning that his description of Elizabeth is a true reflection of his personal views on her. His first views on Elizabeth is “a creature who seemed to shed radiance from her looks” suggesting that Victor initially judged Elizabeth by her beautiful outward appearance similar to how he judged the creature on being evil due to his ugly outward appearance. Victor explains that Elizabeth was “the beautiful and adored companion of all my occupations and my pleasures” which shows that he has already assigned Elizabeth a role in his life and also suggests that he intended to bond with her. Victor repeats many words to do with possession when describing Elizabeth such as “promised gift”, “mine”, “possession of my own”. This shows that he believes and values Elizabeth as an object who he rightfully owns. This reflects the lack of female rights in society at the time when Shelley was writing the book. Shelley had a strong feminist background which may have influenced her decision to make Elizabeth to be a typical woman who stays at home, is effectively owned by her partner and has no real say or opinion.  It serves as a warning that women who follow a life similar to Elizabeth will also die like Elizabeth . Elizabeth was not able to defend herself and ended up dying whilst waiting for her man who didn’t arrive on time. At the end of the Chapter Victor says “since till death she was to be mine only”, which once again shows that he believes he owns Elizabeth but also shows how selfish he is in this relationship. In chapter 22 Elizabeth says “Our union had been the favourite plan of your parents…. A event that would certainly take place”, this shows that she has accepted that Victor owns her. In the whole text Elizabeth plays a passive role, she always stays in Geneva and eagerly waits for the return of her partner, which shows her insignificance in Victor's life.

This relationship can be compared to that of Portia and Bassanio in The Merchant of Venice. One key theme in the relationship is male dominance similar to how Frankenstein effectively owns Elizabeth.  The first on stage appearance of both Portia and Bassanio is Act 3 Scene 2. She says “One half of me is yours, the other half yours” which implies that Bassanio  (if he chooses the right casket) owns her. This shows how females had no rights in Venetian society at the time of writing. Contrastingly to what she says, she seems to have some rights in her relationship with Bassanio. In this scene she counters everything which Bassanio says in a clever and sophisticated way and also holds the floor in the conversation – “Bassanio: Promise me life and I’ll confess the truth Portia: Well then, confess and love”. This is not similar to the relationship between Elizabeth and Victor as Elizabeth rarely talks as opposed to Victor. Whilst Bassanio chooses the casket, she arranges a song to be played which has words with rhythm with lead such as “bread, head”. The fact that a song is required for Bassanio to choose right may suggest that the relationship between Bassanio and Portia is not true love. Bassanio says “Until confirmed, signed, ratified by you” which suggests that he values his relationship as a business deal which once again reinforces the idea that the relationship is not true love. Portia says commits herself to Bassanio saying “yours to be directed as from her lord, her governor, her king” which shows that she accepts to being owned by Bassanio. Portia and Bassanio next major appearance is in the court scene (Act 4 Scene 1). At the beginning of the scene the audience assumes Antonio is about to do. Bassanio is helpless and cannot save his friend. Portia then arrives disguised as a male doctor. She has to disguise herself as a man in order to have a say. She manages to save Antonio by finding a loophole in Shylocks bond. The fact that she managed to save Antonio when Bassanio could not suggests that she holds the power in the relationship . Portia also manages to play the ring trick on Bassanio. The fact that Bassanio gave his ring to what he thought was the doctor who saved Antonio’s life suggests that he values Antonio over Portia which once again shows that he does not really love Portia.