Pearson Edexcel GCE In Economics B

Mark Scheme (Results) Summer 2024 Pearson Edexcel GCE In Economics B (9EB0) Paper 03: The Economic Environment and Business Edexcel and BTEC Qualifications Edexcel and BTEC qualifications are awarded by Pearson, the UK’s largest awarding body. We provide a wide range of qualifications including academic, vocational, occupational and specific programmes for employers. For further information visit our qualifications websites at or . Alternatively, you can get in touch with us using the details on our contact us page at Pearson: helping people progress, everywhere Pearson aspires to be the world’s leading learning company. Our aim is to help everyone progress in their lives through education. We believe in every kind of learning, for all kinds of people, wherever they are in the world. We’ve been involved in education for over 150 years, and by working across 70 countries, in 100 languages, we have built an international reputation for our commitment to high standards and raising achievement through innovation in education. Find out more about how we can help you and your students at: Summer 2024 Question Paper Log P75862A Publications Code 9EB0_03_2406_MS* All the material in this publication is copyright © Pearson Education Ltd 2024 General Marking Guidance • All candidates must receive the same treatment. Examiners must mark the first candidate in exactly the same way as they mark the last. • Mark schemes should be applied positively. Candidates must be rewarded for what they have shown they can do rather than penalised for omissions. • Examiners should mark according to the mark scheme not according to their perception of where the grade boundaries may lie. • There is no ceiling on achievement. All marks on the mark scheme should be used appropriately. • All the marks on the mark scheme are designed to be awarded. Examiners should always award full marks if deserved, i.e. if the answer matches the mark scheme. Examiners should also be prepared to award zero marks if the candidate’s response is not worthy of credit according to the mark scheme. • Where some judgement is required, mark schemes will provide the principles by which marks will be awarded and exemplification may be limited. • When examiners are in doubt regarding the application of the mark scheme to a candidate’s response, the team leader must be consulted. • Crossed out work should be marked UNLESS the candidate has replaced it with an alternative response. Question Number Using Extract A and an appropriate calculation, discuss the implications of September’s production figures for Tesla. Indicative content Mark 1(a) Knowledge/understanding 2, Application 2, Analysis 2, Evaluation 2 • September’s figure of 83,135 EVs is near the capacity of the factory which is 88,000 • Tesla’s capacity utilisation is therefore • 83,135 x 100 88,000 = 94.5% (94.47%) • For Tesla the nearer it gets to 100% capacity utilisation the more efficient the factory becomes as all resources are being used and average costs should reduce • Under-utilisation of 5.5% means that some resources such as machinery or employees are not being fully occupied • It can still increase production beyond the output for September • However, despite the recent upgrades Tesla does not have much spare capacity if sales rise and output has to increase • This might mean that bottlenecks or problems arise such as machinery not being maintained and breaking down • Staff absence could halt production if there is no- one else available to step in • If the trend continues, Tesla may have to upgrade the factory yet again, or ultimately, build another plant • Either way, the implications for Tesla are that it has to make plans for the future now, if it hasn’t already done so (8) Level Mark Descriptor 0 A completely inaccurate response. Level 1 1–2 Isolated elements of knowledge and understanding, using little or no relevant evidence. Arguments and chains of reasoning may be attempted. Limited attempt to address the question. Level 2 3–5 Elements of knowledge and understanding, using limited relevant evidence. Arguments and chains of reasoning are developed. Judgements may be attempted. Level 3 6–8 Accurate knowledge and understanding, supported throughout by use of relevant evidence which is well chosen. Arguments are developed, using logical, coherent chains of reasoning. A balanced awareness of competing arguments. Demonstrating application (AO2) in responses Where questions specifically stipulate the use of data or information provided in a stimulus, students: • must directly reference, interpret or analyse the information provided in the stimulus • in addition, may select examples from their own knowledge but these must be relevant and directly connected to the context/issues set out in the stimulus. Where questions do not specifically stipulate the use of data or information provided in a stimulus, students: • must select relevant examples from their own knowledge, these must be directly connected to the context/issues set out in the question, and • may directly reference, interpret or analyse the information provided in any relevant stimulus. Question Number Assess whether investment in the labour force is the best way for a firm to increase productivity. Indicative content Mark 1 (b) Knowledge/Understanding 2, Application 2, Analysis 3, Evaluation 3 • Increasing productivity will lead to greater output per unit in a given time • This will lower average costs and give firms a competitive advantage • By investing $1bn in the wellbeing of its workforce Starbucks believes that it will result in ‘long term growth’ • Higher wages and improved benefits may attract more motivated employees • Employees who are more contented will reduce employee turnover • In turn this will reduce the cost of recruiting and training employees thus lowering costs and increasing competitiveness • Better training may increase efficiency and give consumers a better experience • For a consumer-oriented business such as Starbucks it makes sense to focus on their workforce in order to increase productivity and enhance their competitiveness • However, not all firms rely on their labour force to such a great extent, some are capital intensive such as Tesla • They have a greater reliance on machines and physical equipment • In order to be competitive and grow they have to take advantage of the latest advances in technology • It may be more beneficial to invest in capital equipment rather than labour, particularly if production is fully automated and the labour force is small • Many businesses will need to find a balance between investing in labour or capital depending on their needs and the nature of their business (10) Level Mark Descriptor 0 A completely inaccurate response. Level 1 1–2 Isolated elements of knowledge and understanding, using little or no relevant evidence. Arguments and chains of reasoning may be attempted. Limited attempt to address the question. Level 2 3–4 Elements of knowledge and understanding, using limited relevant evidence. Arguments and chains of reasoning are presented but with limited attempt to address the question. Comparisons and judgements may be attempted. Level 3 5-7 Accurate knowledge and understanding, supported by use of relevant evidence to support the argument, clear chains of reasoning, with well-developed arguments. An awareness of the significance of competing arguments is present although this may lack balance. Level 4 8-10 Accurate knowledge and understanding, supported throughout by use of relevant evidence which is well chosen, logical, coherent chains of reasoning, showing full understanding of the question. Arguments are developed and evaluated. A full and balanced awareness of the validity and significance of competing arguments. Demonstrating application (AO2) in responses Where questions specifically stipulate the use of data or information provided in a stimulus, students: • must directly reference, interpret or analyse the information provided in the stimulus • in addition, may select examples from their own knowledge but these must be relevant and directly connected to the context/issues set out in the stimulus. Where questions do not specifically stipulate the use of data or information provided in a stimulus, students: • must select relevant examples from their own knowledge, these must be directly connected to the context/issues set out in the question, and • may directly reference, interpret or analyse the information provided in any relevant stimulus. Question Number Assess whether a firm should expand during a recession. Indicative content Mark 1(c) Knowledge/understanding 2, Application 2, Analysis 4, Evaluation 4 • A recession is when an economy experiences prolonged negative economic growth (in the UK it is defined as two consecutive quarters) • During this time aggregate demand (AD) is likely to fall and unemployment to rise • Many firms will face falling demand for their output such as travel firms and business confidence will fall • In the short run, production may be cut to reduce the cost of holding inventory • Demand for inputs fall and those firms that supply them will also face falling demand • Employees may have reduced working hours and even be laid off causing less consumption and so AD falls and the cycle repeats • However, not all firms will face falling demand, those that produce income inelastic goods such as Apple and services may not be badly affected • Firms that produce inferior goods such as budget supermarkets may well see an increase in demand and increase production, perhaps even expanding their facilities • Recessions do not last forever; some firms may decide it is a good time to expand in order to be prepared for the economic recovery that will follow • During a recession, resources are more readily available, prices of land, machinery and raw materials are likely to be lower • Labour will be more plentiful with no upward pressure on wages • Therefore, the costs of investment for expansion are cheaper than at other times during the economic cycle • For those firms that can take advantage, it may be a good time to expand • Much will depend on the nature of the firm, its products/services and its financial position (12)