EDEXCEL- [9-1]

O-LEVEL ECONOMICS

PAPER-1
WORKSHEET-4 CW
BATCH-JAN/MAY-20

THE LABOUR MARKET

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1 What is usually a function of a trade union?

A to determine the amount of dividend paid

B to negotiate wage levels with employers
C to recommend redundancies
D to take responsibility for organising sales of companies’ products

2 Why is a surgeon likely to have a higher wage rate than a hospital porter?

A The surgeon has been in the job a longer time.

B The surgeon has a longer training period.
C The surgeon is older.
D The surgeon is in a trade union.

3 Which trade union action is most likely to have harmful effects on the productivity of a firm?

A acceptance of new technology

B agreement to a bonus system
C opposition to planned redundancies
D participation in a profit-sharing scheme

4 In a country, male workers on average earn more than female workers, although male and female
workers receive equal pay for equal work. What could explain this?

A Female workers are more experienced.

B Female workers are more likely to achieve promotion.
C Male workers are more likely to be in trade unions.
D Male workers have fewer qualifications.

5 What is the most likely reason for a firm to offer higher wages to recruit more staff?

A falling incomes
B falling output
C falling prices
D falling unemployment

6 Why might factory workers have higher wage rates than agricultural workers?

A Factory workers are in greater supply.

B Factory workers face fewer risks of accidents.
C Factory workers have cleaner working conditions.
D Factory workers use more productive equipment

7 A trade union negotiates a basic weekly wage for its members with all employers in an industry.
In addition to the basic wage, one company also operates a production bonus at factory level. What is
the aim of this company?

A to give equal wages to all workers

B to increase the efficiency of the workers
C to introduce a minimum wage
D to reduce its total wage bill

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8 Which of the following is most likely to limit wage increases in an industry?

A an increased demand for the industry’s product

B a rise in the industry’s profits
C a rise in wages for workers in similar jobs
D the replacement of workers with robots

9 Why are unskilled workers paid less than skilled workers?

A There is a higher demand for unskilled labour than skilled labour.

B There is a larger supply of unskilled labour than skilled labour.
C Unskilled labour belong to trade unions.
D Unskilled labour is more productive than skilled labour.

10 A trade union and employers agree a minimum wage (W1) which is above the market equilibrium
wage (W) for that industry.

What is the effect of paying the minimum wage (W1)?

A demand for workers will exceed the supply

B fewer workers will be employed
C some workers will continue to be paid at wage W
D workers will be less willing to work for the minimum wage

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11a Draw a minimum wage diagram showing a trade union and employers agree a minimum wage
(W1) which is above the market equilibrium. It must show an introduction of MWR. (3)

b) Draw a minimum wage showing an increase in MWR. (3)

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c) Availability of substitutes of labour has increased in recent days in the RMG industry. Show this
change in diagram below. Show the appropriate shifting. (3)

d) Migration of labour has increased in recent days in Canada. Show this change in diagram below.
Show the appropriate shifting. (3)

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12 An increase in the minimum wage rate will benefit only a small number of people in a country. Do
you agree with this statement? Analyse your answer. (6)

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13 Secondary sector focuses on the production of manufactured goods and primary sector focuses on
agricultural goods. Productivity is the output per input. It is often argued that the productivity of labour
in the secondary sector can be increases by the usage on modern technology, lean management,
giving financial incentive sand using better machineries etc. On the other hand, productivity of primary
sector worker can also be increased by using better fertilizer, proper drainage system.

b) It is easier for firms in the secondary sector to increase productivity of labour than firms in the
primary sector. Do you agree with the statement? Analyses your answer. (6)

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14 The supply of labour is the main reason why wages in the agricultural sector are always less than
those in the tertiary sector. Assess your answer. (9)

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15 Labor productivity measures the hourly output of a country's economy. Growth in labor productivity
depends on three main factors, investment and saving in physical capital, new technology and human
capital. Firms use some combination of labor and capital to produce output. In particular, the labor
utilizes the capital in the production process. For example, when making cars, workers use tools and an
assembly line to produce a finished product. The workers are the labor and the machines are the
capital. In order to increase productivity, each worker must be able to produce more output. This is
referred to as labor productivity growth. The only way for this to occur is through an in increase in the
capital utilized in the production process. This increase can be in the form of either human capital or
physical capital.

In a manufacturing firm, an increase in the productivity of labour can only be achieved by increasing
the amount of capital used in the production process. Do you agree with this statement? Evaluate your
answer. (12)

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16 State two factor affecting the demand for labour. (2)

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17 State two factor affecting the supply for labour. (2)

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18 What is meant by the term “Minimum wage rate’ (2)

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Total marks for this paper = 60 Marks

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