Practise labour-demand questions by linking furniture demand, online sales or specialist skills to the number of workers firms employ.
When a firm increased its prices, many consumers stopped buying its products.
As a result of changes in consumer tastes, the demand for furniture made of wood is expected to increase by about 5% in the next five years. Woodcutters are employed to cut down trees to produce the wood required to make furniture.
With reference to the data above and your knowledge of economics, analyse how an increase in demand for furniture made of wood may affect the demand for woodcutters.
AO2 (3 marks)/AO3 (3 marks)
AO2 and AO3
- When an industry needs labour to create a good/service, the demand for labour is a derived demand
- This is because the good/service cannot be produced without labour
- Therefore, woodcutters are needed to cut the wood with which to make the furniture (the final product)
- An increase in demand for furniture made of wood by 5% is likely to lead to an increase in the demand for woodcutters
- This is because the greater the demand for a good or service, the greater the demand for labour is likely to be
Level
Mark
Descriptor
0
No rewardable material.
Level 1
1-2
- Demonstrates basic knowledge and understanding by developing relevant points. Limited application of economic terms, concepts, theories and calculations (AO2).
- Information presented will lack selectivity and organisation. Interpretation of economic information will be limited, with a lack of analysis of issues (AO3).
Level 2
3-4
- Demonstrates partial knowledge and understanding by developing relevant points. Partial application of economic terms, concepts, theories and calculations (AO2).
- Information presented will demonstrate some selectivity and organisation. Interpretation of economic information will be good, with some analysis of issues (AO3).
Level 3
5-6
- Demonstrates clear knowledge and understanding by developing relevant points. Appropriate application of economic terms, concepts, theories and calculations (AO2).
- Information presented will demonstrate excellent selectivity and organisation. Interpretation of economic information will be excellent, with a thorough analysis of issues (AO3).