This set covers the whole of labour and wages: explaining a wage gap, reading a labour market table, interpreting productivity, describing bargaining neutrally and avoiding claims about worth. Questions run from easy to harder. Write full sentences for the explain questions, because that is what the exam rewards.
Work on paper first. Open each answer only after you have written yours.
Questions
Question 1 (easy). In the fictional town of Bukit Mawar, an electrician earns RM 4,500 a month and a shop assistant earns RM 1,900. Label each as demand side or supply side. (a) electricians need a 3-year licence; (b) each electrician hour earns the firm RM 110 of billable work; (c) 800 people can work as shop assistants after one day of training.
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(a) supply side, since the licence limits the number of electricians. (b) demand side, since it raises what the firm will pay. (c) supply side, since a large pool of people can do the job.
Question 2 (easy). Using Question 1, find the wage gap in ringgit, the ratio of the two wages, and the gap as a percentage of the shop assistant wage.
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Gap: 4,500 − 1,900 = RM 2,600. Ratio: 4,500 ÷ 1,900 = 2.37 (to 2 d.p.). Percentage: 2,600 ÷ 1,900 × 100 = 136.8% (to 1 d.p.), because the base is the shop assistant wage.
Question 3 (easy to medium). The market for fruit pickers in the fictional district of Lembah Jingga is:
| Daily wage (RM) | Pickers demanded | Pickers supplied |
|---|---|---|
| 30 | 14 | 2 |
| 40 | 11 | 5 |
| 50 | 8 | 8 |
| 60 | 5 | 11 |
| 70 | 2 | 14 |
Find the equilibrium wage and number employed.
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Quantity demanded equals quantity supplied at RM 50, where both are 8. So the equilibrium wage is RM 50 and 8 pickers are employed.
Question 4 (medium). Using Question 3, state the size of the shortage at RM 30 and the surplus at RM 70.
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At RM 30: demand 14, supply 2, a shortage of 12. At RM 70: demand 2, supply 14, a surplus of 12. The market is symmetrical here, so both gaps are 12 pickers.
Question 5 (medium). A new fruit-processing plant opens and demand for pickers rises by 6 at every wage. Find the new equilibrium wage and employment, and say whether the supply curve shifted.
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New demand is 20, 17, 14, 11 and 8 at RM 30, 40, 50, 60 and 70. Supply is 2, 5, 8, 11 and 14. They match at RM 60, where both are 11. The new equilibrium is RM 60 with 11 pickers. The supply curve did not shift: employment rose because of a movement along it as the wage rose from RM 50 to RM 60. The wage rose by 10 ÷ 50 = 20%.
Question 6 (medium). In a box factory, 25 workers make 500 boxes a week. After new training, the same 25 workers make 600 boxes. Find the productivity before and after and the percentage change.
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Before: 500 ÷ 25 = 20 boxes per worker. After: 600 ÷ 25 = 24. Change: (24 − 20) ÷ 20 × 100 = 20%.
Question 7 (medium). In the factory in Question 6, the weekly wage was RM 400 before and is RM 480 after. Find labour cost per box before and after, and interpret.
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Before: 400 ÷ 20 = RM 20 per box. After: 480 ÷ 24 = RM 20 per box. The wage rose by 80 ÷ 400 = 20%, the same as productivity, so labour cost per box is unchanged. The firm could afford the higher wage without raising its cost per box.
Question 8 (medium to harder). At a shipyard, basic pay is RM 2,800 a month. The union asks for 6% and the employer offers 2%. They settle at 4%. Find the claim, the offer and the settlement in ringgit, and show that the settlement is the midpoint.
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Claim: 2,800 × 1.06 = RM 2,968. Offer: 2,800 × 1.02 = RM 2,856. Settlement: 2,800 × 1.04 = RM 2,912. Midpoint: (2,968 + 2,856) ÷ 2 = 5,824 ÷ 2 = RM 2,912, so the settlement is the midpoint.
Question 9 (harder). Rewrite this sentence neutrally and with evidence, assuming the shipyard has 150 workers: “The union was greedy and the settlement ruined the shipyard.”
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One answer: “The union claimed 6% and the employer offered 2%, and they settled at 4%. Supporters of bargaining argue it gives workers a voice, while critics argue a higher wage bill can reduce hiring. For 150 workers, a 4% rise on RM 2,800 adds 150 × 112 = RM 16,800 a month. The effect on employment would depend on how the firm adjusts.” The rewrite removes emotive words, attributes viewpoints and uses a supplied figure. (Check: 2,800 × 0.04 = 112.)
Question 10 (harder). A designer in the fictional city of Pantai Emas earns RM 9,000 a month and a childcare worker earns RM 2,250. A student writes: “The designer is four times more valuable.” Evaluate the statement.
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The ratio 9,000 ÷ 2,250 = 4 is correct for pay. The conclusion is not supported, because pay reflects demand, supply and bargaining, and the data does not measure personal worth or social value. A better statement is: “The designer’s pay is four times the childcare worker’s. Without data on supply, demand and revenue, the reason for the gap cannot be established.”
Question 11 (mixed). A worker earns RM 2,500 a month. Pay rises by 4%, then by a further 5% the next year. Find the final pay and the overall percentage rise. Why is the overall rise not 9%?
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After the first rise: 2,500 × 1.04 = RM 2,600. After the second: 2,600 × 1.05 = RM 2,730. Overall rise: 230 ÷ 2,500 × 100 = 9.2%. It is not 9% because the second rise is calculated on a larger base (RM 2,600), not on RM 2,500.
If you got these wrong
- Questions 1, 2 and 10: you may be giving one side of the market or reading pay as worth. Revisit explain a wage difference using supplied factors and avoid inferring an individual’s worth from pay.
- Questions 3, 4 and 5: the usual causes are misreading the table or confusing a shift with a movement. Review distinguish demand for labour from worker supply and try the demand, supply and shift explorer.
- Questions 6 and 7: check you divided by workers and used the old figure as the base. See interpret a productivity change.
- Questions 8, 9 and 11: the problems are usually percentage bases or tone. Read describe collective-bargaining mechanisms neutrally and use the percentage-base explorer.
Record each error in the mistake log, and use the ratios tool when a ratio statement feels shaky.
If an error keeps coming back after you have reread the lesson, our teachers can look at your working with you in online one-to-one Economics tuition.