Labour market forces and government intervention
8.3What the syllabus asks of you
- demand for labour as a derived demand
- factors affecting demand for labour in a firm or an occupation
- causes of shifts in and movement along the demand curve for labour in a firm or an occupation
- marginal revenue product (MRP) theory: definition and calculation of marginal revenue product
- marginal revenue product (MRP) theory: derivation of an individual firm’s demand for labour using marginal revenue product
- factors affecting the supply of labour to a firm or to an occupation: wage and non-wage factors
- causes of shifts in and movement along the supply curve of labour to a firm or an occupation
- wage determination in perfect markets: equilibrium wage rate and employment in a labour market
- wage determination in imperfect markets: influence of trade unions on wage determination and employment in a labour market
- wage determination in imperfect markets: influence of government on wage determination and employment in a labour market using a national minimum wage
- wage determination in imperfect markets: influence of monopsony employers on wage determination and employment in a labour market
- determination of wage differentials by labour market forces
- transfer earnings and economic rent: definition of transfer earnings
- transfer earnings and economic rent: definition of economic rent
- transfer earnings and economic rent: factors affecting transfer earnings and economic rent in an occupation
Drill this topic
Every question on Labour market forces and government intervention, untimed, marked as you go.
Make a worksheet
Choose the years and how many questions, then print it with the answers on separate pages.
83 questions
1May / June 2026 · Paper 31 · Q9Show mark scheme →
Aa movement down the marginal revenue product curve
Ba shift towards the horizontal axis of the marginal cost curve
Ca shift towards the origin of the marginal revenue product curve
Da shift towards the vertical axis of the average cost curve
Mark scheme
2May / June 2026 · Paper 31 · Q10Show mark scheme →
Adecrease in trade union membership
Bhigher wage rates offered
Cincreased economic rent
Dless labour employed
Mark scheme
3May / June 2026 · Paper 32 · Q8Show mark scheme →
AThe amount paid above the lowest wage that is needed to keep a worker in employment.
BThe difference in pay between workers with comparable skills in different industries.
CThe difference in pay between workers with different skills.
DThe lowest wage that is needed to keep a worker in employment.
Mark scheme
4May / June 2026 · Paper 32 · Q12Show mark scheme →
Aif labour costs are a major proportion of total costs
Bif the demand for the labour employed is elastic
Cif the demand for the good produced is elastic
Dif the demand for the good produced is increasing
Mark scheme
5May / June 2026 · Paper 33 · Q9Show mark scheme →
Aa movement down the marginal revenue product curve
Ba shift towards the horizontal axis of the marginal cost curve
Ca shift towards the origin of the marginal revenue product curve
Da shift towards the vertical axis of the average cost curve
Mark scheme
6May / June 2026 · Paper 33 · Q10Show mark scheme →
Adecrease in trade union membership
Bhigher wage rates offered
Cincreased economic rent
Dless labour employed
Mark scheme
7May / June 2026 · Paper 34 · Q11Show mark scheme →
AT + V + X
BV + U
CV + X
DX + Y + Z
Mark scheme
8May / June 2026 · Paper 34 · Q12Show mark scheme →
Aa decrease in the demand for farm products
Ba decrease in the number of farm workers retiring
Can increase in the immigration of farm workers
Dan increase in the price of farm products
Mark scheme
9May / June 2026 · Paper 34 · Q13Show mark scheme →
Aequilibrium wage rate before NMW 8, wage elasticity of demand for labour >1, wage elasticity of supply of labour >1
Bequilibrium wage rate before NMW 8, wage elasticity of demand for labour <1, wage elasticity of supply of labour <1
Cequilibrium wage rate before NMW 9, wage elasticity of demand for labour >1, wage elasticity of supply of labour >1
Dequilibrium wage rate before NMW 10, wage elasticity of demand for labour >1, wage elasticity of supply of labour >1
Mark scheme
10Oct / Nov 2025 · Paper 31 · Q12Show mark scheme →
AIt falls from RST to UVT.
BIt falls from RSVU to UVT.
CIt rises from UVT to RST.
DIt rises from UVT to RSVU.
