The year 2014 saw the longest-ever strike by platinum miners in South Africa. It involved 70000 miners out of a total of 200000 employed in the industry. These miners included migrant workers from neighbouring countries who had increased the size of the country's labour force. The strike cost the world's three largest platinum producing firms US$1.4 billion and reduced the country's exports of platinum.

Mark scheme

Marking points from the official mark scheme (May/June 2016). The mark or mark type is shown in brackets.

1. [1] to gain higher wages / to resist wage cuts
2. [1] to improve working conditions
3. [1] to resist job losses.
4. [1] May increase a current account deficit / reduce a current account surplus
5. [1] export revenue is part of the current account / export revenue is a credit items
6. [1] May increase unemployment
7. [1] exporting firms may reduce their output
8. [1] which would lower demand for workers
9. [1] May reduce economic growth
10. [1] exporting firms may reduce output
11. [1] can lose tax revenue from lower exports / lower output
12. [1] A fall in revenue may reduce a firm's profit.
13. [1] Lower profits will reduce the funds
14. [1] a firm has to reinvest / spend on capital goods
15. [1] Lower profit will reduce the incentive to spend on capital goods
16. [1] the expected return will be lower
17. [1] Lower revenue / profit may make it more difficult for a firm to borrow
18. [1] sell shares
19. [1] to finance spending on capital goods
20. [1] Lower revenue may make a firm realise it needs to cut costs of production
21. [1] improve quality of products
22. [1] and this may require the firm to buy new capital equipment
23. [1] If the fall is the result of a strike the firm may seek to replace labour by capital equipment
24. [1] A larger labour force may enable greater advantage to be taken of division of labour/specialisation / economies of scale
25. [1] this can reduce average costs of production
26. [1] as workers can concentrate on what they are best at
27. [1] can be trained more quickly
28. [1] reduces the amount of capital equipment needed
29. [1] lower costs may increase sales at home and abroad
30. [1] increasing output and raising incomes
31. [1] A larger labour force may reduce the dependency ratio
32. [1] a higher proportion of workers to non-workers will increase income per head
33. [1] A larger labour force will enable successful firms to expand
34. [1] this will increase GDP
35. [1] Multinational companies may be attracted to set up in the country by a larger labour force
36. [1] this may result in a rise in wages
37. [1] Population may increase by more than the labour force
38. [1] this will increase the dependency ratio
39. [1] The labour force may increase but demand for labour may not
40. [1] so the unemployment rate may increase
41. [1] so income divided by population may fall
42. [1] The quantity of the labour force may increase but the quality of the labour force may fall
43. [1] productivity may decline
44. [1] reducing output and incomes per head
45. [1] An increase in the labour force may increase competition in the labour market
46. [1] lowering wages