Discuss how economic theory analyses wage rate determination. Consider if the theory can be used to explain the fact that the highest pay is often given for the work that is most agreeable while those occupations that are most unpleasant, such as rubbish collection, receive low pay.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

1. Candidates should consider each part of the statement. The theory of wage determination should be explained and a comment given on how the outcome may be affected by the existence of trade union bargaining, by minimum wages affecting the supply, by large monoposonies forcing down wages from the competitive level, by whether the worker is in the private or public sector. A link to the specific examples given should be made and a conclusion of the possible usefulness of the theory should be given.
2. L4 (18-25 marks): for a thorough explanation of the analysis of wage determination with a clear comment on how unions, minimum wages and large monopsonistic businesses, public/private sector may be used to explain the difference in wages. There should be a conclusion and a well-structured answer.
3. L3 (14-17 marks): for a weaker explanation of the theory with an undeveloped comment on how the outcome might be affected by unions, minimum wages, public/ private sector. Their explanation may still be competent but the link to the particular examples would probably be brief.
4. L2 (10-13 marks): for a correct but undeveloped analysis with much briefer comment on the different factors affecting the outcome and little, if any, link to the examples given.
5. L1 (1-9 marks): for an answer that shows some knowledge but does not indicate that the question has been fully grasped or where the answer is mostly irrelevant.