Economics A-Level help

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Falzy
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How would i answer this??
Using a diagram, analyse how, according to economic theory, the wage rate is linked to a worker’s marginal revenue product. (9 marks)
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KH29
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(Original post by Falzy)
How would i answer this??
Using a diagram, analyse how, according to economic theory, the wage rate is linked to a worker’s marginal revenue product. (9 marks)
The higher the MRP, the higher the wage rate. We assume employers will tend to pay those with a higher MRP, because every additional worker hired, they will bring in more revenue. Firms will stop hiring workers when MRP begins to fall.

This is an analyse question, therefore you will need to criticise the MRP Theory and how it cannot always be applicable. You can also bring in wage discrimination or differential briefly.

Diagrammatic Analysis - the MRP / D Labour Market Diagram
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Falzy
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(Original post by KH29)
The higher the MRP, the higher the wage rate. We assume employers will tend to pay those with a higher MRP, because every additional worker hired, they will bring in more revenue. Firms will stop hiring workers when MRP begins to fall.

This is an analyse question, therefore you will need to criticise the MRP Theory and how it cannot always be applicable. You can also bring in wage discrimination or differential briefly.

Diagrammatic Analysis - the MRP / D Labour Market Diagram
Thank you so much mate. Also u see for the MRP theory criticism can i say: However, it is not always true that employers hire workers based off of MRP, sometimes they may wage discriminate and focus on non economic factors such as race or gender. However, the 1970 equal pay act has made it illegal for firms to distribute income inequitably amongst workers due to their gender and so the idea of wage discrimination is arguable.

I done some counterarguments
Last edited by Falzy; 4 weeks ago
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KH29
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(Original post by Falzy)
Thank you so much mate. Also u see for the MRP theory criticism can i say: However, it is not always true that employers hire workers based off of MRP, sometimes they may wage discriminate and focus on non economic factors such as race or gender. However, the 1970 equal pay act has made it illegal for firms to distribute income inequitably amongst workers due to their gender and so the idea of wage discrimination is arguable.

I done some counterarguments
Ideally you can, MRP is just a theory - for example how do use MRP to hire teachers or lawyers. It is more applicable for retail or manufacturing, supposedly. All the best for tomorrow exams.
Last edited by KH29; 4 weeks ago
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Falzy
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(Original post by KH29)
Ideally you can, MRP is just a theory - for example how do use MRP to hire teachers or lawyers. It is more applicable for retail or manufacturing, supposedly. All the best for tomorrow exams.
Feeling really confident man. Thanks for clearing this up for me. Best of luck to you too Kai Havertz
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