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CAIE A-Level Economics 8.3.2 Labour Demand Determinants

Practise explaining derived labour demand through final-product demand, productivity, wages, capital substitution and labour's cost share, then predicting curve elasticity and…

Syllabus
2026–2028
Course
Economics 9708
Level
A2

Exam points

  • shift labour demand right when product demand, worker productivity or output price rises
  • shift labour demand left when subsidised capital substitutes for workers in production
  • explain inelastic labour demand through inelastic product demand or a small labour-cost share

8.3.2—Labour demand determinants question 1

[Maximum number: 1]

What would help a trade union to negotiate an increase in the wage rates of its members without causing a reduction in the numbers employed?

A

Labour costs are a major proportion of total costs.

B

The demand for the labour employed is elastic.

C

The demand for the good produced is elastic.

D

The demand for the good is increasing.

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