Mark scheme
11Oct / Nov 2025 · Paper 33 · Q9Show mark scheme →
Ashift of demand curve for labour: none; shift of supply curve for labour: inward; effect on wage rate: increase
Bshift of demand curve for labour: none; shift of supply curve for labour: outward; effect on wage rate: decrease
Cshift of demand curve for labour: inward; shift of supply curve for labour: none; effect on wage rate: increase
Dshift of demand curve for labour: outward; shift of supply curve for labour: none; effect on wage rate: increase
Mark scheme
12Oct / Nov 2025 · Paper 34 · Q10Show mark scheme →
Amale wages decrease; female wages decrease
Bmale wages decrease; female wages increase
Cmale wages increase; female wages decrease
Dmale wages increase; female wages increase
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13Oct / Nov 2025 · Paper 34 · Q12Show mark scheme →
Ajob security
Bthe hourly wage rate
Cthe productivity of farm workers
Dthe qualifications required
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14Oct / Nov 2025 · Paper 34 · Q14Show mark scheme →
AL is paid only economic rent.
BL is paid an element of economic rent and transfer earnings.
CL is paid below transfer earnings and leaves the industry.
DL is paid exactly transfer earnings and remains in work.
Mark scheme
15May / June 2025 · Paper 31 · Q12Show mark scheme →
AXY: increase in employed workers; YZ: existing workers made redundant
BXY: existing workers made redundant; YZ: unemployed new entrants
CXY: existing workers made redundant; YZ: increase in employed workers
DXY: unemployed new entrants; YZ: existing workers made redundant
Mark scheme
16May / June 2025 · Paper 31 · Q14Show mark scheme →
A1 and 3
B1 and 4
C2 and 3
D2 and 4
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17May / June 2025 · Paper 32 · Q12Show mark scheme →
Aeconomic rent
Btransfer earnings
Cunemployment
Dwages
Mark scheme
18May / June 2025 · Paper 32 · Q13Show mark scheme →
Aemigration rates
Blabour participation rate
Clabour productivity
Dunemployment benefits
Mark scheme
19May / June 2025 · Paper 32 · Q14Show mark scheme →
A1 and 3
B1 and 4
C2 and 3
D2 and 4
Mark scheme
20May / June 2025 · Paper 33 · Q12Show mark scheme →
AXY: increase in employed workers; YZ: existing workers made redundant
BXY: existing workers made redundant; YZ: unemployed new entrants
CXY: existing workers made redundant; YZ: increase in employed workers
DXY: unemployed new entrants; YZ: existing workers made redundant
Mark scheme
21May / June 2025 · Paper 33 · Q14Show mark scheme →
A1 and 3
B1 and 4
C2 and 3
D2 and 4
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22May / June 2025 · Paper 34 · Q11Show mark scheme →
Athe average revenue product curve
Bthe marginal revenue product curve
Cthe mobility of labour
Dthe wage rate in other industries
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23May / June 2025 · Paper 34 · Q12Show mark scheme →
AThe economy is experiencing a fall in the price of capital.
BThe economy is experiencing rising employment.
CThe price elasticity of demand for the industry's goods is equal to 1.
DThe price elasticity of demand for the industry's goods is greater than 1.
Mark scheme
24Feb / March 2025 · Paper 32 · Q13Show mark scheme →
Amarginal physical product × marginal revenue
Bmarginal physical product ÷ price
Ctotal physical product × marginal cost
Dtotal physical product ÷ marginal cost
Mark scheme
25Feb / March 2025 · Paper 32 · Q14Show mark scheme →
AHer economic rent as a teacher is $5000.
BHer economic rent as an accountant is $10000.
CHer transfer earnings as a teacher are $30000.
DHer transfer earnings as an accountant are $15000.
Mark scheme
26Oct / Nov 2024 · Paper 31 · Q13Show mark scheme →
Aa decrease in the supply of labour
Ba decrease in the interest rate
Can increase in productivity
Dan increase in the size of the labour force
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27Oct / Nov 2024 · Paper 31 · Q15Show mark scheme →
AIt falls from L3 to L2.
BIt increases from L1 to L2.
CIt increases from L2 to L3.
DIt remains the same at L1.
Mark scheme
28Oct / Nov 2024 · Paper 32 · Q12Show mark scheme →
AFirms face intense competition both at home and abroad.
BLabour costs are a high proportion of the total cost of the firm.
CThe minimum wage is not high enough to lower the profits of the firms.
DThe minimum wage introduced in monopsony is less than the marginal revenue productivity (MRP) of the last worker employed.
