Costs — Edexcel Past Paper Questions

A small hotel in Scarborough has seen its energy bills increase from £2 000 to £8 000 per month. Small businesses do not have the energy management teams of larger companies to negotiate better deals. (Source adapted from: https://www.ft.com/content/d07797e7-2eb7-4240-b15d-692b39510def) Evaluate the microeconomic effects of rising energy bills on the hotel industry or an industry of your choice.

One of two options in Section C — candidates answered this or the other.

3.3.2 Costs · 3.3.4 Profits and Losses

Discuss the likely impact of a rise in gas prices on a firm that uses a large amount of gas in its production process. Use a cost and revenue diagram to support your answer.

3.3.2 Costs

Using a cost and revenue diagram, discuss the likely impact of ‘rising costs’ for coffee shops on their profitability (Extract A, line 2).

3.3.2 Costs · 3.3.4 Profits and Losses

Explain the likely impact of diminishing marginal productivity of labour on cabin crew staffing levels. Refer to Extract A in your answer.

3.5.1 Demand for Labour · 3.3.2 Costs

Discuss the likely impact of investment in new technology on the profitability of firms in Germany, as described in Extract C line 20. Use a cost and revenue diagram to support your answer.

2.2.3 Investment · 3.3.2 Costs

Discuss factors that are causing many high street retailers in the UK to close some branches or shut down completely. Use a cost and revenue diagram to support your answer.

3.3.2 Costs · 3.3.4 Profits and Losses

Examine the likely effects on the profitability of Indonesian rice farmers of the government’s increased investment in dams (Extract E, lines 43-48). Use a cost and revenue diagram to support your answer.

3.3.2 Costs · 4.3.3 Development Strategies