CourseCourseConceptConceptDocsDocuments

IB Economics HL 2.4.3 Hl Business Objectives Questions

Practise IB Economics HL 2.4.3 by comparing profit maximization with satisficing, growth, revenue and social objectives.

Syllabus
First assessment 2022
Course
Economics HL
Level
HL

Exam points

  • identify profit maximization and alternative business objectives including satisficing, revenue maximization, growth, market share and corporate social responsibility
  • explain why profit is maximized where marginal revenue equals marginal cost and why firms may choose alternative objectives in different short-run or long-run contexts
  • analyse and evaluate the assumption that firms always maximize profit using real-world evidence, comparing objectives, constraints, ownership priorities and stakeholder trade-offs

Learn this topic

Study 2.4.3 (HL)—Business objectives conceptsOpen the corresponding Concept lesson for explanations, examples and exam connections.

IB Economics HL 2.4.3 Hl Business Objectives Questions question 1

[Maximum number: 4]

A report into fitness levels in the United States of America (USA) says that only about 23 % of all USA adults get the recommended amount of exercise. Walking, cycling, swimming, playing sports or doing domestic jobs such as gardening can all contribute to personal fitness. The following information is a cause for concern:
- Only one in three children are physically active every day.
- Less than 5 % of adults participate in 30 minutes of physical activity each day.
- Children now spend more than seven hours per day in front of a screen (for example, televisions, video game devices, computers).

At the same time, there has been a significant increase in demand for memberships at gyms (fitness centres), causing the fitness industry to grow by 8.7 % in the past few years.

Despite the increase in gym memberships, there is still concern about the lack of exercise in the USA. This is particularly important, as physical inactivity is estimated to result in USD 130 billion in annual healthcare spending and causes a significant reduction in the productivity of labour.

Figure 1 illustrates the market for gym memberships in the USA. D represents the demand for and S represents the supply of gym memberships. D1D_{1} represents the increased demand for gym memberships in recent years.

Figure 1

Figure 1

Explain two alternative business objectives (other than profit maximization) which the owner might adopt.

All question bank results loaded