Unit 3: Business behaviour · WEC13/01

Edexcel International A-level Unit 3, January 2022

All 8 written questions and 6 multiple choice questions from Edexcel International A-level Unit 3 (January 2022), Business behaviour. Case studies: The car industry. Each question shows its marks and topic, and opens the question paper and mark scheme at the right page.

Question paper Mark scheme Examiner report

Section A

Q11 mark

1 In 2020 the Turkish airline AtlasGlobal ceased its operations. Which one of the following will cause a firm to shut down in the short-run?

AAverage revenue was below marginal revenue
BAverage revenue equalled marginal cost
CAverage revenue was below average variable cost
DAverage revenue equalled average cost

Show the answer

The answer is C.

TopicRevenues, costs and profits

Question paper p.2 Mark scheme p.4 Examiner report p.5 Open in the tool

Q21 mark

Which one of the following can be deduced from the diagram?

AAt output Q1 the firm is maximising its total revenue
BAt output Q1 the firm is minimising its average cost
CAt output Q1 the firm is making normal profit
DAt output Q1 the firm is making supernormal profit

Show the answer

The answer is D.

TopicRevenues, costs and profits

Question paper p.3 Mark scheme p.4 Examiner report p.3 Open in the tool Practise the monopoly diagram

Q31 mark

Which one of the following can be deduced from the table?

AAverage revenue was $32.62 in Q4 2017
BAverage revenue was $29.70 in Q4 2018
CAverage revenue was $32.72 in Q4 2019
DAverage revenue was $30.07 in Q4 2020

Show the answer

The answer is C.

TopicRevenues, costs and profits

Question paper p.4 Mark scheme p.4 Examiner report p.3 Open in the tool

Q41 mark

Which one of the following was the most likely reason for these staff redundancies?

AThe number of airline passengers rose
BThe derived demand for labour fell
CGovernment employment subsidies to airlines increased
DTaxation on airline employees decreased

Show the answer

The answer is B.

TopicThe labour market

Question paper p.4 Mark scheme p.5 Examiner report p.3 Open in the tool

Q51 mark

Which one of the following is the most likely impact of this increase in the minimum wage on shop assistants in the retail industry in British Columbia?

AUnemployment would rise to Q1-Q4
BUnemployment would rise to Q2-Q3
CThe demand for labour would extend from Q1 to Q2
DThe supply of labour would contract from Q4 to Q3

Show the answer

The answer is A.

TopicThe labour market

Question paper p.5 Mark scheme p.5 Examiner report p.3 Open in the tool

Q61 mark

6 A small fruit farm in Namibia is operating in a perfectly competitive market. Which of the following is true for such a firm in long-run equilibrium? Allocative efficiency Profit

ANo Supernormal
BNo Normal
CYes Supernormal
DYes Normal

Show the answer

The answer is D.

TopicPerfect competition and monopoly

Question paper p.6 Mark scheme p.5 Examiner report p.3 Open in the tool

Section B

Case study

The car industry

Extracts: Figure 1 · Extract A: PSA Group and Fiat Chrysler merger · Extract B: Concerns over factory closures · Figure 1: https://www.statista.com/statistics/249375/us-market-share-of-selected-automobile- · Extract A: https://www.autoexpress.co.uk/fiat/108280/stellantis-fca-and-groupe-psa-merger-confirmed · Extract B: https://www.theguardian.com/business/2019/dec/18/peugeot-and-fiat-chrysler-agree-terms-of-

In the extracts: Fiat Chrysler, Alfa Romeo, General Motors, Hyundai-Kia Auto, PSA Group's, Stellantis, USA, China, Chinese, Honda

Q7(a)Calculate2 marks

With reference to Figure 1, calculate the four-firm concentration ratio for the US car market in 2019.

Mark splitApplication 2

TopicBusiness growth, mergers and market structure

Question paper p.8 Mark scheme p.6 Examiner report p.3 Open in the tool

Q7(b)Explain4 marks

With reference to Extract A, explain what is meant by 'horizontal integration'.

Mark splitKnowledge 2Application 2

TopicBusiness growth, mergers and market structure

Question paper p.8 Mark scheme p.6 Examiner report p.3 Open in the tool

Q7(c)Analyse6 marks

With reference to Extract A, analyse two barriers that Stellantis are likely to experience when trying to increase market share in China.

Mark splitKnowledge 2Application 2Analysis 2

TopicBusiness growth, mergers and market structure

Question paper p.9 Mark scheme p.7 Examiner report p.4 Open in the tool

Q7(d)Examine8 marks

With reference to Extract A, examine the impact of an increase in car sales in the USA on the profits of Stellantis. Illustrate your answer with an appropriate diagram.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicBusiness growth, mergers and market structure

Question paper p.11 Mark scheme p.8 Examiner report p.4 Open in the tool Draw it: monopoly diagram

Q7(e)Discuss14 marks

With reference to the information provided and your own knowledge, discuss the possible impact of the merger between PSA Group and Fiat Chrysler on workers and consumers.

Mark splitEvaluation 6

TopicBusiness growth, mergers and market structure

Question paper p.13 Mark scheme p.9 Examiner report p.4 Open in the tool

Section C

Q8OptionalEvaluate20 marks

Evaluate the possible benefits of collusive behaviour between firms. Use a simple game theory model in your answer.

Mark splitEvaluation 8

TopicOligopoly and monopolistic competition

Question paper p.16 Mark scheme p.12 Examiner report p.4 Open in the tool

Q9OptionalEvaluate20 marks

Evaluate methods that a government could use to control monopoly behaviour. Illustrate your answer with an appropriate diagram(s).

Mark splitEvaluation 8

TopicPerfect competition and monopoly

Question paper p.16 Mark scheme p.15 Examiner report p.4 Open in the tool Draw it: monopoly diagram Or: natural monopoly diagram

Q10OptionalEvaluate20 marks

Evaluate the view that revenue maximisation is always the main objective of a firm. Illustrate your answer with an appropriate diagram(s).

Mark splitEvaluation 8

TopicBusiness objectives

Question paper p.16 Mark scheme p.19 Examiner report p.4 Open in the tool Draw it: monopoly diagram

Question text is quoted from the question papers, © Pearson Edexcel, for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.

Section A

Section B

The car industry

Section C

Other years of Edexcel International A-level Unit 3

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