Edexcel Economics and Business Unit 1 developing new business ideas may 19 2016

Thought it was ok, but question 3 on surveymonkey was a bit strange I thought

I put opportunity cost but it could have been trade off

Im fairly sure it would be trade off as you are not choosing between losing one alternative completely, you are reducing one in order to maximise the benefits of both thus it would be trade off, what did people get for the question relating to decreased unemployment, Sales rev or vol?

I got trade off too, same reason! and sales volume, you?

We differ here, i got sales revenue.. Of course i understand sales volume would increase, however surely the result of that would be that revenues increase as falling unemployment would mean higher disposable incomes thus leading prices for goods not changing or even rising as demand is higher, considering revenue = sales vol times sales price surely revenue would increase but i can't deny i have a considerable amount of doubt in my mind now.

I put sales volume over revenue as I felt there was no guarantee that prices hadn't changed therefore it seemed to make sense! again, both seem to make sense to me although I just went for what I felt was the most likely! Also I'm slightly bugging out about the first question, I can't remember whether it asked for the operating profit or operating profit margin?

Operating profit Margin - i got the answer as 50%

yes the volume/revenue question was a bit annoying.

Oh good we agree on that one then haha, as soon as I left the exam someone told me that they just asked for the operating profit so I was worried about that one, I'm glad to have some clarification there! what about the non-price related impacts on supply? I wasn't really sure for this one so went safe with motivation of workforce and communication issues across the different factories and the head office!

For the Supply question I went with "better technology" and "increased taxation" as both are determinants of supply.

But isn't tax a price factor, the question asked for non-price supply factors so I went for "Improved Technology" and "External Shocks e.g. weather"

No its not a price factor, as tax shits the supply curve, if it were a price factor the quantity would move up or down the curve.

Surely the imposition of tax would make it more expensive meaning it would increase the cost of supply.

Operating profit margin, answer was 50

The reason it is a non price factor is that when a tax is imposed it does not mean the company has to increase the price of its product, for example introducing higher corporation tax, this has no direct affect on the price of a product or the cost of producing it. However, it does make it less attractive for the consumer to produce more.