Essay on June 2010 FS583 OCR Economics Exam Essa

Submitted By masonjar97
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June 2010 FS583 OCR Economics Exam Essays

Exemplar Work – Annotated Scripts with Marker’s Comments

Assessment for Learning Opportunities

Analyse, using examples, how trade unions may be responsible for labour market failure
Guidance from the question: This is an analysis question worth 15 marks. This means there are three levels of marking (L1/2/3). This requires a clear analysis of trade union manipulation of the free play of the market to get full marks.
We also know there is a diagram that can be used to develop this response. Apply it and analyse it to jump to L3.

Trade unions aim to protect members and their jobs by seeking to promote the interests of their members. They negotiate pay and conditions of employment and provide a channel of communication between workers and employers. Trade unions may be responsible for labour market failure in a number of ways including unemployment and efficiency. Labour market failure occurs when the market forces of demand and supply do not result in an efficient allocation of labour resources.

If the effect of a trade union pushes the wage rate up from W to W1, then the union members will now be prepared to work for W1 or above. This means that workers will be prepared to work for wages that are above the equilibrium rate and this causes there to be excess supply of labour as the demand for labour falls from Q to Q1. The diagram shows a fall in unemployment from Q to Q1, and as unemployment is an example of labour market failure, the trade unions are responsible for labour market failure in this way.
If firms are forced to pay above the market price for wages by trade unions, then they will not be able to achieve efficiency because they are not able to produce at the lowest point on the average cost curve.
There may also be extra costs for the employer as an effect of trade unions bargaining in the form of additional benefits requested by them. For example, British Airways staff request heavily discounted flight tickets which impose extra costs on the airlines as they have to provide them with tickets for lower process than consumers which means they are not gaining the extra revenue they could if they offered them to paying customers who would pay the full price of the tickets.

Overall, a well developed response. Firstly, the structure is organised and concise. There is good use of whitespace and also a clear diagram followed by supporting statements. When marking this against the criteria, it is clearly a level 3 response. It is on the cusp of a 13+ mark, because the response could use further real world application and also needs further development of the concepts introduced.
FINAL MARKS: 13/15

L3 (9-15) For an explanation of how trade unions may be responsible for failure in labour markets. For a 13+ mark candidates must offer clear analysis of trade union manipulation of the free play of the market.
L2 (5-8) For an application of knowledge as to how trade unions may be responsible for failure in labour markets. For a 7+ mark candidates must offer a clear real world application.
L1 (1-4) For knowledge and understanding of how trade unions may be responsible for failure in labour markets.
Discuss the extent to which trade union activity may still be seen to be a significant cause of labour market failure in 2010.

What we know from the question: ‘Discuss’ means this is an evaluative response. Also, it’s 20 marks so it wil require clear analysis. It will need to be a balanced analysis and a clear evaluation is required.

Part a) of this question illustrates how trade unions can be responsible for labour market failure, however there are others cause of labour market failure such as labour immobility, time taken to train for certain occupations and monopsony buyers of labour.
Geographical immobility refers to obstacles that workers experience when moving jobs in one are to another. When this occurs, shortages of workers in…