Evaluate the economic benefits of government intervention in labour markets
Edexcel International A-Level Economics Unit 3 October 2024
In 2023 the Government of Mexico intervened in the country’s labour market by:
- increasing the daily minimum wage by 20% to 207.44 pesos
- setting a maximum of 48 hours per week for a full‑time employee.
Evaluate the economic benefits of government intervention in labour markets. Illustrate your answer with an appropriate diagram(s). (20 marks)
Plan
- Paragraph 1
- Argument: one advantage for workers is an increase in their pay
- Diagram: minimum wage diagram
- Evaluation: unemployment (excess supply); government failure
- Paragraph 2
- Argument: one advantage for businesses is an increase in productivity
- Diagram: fall in costs
- Evaluation: increase in costs due to the higher minimum wages, even for low-skilled workers
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