Mark scheme
29Oct / Nov 2024 · Paper 32 · Q13Show mark scheme →
Aa fall in the wage rate
Ba fall in the price of the final product
Ca rise in the wage rate
Da rise in the price of the final product
Mark scheme
30Oct / Nov 2024 · Paper 32 · Q14Show mark scheme →
A1
B2
C3
D4
Mark scheme
31Oct / Nov 2024 · Paper 33 · Q12Show mark scheme →
Afall from L1 to L2
Bfall from L3 to L2
Crise from L1 to L3
Drise from L2 to L3
Mark scheme
32Oct / Nov 2024 · Paper 33 · Q13Show mark scheme →
Aa shift to the left in the demand curve for labour
Ba shift to the right in the demand curve for labour
Ca shift to the left in the supply curve of labour
Da shift to the right in the supply curve of labour
Mark scheme
33Oct / Nov 2024 · Paper 33 · Q14Show mark scheme →
Atransfer earnings: fall; economic rent: falls
Btransfer earnings: fall; economic rent: rises
Ctransfer earnings: rise; economic rent: rises
Dtransfer earnings: rise; economic rent: falls
Mark scheme
34May / June 2024 · Paper 31 · Q14Show mark scheme →
Aa decrease in the top rate of income tax
Ban increase in the demand for the final product
Can increase in subsidies to firms
Dan increase in the size of the working population
Mark scheme
35May / June 2024 · Paper 31 · Q15Show mark scheme →
AIt falls from OQ_2 to OQ_1.
BIt falls from OQ_2 to OQ_3.
CIt rises from OQ_1 to OQ_3.
DIt rises from OQ_1 to OQ_4.
Mark scheme
36May / June 2024 · Paper 32 · Q13Show mark scheme →
Aa reduction in working hours available
Ba shift in the country’s economy to the service sector
Ca subsidised lunch is made available
Dan increase in the number of jobs available
Mark scheme
37May / June 2024 · Paper 32 · Q14Show mark scheme →
Awhen the average revenue product of labour equals the average cost of hiring workers
Bwhen the marginal revenue product of labour equals the average cost of hiring workers
Cwhen the marginal revenue product of labour equals the marginal cost of hiring workers
Dwhen the marginal revenue product of labour equals the trade union supplied cost of workers
Mark scheme
38May / June 2024 · Paper 32 · Q15Show mark scheme →
Aeconomic rent GFK; transfer earnings GHOJ
Beconomic rent GHOJ; transfer earnings GJK
Ceconomic rent GJK; transfer earnings GJF
Deconomic rent GJK; transfer earnings GHOJ
Mark scheme
39May / June 2024 · Paper 33 · Q14Show mark scheme →
Aa decrease in the top rate of income tax
Ban increase in the demand for the final product
Can increase in subsidies to firms
Dan increase in the size of the working population
Mark scheme
40May / June 2024 · Paper 33 · Q15Show mark scheme →
AIt falls from OQ_2 to OQ_1.
BIt falls from OQ_2 to OQ_3.
CIt rises from OQ_1 to OQ_3.
DIt rises from OQ_1 to OQ_4.
Mark scheme
41Feb / March 2024 · Paper 32 · Q14Show mark scheme →
Aa decrease in the price of petrol vehicles
Ba decrease in the productivity of electric vehicles workers
Can increase in the price of electric vehicles
Dan increase in the wage rate of electric vehicles workers
Mark scheme
42Feb / March 2024 · Paper 32 · Q15Show mark scheme →
AON1
BON2
CON3
DON4
Mark scheme
43Oct / Nov 2023 · Paper 31 · Q12Show mark scheme →
AX
BY
CX + Y
DX + Y + Z
Mark scheme
44Oct / Nov 2023 · Paper 31 · Q13Show mark scheme →
Aa decrease in the number of workers it employs
Ba decrease in the productivity of its workforce
Can increase in the geographical mobility of its labour
Da shift of the supply curve for its labour to the right
Mark scheme
45Oct / Nov 2023 · Paper 32 · Q10Show mark scheme →
Aemployment will decrease | employment will decrease
Bemployment will decrease | employment will increase
Cemployment will increase | employment will decrease
Demployment will increase | employment will increase
Mark scheme
46Oct / Nov 2023 · Paper 32 · Q11Show mark scheme →
Adecreases as the demand for labour rises.
Bincreases as the demand for labour rises.
Cdecreases as wages rise.
Dincreases as wages rise.
