AQA GCSE Economics: The labour market: wages, differentials and gross and net pay (8136) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 3.1.5.4, The labour market, in AQA’s GCSE Economics (8136) specification, which was first taught from September 2017. The specification has no tiers. Every place, job and figure is invented. For explanations, use the study guide and revision notes, the AQA GCSE Economics hub, the checklist and the free diagnostics.

Questions

1. State what is meant by (a) gross pay [1] and (b) net pay [1].

2. The table shows the market for bakery workers in Town F (illustrative). W is the hourly wage.

W (£)	Workers wanted	Workers willing
12	200	100
14	180	130
16	160	160
18	140	190
20	120	220

(a) Use the table to find the wage at which the market clears, and the number of workers hired then. [2] (b) Calculate the shortage or surplus at £20, and say which it is. [2] (c) Explain what is likely to happen to the wage if it starts at £12. [2]

3. Explain why the demand for labour is a derived demand. [3]

4. In Town F, a rise in demand for bread raises the number of bakery workers wanted by 50 at every wage. Before, demand was Qd = 320 − 10W and supply is Qs = 15W − 80. (a) Calculate the new equilibrium wage and number employed. [3] (b) Calculate the change in the hourly wage bill (wage multiplied by workers employed). [2]

5. Explain two factors that could reduce the supply of electricians in a region. [4]

6. Instead, in Town F the supply of bakery workers falls by 50 at every wage, so Qs = 15W − 130, with demand Qd = 320 − 10W. Calculate the new wage and number employed. [3]

7. A hospital porter earns £12.50 an hour. A laboratory technician earns £17.50. (a) Calculate how much more, as a percentage, the technician earns than the porter. [2] (b) Explain two reasons for the difference between the two occupations. [4]

8. Explain two reasons why a worker with 15 years’ experience may be paid more than a new starter in the same job. [4]

9. A driver’s basic week is 36 hours at £10 an hour. Another 8 hours are worked as overtime, paid at time and a half. Income tax is 25% of gross pay above £80, and National Insurance is 5% of gross pay. (a) Calculate gross pay. [3] (b) Calculate net pay. [3]

10. A sales assistant is paid £1,400 a month plus 3% commission on sales. In one month, sales are £18,500. Total deductions are 20% of gross pay. (a) Calculate gross pay. [2] (b) Calculate net pay. [2] (c) A fixed gross salary of £1,700 a month is offered instead. Calculate the monthly sales at which the commission scheme gives the same gross pay. [2] (d) The assistant also receives £310 net from a weekend job and £12 interest. Calculate total monthly income. [1]

11. A worker’s salary rises from £24,000 to £25,200 a year. Income tax is 20% of pay above a £9,000 allowance, National Insurance is 6% of gross pay and the pension contribution is 2.5% of gross pay. Net pay before the rise was £18,960. (a) Calculate the percentage rise in gross pay. [1] (b) Calculate net pay after the rise. [3] (c) Calculate the percentage rise in net pay, to 1 decimal place. [2]

12. In Town E, bus drivers earn more than cleaners. Explain why, and evaluate whether the gap is likely to last. [9]

Answers

1. (a) Total pay before any deductions are taken off [1]. (b) Pay left after deductions such as tax, National Insurance and pension contributions; take-home pay [1]. [2] Examiner insight: Net pay needs the idea of deductions; calling it “pay after tax” alone leaves out the other items.

2. (a) Wanted equals willing at £16 [1], with 160 workers [1]. (b) At £20, 220 − 120 = 100 [1], a surplus because more are willing than wanted [1]. (c) At £12 only 100 are willing but 200 are wanted, a shortage of 100 [1], so employers compete for workers and the wage is likely to rise towards £16 [1]. [6] Examiner insight: Naming the gap as a shortage and then saying what employers do about it is what turns a reading into an explanation.

3. Demand for labour comes from firms wanting workers to produce goods or services [1]. The firm only wants them because customers want the product [1]. For example, if demand for bread rises, bakeries want more bakers, and if it falls they want fewer [1]. [3] Examiner insight: An example alone is a description; the link between product demand and labour demand carries the explanation.

4. (a) New demand: Qd = 370 − 10W [1]. Set 370 − 10W = 15W − 80, so 450 = 25W and W = £18 [1]. Q = 370 − 180 = 190 workers [1]. (b) Before: 16 × 160 = 2,560 [1]. After: 18 × 190 = 3,420, so the wage bill rises by £860 an hour [1]. [5] Examiner insight: Write down the equation you solve. If the final figure is wrong, visible working gives something to credit.

