CIE A Level Topical Past Paper 2
8.3 Labour market forces and government intervention
9708/42/F/M/24
The introduction of a trade union into a perfectly competitive labour market will always lead to higher wage levels and a higher level of unemployment.
With the help of a diagram, evaluate this statement. [20]
9708/43/O/N/22
a)Discuss the effectiveness of government policies which increase the net advantage of labour on the long–term supply of labour in an economy. [12]
b) Compare the impact of an increase in labour productivity on a firm in a monopsony labour market with an increase in labour productivity on a firm operating in a perfectly competitive labour market. [13]
9708/42/O/N/22
Discuss the extent to which the marginal revenue product theory can be used to explain the determination of wages. [25]
9708/41/O/N/22
a) Explain what is meant by the marginal revenue product theory and consider the relationship between this theory and a trades union’s ability to gain higher wages for its members. [12]
b) Distinguish between economic rent and transfer earnings and, with the help of diagrams, discuss why famous sports people receive much higher pay than street cleaners. [13]
9708/42/M/J/22
The best outcome for labour markets is that the forces of supply and demand are left to determine wages without government interference.
Discuss with the use of diagrams, whether this statement is always true. [25]
9708/41/O/N/21
a) Explain the factors which determine the elasticity of demand for labour and discuss the importance of the elasticity of demand for labour in relation to the effectiveness of a government’s minimum wage policy. [12]
b) ‘Monopsonist employers cause labour market failure while trade unions can solve this labour market failure.’ To what extent do you agree that this view is accurate? [13]
9708/41/M/J/21
‘Wage differentials can be explained by economic theory. They are a sign of the power of a firm to exploit its workforce and are unjust.’ Do you agree with this view? [25]
9708/42/M/J/21
Evaluate whether the theory of wage determination can account for wage differentials
(i) between a director and a general worker in the same company and
(ii) between two workers doing the same job in different companies. [25]
9708/42/F/M/21
a) Distinguish between transfer earnings and economic rent. With the help of diagrams, consider the links between transfer earnings, economic rent, the elasticity of supply of labour and an individual worker’s wage rate. [12]
b) ‘Trade unions can gain an increase in wage levels only at the expense of higher levels of unemployment.’ To what extent do you agree with this statement? [13]