With the help of a diagram, evaluate the consequences of imposing an effective minimum wage on the employment level and the wage level in a monopsony labour market.

Economics

IGCSE&ALevel

CAIE

Exam No：9708_m25_qp_42 Year：2025 Question No：3

Answer:

8.3.10.1 definition of transfer earnings

8.3.10.2 definition of economic rent

8.3.10.3 factors affecting transfer earnings and economic rent in an occupation

8.3.2 factors affecting demand for labour in a firm or an occupation

8.3.4.1 definition and calculation of marginal revenue product

8.3.4.2 derivation of an individual firm’s demand for labour using marginal revenue product

8.3.6 causes of shifts in and movement along the supply curve of labour to a firm or an occupation

8.3.8.1 influence of trade unions on wage determination and employment in a labour market

8.3.8.2 influence of government on wage determination and employment in a labour market using a national minimum wage

8.3.8.3 influence of monopsony employers on wage determination and employment in a labour market