Question 19M.3.HL.TZ0.3g
| Date | May 2019 | Marks available | [Maximum mark: 2] | Reference code | 19M.3.HL.TZ0.3g |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | State | Question number | g | Adapted from | N/A |
Table 1 provides information about Fairland.
Table 1
Figure 6 illustrates Fairland’s demand (D) for and supply (S) of low-wage labour.
Figure 6
In order to raise the living standards of low-wage workers, the government of Fairland has decided to impose a minimum wage of $10 per hour.
The marginal rates of income tax in Fairland are given in Table 2.
Table 2
State two interventionist supply-side policies that are likely to increase the demand for low-wage labour in Fairland.
[2]
Award [1] for each appropriate policy stated.
Policies may include:
- investment in infrastructure
- tax cuts or tax allowances in industries that hire low-wage labour
- subsidies for firms that hire low-wage labour
- Investment in education and training/human capital
- Investment in health.
Examiners should be aware that some candidates may take alternative approaches, which, if appropriate, should be fully rewarded.
A range of supply-side policies was suggested, with many being non-interventionist, such as a reduction in corporate taxes or a reduction in the minimum wage. There were also many responses which did not focus on low wage labour, such as “subsidies” or “help for infant industries”. In order to be rewarded for each policy, candidates were required to identify how these policies might influence the labour market. It is clear that many candidates were unable to do so.