Mark scheme
47Oct / Nov 2023 · Paper 33 · Q11Show mark scheme →
AX
BX + Y
CY
DY + Z
Mark scheme
48Oct / Nov 2023 · Paper 33 · Q12Show mark scheme →
Abetter education: no; tax allowances for capital goods: no
Bbetter education: no; tax allowances for capital goods: yes
Cbetter education: yes; tax allowances for capital goods: no
Dbetter education: yes; tax allowances for capital goods: yes
Mark scheme
49May / June 2023 · Paper 31 · Q14Show mark scheme →
AW1W3
BW1W2
CW2W3
DW2W4
Mark scheme
50May / June 2023 · Paper 31 · Q15Show mark scheme →
Aby multiplying the average physical product by the average revenue
Bby multiplying the average physical product by the marginal revenue
Cby multiplying the marginal physical product by the marginal cost
Dby multiplying the marginal physical product by the marginal revenue
Mark scheme
51May / June 2023 · Paper 32 · Q13Show mark scheme →
Aa decrease in the marginal productivity of labour
Ba decrease in the wage rate
Can increase in the marginal productivity of labour
Dan increase in the wage rate
Mark scheme
52May / June 2023 · Paper 33 · Q14Show mark scheme →
AW1W3
BW1W2
CW2W3
DW2W4
Mark scheme
53May / June 2023 · Paper 33 · Q15Show mark scheme →
Aby multiplying the average physical product by the average revenue
Bby multiplying the average physical product by the marginal revenue
Cby multiplying the marginal physical product by the marginal cost
Dby multiplying the marginal physical product by the marginal revenue
Mark scheme
54Feb / March 2023 · Paper 32 · Q11Show mark scheme →
Aa decrease equal to XY
Ba decrease equal to XZ
Can increase equal to XY
Dan increase equal to YZ
Mark scheme
55Feb / March 2023 · Paper 32 · Q12Show mark scheme →
AMarket X has a higher marginal revenue product per worker than Y.
BMarket X has a higher percentage of its labour belonging to a trade union than Y.
CMarket X has higher labour costs as a percentage of total costs than X.
DMarket X has more specific skills and training requirements than Y.
Mark scheme
56Feb / March 2023 · Paper 32 · Q13Show mark scheme →
AThose employed in occupation Y attach greater importance to job security.
BThose employed in occupation X attach less importance to leisure activities.
CThere will be more competition for places on training courses to enter occupation X than occupation Y.
DOccupation Y has more non-pecuniary advantages than occupation X.
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57Oct / Nov 2022 · Paper 31 · Q16Show mark scheme →
Astrengthen trade union powers, relax immigration controls, cut national minimum wage
Bstrengthen trade union powers, strengthen immigration controls, raise national minimum wage
Cweaken trade union powers, relax immigration controls, cut national minimum wage
Dweaken trade union powers, strengthen immigration controls, raise national minimum wage
Mark scheme
58Oct / Nov 2022 · Paper 31 · Q17Show mark scheme →
Afall; fall
Bfall; rise
Crise; fall
Drise; rise
Mark scheme
59Oct / Nov 2022 · Paper 32 · Q16Show mark scheme →
Awage O hours worked A S
Bwage O hours worked B S
Cwage O hours worked C S
Dwage O hours worked D S
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60Oct / Nov 2022 · Paper 32 · Q17Show mark scheme →
AIt represents a large proportion of the workforce in the company.
BIt represents a workforce that has an elastic demand for its labour.
CIt represents a workforce that is increasing its labour productivity.
DIt represents a workforce that works for a highly profitable monopoly firm.
Mark scheme
61Oct / Nov 2022 · Paper 33 · Q16Show mark scheme →
Atransfer earnings zero; economic rent 400 000
Btransfer earnings 100 000; economic rent 400 000
Ctransfer earnings 400 000; economic rent zero
Dtransfer earnings 400 000; economic rent 100 000
Mark scheme
62Oct / Nov 2022 · Paper 33 · Q17Show mark scheme →
Aa reduction in the number of jobs for television celebrities
Ban increase in other methods of rewarding television celebrities
Cgreater movement of celebrities between television channels
Dincreased employment of foreign television celebrities
Mark scheme
63May / June 2022 · Paper 31 · Q16Show mark scheme →
Athe amount of earnings above that needed to keep a worker in their current job
Bthe minimum earnings needed to keep a worker in their current job
Cthe social security benefits paid to workers whose earnings are below the poverty line
Dthe amount of earnings needed to cause a worker to change to a different job
Mark scheme
64May / June 2022 · Paper 31 · Q17Show mark scheme →
Aan increase in capital-intensive production
Ban increase in the number of industrial workers
Can increase in the number of people unemployed
Dan increase in the productivity of labour
Mark scheme
65May / June 2022 · Paper 32 · Q16Show mark scheme →
Aexcess profit
Bnormal profit
Creturn on capital
Dstart-up costs
Mark scheme
66May / June 2022 · Paper 32 · Q17Show mark scheme →
Aaccept W3 and a new equilibrium F
Bcontinue to ask for W2 and a new equilibrium G
Ckeep W1 with a new equilibrium H
Dincrease marginal revenue productivity and a new equilibrium E
Mark scheme
67May / June 2022 · Paper 33 · Q16Show mark scheme →
Athe amount of earnings above that needed to keep a worker in their current job
Bthe minimum earnings needed to keep a worker in their current job
Cthe social security benefits paid to workers whose earnings are below the poverty line
Dthe amount of earnings needed to cause a worker to change to a different job
Mark scheme
68May / June 2022 · Paper 33 · Q17Show mark scheme →
Aan increase in capital-intensive production
Ban increase in the number of industrial workers
Can increase in the number of people unemployed
Dan increase in the productivity of labour
Mark scheme
69Feb / March 2022 · Paper 32 · Q17Show mark scheme →
AWorkers in industry Y are highly mobile.
