The Labour Market | Edexcel A-Level Economics A (9EC0)
The Labour Market
- 91 questions
- 7 subtopics
- Theme 3: business behaviour and the labour market
- Paper 1 and Paper 3
Covers how wages and employment are set: the demand for and supply of labour, immobility and the market failure it causes, wage determination under competition and monopsony, and the elasticity of both sides..
It covers demand for labour, what determines the supply of labour, geographical and occupational immobility of labour, wage determination in competitive and monopsony markets, current issues in the UK labour market, minimum and maximum wages, and public sector pay and the elasticity of demand for and supply of labour.
Sample questions from The Labour Market
Answer each one closed book first, then open the answer.
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Demand for labour
If capital and labour are complementary factors, what happens to labour demand when a firm increases its capital investment?
Show the answer
The demand for labour rises, because complementary factors are used together and more capital requires more workers to operate it effectively. -
Demand for labour
What typically happens to labour demand during a recession?
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Labour demand falls as reduced economic activity and lower consumer spending mean firms need fewer workers. -
What determines the supply of labour
How do promotion opportunities affect the supply of labour to an occupation?
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Better opportunities for career advancement and promotion attract more workers to an occupation, as they value the prospect of future progression and higher earnings. -
What determines the supply of labour
How do natural abilities and skills required for an occupation affect its labour supply?
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They limit the pool of potential workers who can supply their labour, as only those possessing the necessary innate talents or aptitudes can perform the job. -
Geographical and occupational immobility of labour
How do family and social ties cause geographical immobility of labour?
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Workers may be unwilling to move away from family members, friends, and established social networks, even when better job opportunities exist elsewhere. -
Geographical and occupational immobility of labour
How do professional barriers cause occupational immobility of labour?
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Professional bodies may restrict entry through examinations, membership requirements, or registration processes, limiting workers' ability to enter certain occupations. -
Wage determination in competitive and monopsony markets
Define a monopsony labour market.
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A monopsony labour market exists when there is a single or dominant buyer of labour, giving the employer wage-setting power. -
Wage determination in competitive and monopsony markets
How can trade unions influence wages in a labour market?
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Trade unions can act as monopoly suppliers of labour, using collective bargaining to negotiate wages above the competitive equilibrium.
The 7 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Demand for labour | Recall questions on labour as a derived demand, marginal revenue product, and the factors that shift the demand curve. | 18 |
| What determines the supply of labour | Recall questions on wages, conditions, barriers to entry, training requirements, the size of the working population and migration. | 10 |
| Geographical and occupational immobility of labour | Recall questions on what causes each kind of immobility, why it is a market failure, and the unemployment that results. | 16 |
| Wage determination in competitive and monopsony markets | Recall questions on how the wage is set in a competitive market, how a monopsonist depresses it, and what a trade union changes. | 12 |
| Current issues in the UK labour market | Zero-hours contracts and the Employment Rights Act 2025, the gig economy and the Uber ruling, changes in self-employment, wage stagnation since 2008, in-work poverty and the National Living Wage, inactivity through long-term sickness, the end of EU free movement, and whether flexible work benefits the economy. | 15 |
| Minimum and maximum wages, and public sector pay | Recall questions on the effect of a wage floor above equilibrium, how public sector pay is set, and the policies used to address immobility. | 8 |
| The elasticity of demand for and supply of labour | Recall questions on what makes each side of the market more or less elastic, and what that means for wages and employment. | 12 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
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