5. Any two factors, each with an explanation: a long or costly training period means fewer people qualify [1], so fewer are willing at each wage [1]; better pay in a rival job such as a neighbouring region [1] draws electricians away, so supply falls [1]. Others: worse conditions, retirements, fewer migrants. [4] Examiner insight: A factor named without saying why it cuts the number willing tends to earn less than one with its reason.

6. Set 320 − 10W = 15W − 130, so 450 = 25W [1]. W = £18 [1]. Q = 320 − 180 = 140 workers [1]. [3] Examiner insight: Compare with question 4: the wage is the same but employment is 50 lower, because a fall in supply and a rise in demand move employment in opposite directions.

7. (a) Gap = 17.50 − 12.50 = £5 [1]. 5 ÷ 12.50 × 100 = 40% [1]. (b) Technician needs qualifications, so fewer people can do it and supply is lower [1], giving a higher wage [1]. The technician’s work may bring in more value, or carry more responsibility, so demand for the job is stronger [1], which also pushes the wage up [1]. [6] Examiner insight: Dividing by the technician’s pay instead of the porter’s gives 28.6%, a common slip; the comparison base is the pay you are measuring against.

8. Experience makes a worker more productive [1], so the firm gains more from them and will pay more to keep them [1]. Seniority or responsibility, such as supervising others [1], justifies a higher wage and may mean fewer people can do the role [1]. [4] Examiner insight: “Paid more because experienced” repeats the question; the reason is what experience does for output or supply.

9. (a) Basic: 36 × 10 = 360 [1]. Overtime rate 10 × 1.5 = 15, so 8 × 15 = 120 [1]. Gross = 360 + 120 = £480 [1]. (b) Tax: 25% × (480 − 80) = 25% × 400 = £100 [1]. National Insurance: 5% × 480 = £24 [1]. Net = 480 − 100 − 24 = £356 [1]. [6] Examiner insight: Applying the tax rate to the whole £480 gives £120 and a net of £336; the allowance wording matters.

10. (a) Commission: 0.03 × 18,500 = £555 [1]. Gross = 1,400 + 555 = £1,955 [1]. (b) Deductions: 0.20 × 1,955 = £391 [1]. Net = £1,564 [1]. (c) Commission needed: 1,700 − 1,400 = £300 [1]. Sales = 300 ÷ 0.03 = £10,000 [1]. (d) 1,564 + 310 + 12 = £1,886 [1]. [7] Examiner insight: Total income is the sum of net amounts received; adding the gross figure instead overstates what the person has.

11. (a) (1,200 ÷ 24,000) × 100 = 5% [1]. (b) Tax: 0.20 × (25,200 − 9,000) = £3,240 [1]. National Insurance 0.06 × 25,200 = £1,512 and pension 0.025 × 25,200 = £630 [1]. Net = 25,200 − 3,240 − 1,512 − 630 = £19,818 [1]. (c) Rise = 19,818 − 18,960 = £858 [1]. 858 ÷ 18,960 × 100 = 4.5% [1]. [6] Examiner insight: Net rises by less than 5% because the allowance stays fixed; saying why shows understanding beyond the arithmetic.

12. Drivers need a licence and training, so fewer people can supply the job than cleaning [1]. Supply curve for drivers lies to the left of the cleaners’ [1]. Responsibility for passengers’ safety and unsocial hours may need extra pay to attract workers [1]. Demand for drivers is derived from passengers’ demand for travel, and each driver may bring in more revenue [1]. Low supply with strong demand gives a higher wage [1]. Evaluation: the gap may last because training takes time and cost, so cleaners cannot quickly move [1]. It may narrow if more people train as drivers, if cleaners become scarce, or if demand for buses falls [1]. Some workers choose jobs for hours or location, not pay [1]. Judgement: likely to last while the licence needed keeps driver supply low [1]. [9] Examiner insight: Answers tend to gain more credit when each cause is tied to a curve, and the closing judgement names the condition it rests on.

Where marks are usually lost

• Writing “supply and demand” with no statement of which curve moves, or which way.
• Calling a surplus a shortage, or the reverse.
• Using the wrong base for a percentage gap.
• Applying a tax rate to the whole of gross pay when an allowance is given.
• Leaving out the overtime multiplier.
• Adding gross pay, not net pay, to find total income.
• Giving a cause of a wage gap with no link to the wage.
• Stating a conclusion in an evaluation with no reason for it.

Next steps

• Revise with the revision notes and the study guide.
• Use the printable checklist and the course hub to plan what is next.
• Check your level with a free 10-minute diagnostic.
• Book a free trial class: /trial/.

Official syllabus

Source: AQA, GCSE Economics (8136) specification, Version 1.0, for first teaching from September 2017. Content follows 3.1.5.4, The labour market.