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Pearson Edexcel International Advanced Level
Tuesday 28 May 2024
Afternoon (Time: 2 hours) Paper
reference WEC13/01
Economics 🞍 🞍
International Advanced Level
UNIT 3: Business behaviour
You must have: Total Marks
Source Booklet (enclosed)
Instructions
•• Use black ink or ball‑point pen.
Fill in the boxes at the top of this page with your name,
centre number and candidate number.
• Answer ALL questions in Section A and Section B.
•• Answer TWO questions in Section C.
Answer the questions in the spaces provided
– there may be more space than you need.
Information
•• The total mark for this paper is 80.
The marks for each question are shown in brackets
– use this as a guide as to how much time to spend on each question.
• Calculators may be used.
Advice
•• Read each question carefully before you start to answer it.
Check your answers if you have time at the end.
Pearson Edexcel International Advanced Level International Advanced Level UNIT 3: Business behavior QP MAY 2023
DO NOT WRITE IN THIS AREA
Questions must be answered with a cross in a box . If you change your mind about an answer,
put a line through the box and then mark your new answer with a cross .
1 In 2021, Koji Sato, the CEO of Toyota, stated that technical economies of scale were
one of the main reasons for the company’s success.
Which one of the following results from technical economies of scale?
A An increase in purchasing economies
B A decrease in advertising costs
C An increase in short‑run average costs
D A decrease in long‑run average costs
(Total for Question 1 = 1 mark)
DO NOT WRITE IN THIS AREA
2 The table shows the costs for a small hairdressing business as it increases the number
of haircuts.
Number of Total fixed Total variable Marginal cost
haircuts costs ($) costs ($) ($)
1 50 12
2 50 18
3 50 26
4 50 36
Which one of the following is the marginal cost of increasing the number of haircuts
from 2 to 3? You may use the blank column for your workings.
DO NOT WRITE IN THIS AREA
A $4.00
B $8.00
C $8.66
D $12.50
(Total for Question 2 = 1 mark)
2
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, 3 In 2022 the pharmaceutical company GlaxoSmithKline (GSK) demerged from the
consumer health business Haleon. GSK’s shareholders believed that the businesses
would be able to work more successfully as separate companies.
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Which one of the following is the most likely reason why GSK decided to demerge
from Haleon?
A To benefit from external economies of scale
B To diversify the business
C To achieve diseconomies of scale
D To focus on its core business
(Total for Question 3 = 1 mark)
4 The diagram shows the short‑run costs and revenues for a farmer producing wheat
in India.
Cost and MC
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revenues
AC
P D = AR = MR
0 Q Output
Which one of the following is most likely to occur in the long‑run?
A Additional wheat farmers will enter the market
B Some wheat farmers will leave the market
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C The wheat farmer will make supernormal profit
D The wheat farmer will make a loss
(Total for Question 4 = 1 mark)
3
🞍🞍🞍🞍 Turn over
, 5 A profit maximising firm decides to change its objective to revenue maximisation.
Which one of the following combinations is the most likely impact of this decision?
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Supernormal profit Price
A No change No change
B Increase Increase
C Decrease Decrease
D Increase No change
(Total for Question 5 = 1 mark)
6 A 2022 study found that the geographical mobility of labour in the USA has been
decreasing for the last 30 years.
Which one of the following is most likely to cause a decrease in the geographical
mobility of labour?
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A An increase in the skills of the workforce
B An increase in relocation grants provided by the government
C An increase in average house prices and rents
D An increase in the availability of affordable housing
(Total for Question 6 = 1 mark)
TOTAL FOR SECTION A = 6 MARKS
DO NOT WRITE IN THIS AREA
4
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