WJEC · Microeconomics · Business growth and objectives
WJEC Economics past paper questions: Business growth and objectives
Every WJEC question on Business growth and objectives from 2017 to 2024: 4 essays and 2 data response questions. It covers Macroeconomic objectives and policy, Aggregate demand and Costs, revenues and profit. Each question links to its paper, mark scheme and examiner report.
SubtopicsMacroeconomic objectives and policy 1Aggregate demand 1Costs, revenues and profit 1
Essay questions on business growth and objectives
Using examples, explain how a firm may experience: i) internal growth and ii) external growth.
Examiner insight
- What to cover
- Three things are needed: internal (organic) growth, external growth, and examples. Use precise terminology for external growth, naming horizontal, vertical and conglomerate integration, then analyse the consequences of each route for the firm.
- Watch out
- Describing the two types of growth earns AO1 only. The AO3 marks come from chains of reasoning about how each is achieved and its pros and cons for the business. Limited use of examples was the main block on top band AO1.
Explain, using a relevant diagram(s), the differences between the objectives of profit maximisation and revenue maximisation.
Examiner insight
- What to cover
- Explain both objectives and contrast them. Profit maximisation at MC equals MR, revenue maximisation at MR equals zero, which is a higher output and lower price. Explain with PED that revenue rises while demand is elastic, and that the extra output beyond the profit maximising point costs more at the margin than it earns.
- Watch out
- The commonest diagram errors were axis labels and reading the cost off the MC curve instead of AC. Relate the written analysis to specific points on your diagram.
Evaluate the extent to which high levels of national (public sector) debt are damaging for LEDCs.
Examiner insight
- What to cover
- Make the answer specific to LEDCs: debt service crowding out health and education spending, debt often in foreign currency so exchange rate risk matters, high borrowing costs, the savings gap and dependence on lenders.
- Watch out
- Do not confuse public sector debt with a current account deficit, and do not spend the essay on policies to reduce the debt, which is not what is asked.
Using examples to support your answer, evaluate the costs and benefits of business mergers.
Examiner insight
- What to cover
- Go wider than the firm. Take the costs and benefits for the firm, consumers, employees, suppliers and the government in turn: economies of scale, market power and higher prices, job losses, monopsony power over suppliers, tax revenue. Name real mergers.
- Watch out
- Most answers sat in Band 2 because they analysed the costs and benefits rather than evaluating them, and because they considered only the firm when the question was broader.
Data response questions on business growth and objectives
Using the data, evaluate one likely benefit for Norwegian Airlines of a merger with IAG.
Case study: CHANCELLOR UNDER PRESSURE
Using examples, define the terms 'government current expenditure' and 'government capital expenditure'.
Question text is quoted from the question papers, © WJEC CBAC Ltd, 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.