A_GCE_Economics_2884_June_2006_Question_Paper

OXFORD CAMBRIDGE AND RSA EXAMINATIONS

Advanced GCE

ECONOMICS2884

ECONOMICS OF WORK AND LEISURE

Monday 26JUNE2006Afternoon 1hour30minutes

Additional materials:

8 page Answer Booklet

TIME 1 hour 30 minutes

INSTRUCTIONS TO CANDIDATES

Write your name, Centre number and candidate number in the spaces provided on the answer booklet. Answer Question 1 and one question from Section B.

Write all your answers on the separate answer booklet provided.

If you need to use additional answer sheets, fasten these sheets securely to the answer booklet. INFORMATION FOR CANDIDATES

The number of marks is given in brackets [ ] at the end of each question or part question.

The quality of your written communication will be taken into account in the marking of your answer to

Section B.

Section A

Answer this question.

m I

n o i t a r g i m

1

d n a

s c i m

o n o c E

Extract 1

Extract 2

Ruth Lea, Director of the Centre for Policy Studies, April 2004.

2884 Jun06

2884 Jun06[Turn over

Note [Sources: The Observer, 11/4/04 and The Daily Telegraph 19/4/04]

(a)Identify one conclusion about the UK from each ]

2[.2 d n a 1 .s g i F f o (b)Using the extracts, explain two bene ts to the UK economy which are argued to result from immigration.[4]

(c)Comment on the view on immigration that “meanwhile, it is the employers who bene t” (lines 22-23). [4]

(d)“…we should allow markets to work by paying more to those whose skills are in short supply”(lines 16-17).

]

4[.

t n e m e t a t s s i h t n i a l p x e o t s i s y l a n a d n a m e d d n a y l p p u s e s U (e)“I would question the ethics of encouraging people to migrate from poor to rich countries”(lines 14-15).

]6[ .e r e h d e s s e r p x e w e i v e h t s s u c s i D Net migration into UK (thousands)Foreign and foreign-born workers, 2002(percentage of workforce)

2 .g i F 1

.g i

F

2884 Jun06Section B

Answer one question.

2(a)Explain how a pro t-maximising employer will choose the quantity of labour employed. [10]

(b)For an occupation of your choice, discuss the extent to which its average rate of pay is ]

51[ .s r e y o l p m e m o r f d n a m e d y b d e n i m r e t e d 3(a)Explain why rms operating under conditions of monopolistic competition are less e cient ]

01[.n o i t i t e p m o c t c e f r e p n i e s o h t n a h t (b)Discuss the view that the emergence of low-cost airlines in the UK in recent years has made ]51[.

t n e i c i f f e e r o m l e v a r t r i a r o f t e k r a m e h t 4Inequality of wealth is a major cause of inequality of income. It follows that the UK government, if it wishes to achieve a signi cant reduction in income inequality, should introduce a wealth tax.

(a)Explain how inequality of income and inequality of wealth are inter-related.[10]

(b)Discuss the view that taxation aimed at reducing inequality of wealth is the best way for a UK ]

51[.e m o c n i f o y t i l a u q e n i e c u d e r o t t n e m n r e v o g Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable e ort has been made by the publisher (OCR) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity.

OCR is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge.