Edexcel A-level Economics Theme 3
Questions With Complete Solutions
Backwards vertical integration - Correct Answers ✅a
joining together into one firm of two or more firms where the
purchaser merges with/takes over one or more of its suppliers
Conglomerate integration - Correct Answers ✅a joining
together into one firm of two or more firms producing
unrelated products
Demerger - Correct Answers ✅when a firm splits into two
or more independent businesses
Divorce of ownership from control - Correct Answers
✅when managers and directors of a business are different
from the owners of a business (the shareholders)
Forward vertical integration - Correct Answers ✅a joining
together into one firm of two or more firms where the
supplier merges with/takes over one or more of its buyers
Horizontal integration - Correct Answers ✅a joining
together of two firms in the same industry at the same stage
of production
Niche market - Correct Answers ✅a small segment of a
larger market
,Edexcel A-level Economics Theme 3
Questions With Complete Solutions
Merger/integration - Correct Answers ✅the joining together
of two or more firms under common ownership
Not-for-profit organisations - Correct Answers
✅organisations that do not aim to make a profit; rather, they
use any profit or surplus they generate to support their aims
(eg. a charity)
Organic or internal growth - Correct Answers ✅a firm
increasing its size through investment in capital
equipment/an increased labour force
Private sector organisations - Correct Answers
✅organisations owned by individuals or companies rather
than the state
Public sector organisations - Correct Answers
✅organisations owned and controlled by the state
Synergy - Correct Answers ✅when two or more
activities/firms put together can lead to greater outcomes
than the sum of the individual parts
Vertical integration - Correct Answers ✅a joining together
into one firm of two or more firms in the same industry at
different stages of production
, Edexcel A-level Economics Theme 3
Questions With Complete Solutions
Average revenue - Correct Answers ✅the average receipts
per unit sold // TR÷Q
Marginal revenue - Correct Answers ✅the addition to total
revenue of an extra unit sold // ΔTR÷ΔQ
Total revenue - Correct Answers ✅the total amount of
money received from the sale of any given quantity of
output // AR*Q
Average product - Correct Answers ✅the quantity of output
per unit of factor input // total product÷level of output
Law of diminishing marginal returns - Correct Answers ✅if
increasing quantities of a variable input are combined with a
fixed input, eventually the marginal product and then the
average product of that variable input will decline.
Long run - Correct Answers ✅the period of time when all
factors of production can vary, as does the number of firms in
the market, but the level of technology remains constant
Marginal product - Correct Answers ✅the addition to
output produced by an extra unit of input // Δtotal
output÷Δlevel of inputs
Questions With Complete Solutions
Backwards vertical integration - Correct Answers ✅a
joining together into one firm of two or more firms where the
purchaser merges with/takes over one or more of its suppliers
Conglomerate integration - Correct Answers ✅a joining
together into one firm of two or more firms producing
unrelated products
Demerger - Correct Answers ✅when a firm splits into two
or more independent businesses
Divorce of ownership from control - Correct Answers
✅when managers and directors of a business are different
from the owners of a business (the shareholders)
Forward vertical integration - Correct Answers ✅a joining
together into one firm of two or more firms where the
supplier merges with/takes over one or more of its buyers
Horizontal integration - Correct Answers ✅a joining
together of two firms in the same industry at the same stage
of production
Niche market - Correct Answers ✅a small segment of a
larger market
,Edexcel A-level Economics Theme 3
Questions With Complete Solutions
Merger/integration - Correct Answers ✅the joining together
of two or more firms under common ownership
Not-for-profit organisations - Correct Answers
✅organisations that do not aim to make a profit; rather, they
use any profit or surplus they generate to support their aims
(eg. a charity)
Organic or internal growth - Correct Answers ✅a firm
increasing its size through investment in capital
equipment/an increased labour force
Private sector organisations - Correct Answers
✅organisations owned by individuals or companies rather
than the state
Public sector organisations - Correct Answers
✅organisations owned and controlled by the state
Synergy - Correct Answers ✅when two or more
activities/firms put together can lead to greater outcomes
than the sum of the individual parts
Vertical integration - Correct Answers ✅a joining together
into one firm of two or more firms in the same industry at
different stages of production
, Edexcel A-level Economics Theme 3
Questions With Complete Solutions
Average revenue - Correct Answers ✅the average receipts
per unit sold // TR÷Q
Marginal revenue - Correct Answers ✅the addition to total
revenue of an extra unit sold // ΔTR÷ΔQ
Total revenue - Correct Answers ✅the total amount of
money received from the sale of any given quantity of
output // AR*Q
Average product - Correct Answers ✅the quantity of output
per unit of factor input // total product÷level of output
Law of diminishing marginal returns - Correct Answers ✅if
increasing quantities of a variable input are combined with a
fixed input, eventually the marginal product and then the
average product of that variable input will decline.
Long run - Correct Answers ✅the period of time when all
factors of production can vary, as does the number of firms in
the market, but the level of technology remains constant
Marginal product - Correct Answers ✅the addition to
output produced by an extra unit of input // Δtotal
output÷Δlevel of inputs
