Economics (AS & A Level) · May / June 2025 · Paper 33 · Question 12

The diagram shows the impact on the labour market of the introduction of a national minimum wage (MW). [diagram: labour market with wage rate on vertical axis, labour on horizontal axis, supply and demand curves, horizontal MW line with points X, Y, Z] What do the distances XY and YZ represent?

1. AXY: increase in employed workers; YZ: existing workers made redundant
2. BXY: existing workers made redundant; YZ: unemployed new entrants
3. CXY: existing workers made redundant; YZ: increase in employed workers
4. DXY: unemployed new entrants; YZ: existing workers made redundant

As printed in the paper