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Economics IGCSEPDF 65
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●
●
Explain
reasons why the demand for labour in an industry might increase.
Analyse the role of non-wage factors in influencing a worker's choice of occupation.
Discuss the impact of a strong trade union on a country’s economy, considering the viewpoints
of workers, firms, and the government.
K:
A:
○
○
Demand for labour is derived from the demand for the final good or service.
If consumer demand for the firm's product increases, the firm needs to
produce more.
○
This requires the firm to hire more workers, shifting the demand for labour
curve to the right.
○
○
Labour productivity is output per worker hour.
If productivity rises (e.g., due to new technology or training), labour becomes
more effective at generating revenue.
○
Firms will be encouraged to hire more of this more productive labour, shifting
the demand for labour curve to the right.
● K: Non-wage factors are the non-financial benefits of a job, such as job satisfaction, job
security, and working environment.
● A: Workers aim to maximise the net advantages of an occupation, which is the total of
wage and non-wage factors.
● An: Jobs with high non-wage factors (e.g., high satisfaction, flexible hours) can afford
to pay a lower wage and still attract sufficient workers, as the overall net advantage is
high.
● An: Conversely, jobs with poor non-wage factors (e.g., dangerous, low security) must
offer a higher wage (a compensating differential) to attract labour and offset the poor
conditions, thereby influencing worker choice.
two
Reason 1: Increased Demand for Product
A:
Reason 2: Increase in Labour Productivity
K:
A:
A:
Question 2 (6 Marks)
Question 3 (8 Marks)
Q1: Reasons for Increased Labour Demand (4 Marks)
Q2: Role of Non-Wage Factors in Choice of Occupation (6 Marks)
Solved Answers (Note Form)