BTrade union organisation in industry Y is relatively strong.
CIndustries X and Y compete with each other for workers.
DIndustry Y has non-monetary advantages.
Mark scheme
70Oct / Nov 2021 · Paper 31 · Q16Show mark scheme →
Aimprovement in marginal productivity of labour
Bincrease in demand for the product
Cincrease in the price of the product
Dincrease in the wage rate
Mark scheme
71Oct / Nov 2021 · Paper 31 · Q17Show mark scheme →
Aw + z
Bx + y
Cx + y – z
Dw + x + z + y
Mark scheme
72Oct / Nov 2021 · Paper 32 · Q16Show mark scheme →
Aeconomic rent decreases; transfer earnings increase
Beconomic rent decreases; transfer earnings stay the same
Ceconomic rent increases; transfer earnings decrease
Deconomic rent stays the same; transfer earnings decrease
Mark scheme
73Oct / Nov 2021 · Paper 32 · Q17Show mark scheme →
Aif demand for the product increases
Bif the elasticity of demand for the workers were high
Cif the elasticity of supply for the workers were high
Dif the productivity of the workers were to increase
Mark scheme
74Oct / Nov 2021 · Paper 32 · Q22Show mark scheme →
Aa rationing system for building development in that region
Ban increase in taxes on investment
Ca requirement that only local labour may be employed
Dan end to nationally negotiated wage rates
Mark scheme
75Oct / Nov 2021 · Paper 33 · Q15Show mark scheme →
Aeconomic rent
Bnormal profit
Copportunity cost
Dtransfer earnings
Mark scheme
76Oct / Nov 2021 · Paper 33 · Q17Show mark scheme →
Aa fall in demand for the industry's product
Ba greater use of machinery in the production of the industry's output
Ca rise in wages paid in similar occupations in other industries
Da weakening of trade union influence in the industry
Mark scheme
77May / June 2021 · Paper 31 · Q16Show mark scheme →
Aany amount above the minimum earnings required to keep labour in its current job
Bthe marginal physical product of labour multiplied by marginal revenue
Cthe minimum amount required to keep labour in its current job
Dthe regular payment to a property owner in exchange for the use of a building
Mark scheme
78May / June 2021 · Paper 31 · Q17Show mark scheme →
A$0.40
B$2.40
C$5.60
D$6.40
Mark scheme
79May / June 2021 · Paper 32 · Q16Show mark scheme →
Aaverage output produced per worker employed × marginal revenue of the product
Baverage output produced per worker employed × price of the product
Cextra product produced by an additional worker × marginal revenue of the product
Dextra product produced by an additional worker × price of the product
Mark scheme
80May / June 2021 · Paper 32 · Q17Show mark scheme →
A1 and 2
B1 and 4
C2 and 3
D3 and 4
Mark scheme
81May / June 2021 · Paper 33 · Q16Show mark scheme →
Aany amount above the minimum earnings required to keep labour in its current job
Bthe marginal physical product of labour multiplied by marginal revenue
Cthe minimum amount required to keep labour in its current job
Dthe regular payment to a property owner in exchange for the use of a building
Mark scheme
82May / June 2021 · Paper 33 · Q17Show mark scheme →
A$0.40
B$2.40
C$5.60
D$6.40
Mark scheme
83Feb / March 2021 · Paper 32 · Q17Show mark scheme →
ALabour costs are a small percentage of total cost.
BThe demand for the final product has a price elasticity of demand that is greater than one.
CThe workforce belongs to a strong trade union.
DThere is a large pool of readily available labour.
Mark scheme