Chapter 7: Macroeconomic Objectives, AD/AS and National Income

A-level EconomicsAQA / OCR / Pearson Edexcel / WJEC Eduqas12 topicsHigher

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Edexcel A-level Economics Business Objectives - Authored Long Answer Questions

Examiner-style long-answer practice with automatic marking, improvement advice and ProofCoach tracking.

4 questions47 marks70.5 min

standard / hard / synoptic

4 markscalculatestandardEdexcel

E32: Evidence for Business Objectives

Evidence measure with unit	2020 value	2024 value	Context or unit
revenue, cost and profit data	100.0	108.5	index or percentage as stated
a UK plc choosing between profit maximisation and revenue growth	baseline	changed	UK or global context
profit maximisation, revenue maximisation, satisficing and CSR influencing business decisions	lower impact	higher impact	directional evidence

E32A Calculate or define the key economic measure in Business Objectives, using the data evidence provided for a UK plc choosing between profit maximisation and revenue growth.

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9 marksanalysehardEdexcel

Total Revenue and Total Cost: profit vs revenue maximisation

Profit is maximised where the vertical gap between TR and TC is greatest (about 5,000 units). Revenue is maximised where TR peaks (about 8,000 units). Managerial and sales-oriented firms may prefer revenue maximisation.

E32B Using Figure 1 and your knowledge, analyse the economic effects shown by the diagram below in relation to a UK plc choosing between profit maximisation and revenue growth. In your answer, identify the model, curve labels, any shift shown and the likely impact.

Label the horizontal axis and vertical axis precisely with units.
Label the relevant curves and show the direction of shift.
Label the new equilibrium point and explain the change.

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9 marksexplainstandardEdexcel

E32: Evidence for Business Objectives

Evidence measure with unit	2020 value	2024 value	Context or unit
revenue, cost and profit data	100.0	108.5	index or percentage as stated
a UK plc choosing between profit maximisation and revenue growth	baseline	changed	UK or global context
profit maximisation, revenue maximisation, satisficing and CSR influencing business decisions	lower impact	higher impact	directional evidence

E32C Explain how profit maximisation, revenue maximisation, satisficing and CSR influencing business decisions could affect economic agents in the UK economy or global economy.

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25 marksevaluatesynopticEdexcel

E32: Evidence for Business Objectives

Evidence measure with unit	2020 value	2024 value	Context or unit
revenue, cost and profit data	100.0	108.5	index or percentage as stated
a UK plc choosing between profit maximisation and revenue growth	baseline	changed	UK or global context
profit maximisation, revenue maximisation, satisficing and CSR influencing business decisions	lower impact	higher impact	directional evidence

E32D Evaluate the extent to which profit maximisation, revenue maximisation, satisficing and CSR influencing business decisions is likely to improve economic performance, using revenue, cost and profit data and your wider economic knowledge.

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6. Market Structures, Competition and Regulation

8. Macroeconomic Policy: Fiscal, Monetary and Supply-Side Choices

Key learning objectives

Understand the key principles behind Macroeconomic Objectives, AD/AS and National Income.
Apply these ideas to exam-style questions.
Recall the essential definitions and key terms.