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#O C R GCE Physics B H557/01: Fundamentals of physics A Level Mark Scheme for June 2023
#O C R GCE Physics B H557/01: Fundamentals of physics A Level Mark Scheme for June 2023
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#O C RA Level Economics
H460/01 Microeconomics
May 2023
Time allowed: 2 hours
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Please write clearly in black ink. Do not write in the barcodes.
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INSTRUCTIONS
• Use black ink. You can use an HB pencil, but only for graphs and diagrams.
• Write your answer to each question in the space provided. If you need extra space use
the lined pages at the end of this booklet. The question numbers must be clearly shown.
• Answer all the questions in Section A, one question in Section B and one question
in Section C.
INFORMATION
• The total mark for this paper is 80.
• The marks for each question are shown in brackets [ ].
• Quality of extended response will be assessed in questions marked with an asterisk (*).
• This document has 20 pages.
ADVICE
• Read each question carefully before you start your answer.
2023 Turn over
, 2
SECTION A
Read the stimulus material and answer all the parts of Question 1.
Wage differentials in the USA
Research shows the ratio of Chief Executive pay (‘remuneration’) to employee remuneration in the
USA has increased significantly since 2010 (see Fig. 1). In 2019, Chief Executives at the largest
350 firms in the USA earned 320 times more than a typical employee.
Fig. 1
Chief Executive-to-employee remuneration ratio (USA), 2010 – 2019
400
350
300
250
200
150
100
50
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Economic Policy Institute Year
Chief Executives earned an average of $21 million in 2019, a 14% increase since 2018. In
that year, the US stock market price index, which shows changes in the share prices of US 5
companies also rose (see Fig. 2).
Fig. 2
Chief Executive remuneration and stock market performance (USA), 2010 – 2019
Index $m
3000 30
2500 25
2000 20
1500 15
1000 10
500 5
0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year
USA stock market index (LH axis)
Chief Executive remuneration, $m (RH axis)
Source: Economic Policy Institute
2023
, 3
This growth in Chief Executive remuneration has happened while wage growth for most
Americans has remained relatively low. To distract attention from their remuneration, some
Chief Executives have taken a voluntary cut in salary. However, this approach is criticised as
much of their remuneration comes from share options (the right to buy shares at set prices) and 10
bonuses. Other policies that may help reduce the remuneration gap between Chief Executive
and employee have been suggested, including:
• reinstating a higher marginal income tax rate at the very top income levels;
• setting corporation tax rates higher for firms that have higher ratios of Chief Executive-to-
employee remuneration; 15
• allowing greater use of ‘say on pay’ which allows a firm’s shareholders to vote on
Chief Executive remuneration.
Society is increasingly recognising who are the essential workers. They harvest our food, stock
our grocery shelves and deliver goods all over the country. They look after our children and care
for us when we are ill. They are also amongst the lowest-paid workers in the country. Why is this? 20
And, in contrast, why are relatively non-essential jobs, in such areas as entertainment and sport,
so well paid?
The answer to these questions is not clear. The traditional economics answer would be to
consider the concepts of demand and supply. Many of the essential occupations are easy to
enter. For example, a cleaner might not require specialist knowledge or training. 25
A different answer could be ‘scalability’. A cleaner, however skilled at their job, can only clean one
building at a time. However, an entertainer can provide value to millions of people at the same
time, thanks to television or the Internet. In many jobs, such as those in entertainment or sport,
it is difficult to measure marginal physical productivity and so pay is set in a seemingly random
way, often based on power. 30
This ‘power differential’ is a new area of research to explain wage differentials. This suggests that
skill levels are not good predictors of wage levels, as there are big differences in wage between
workers who do the same job.
In the USA, business leaders and politicians have worked together to weaken trade unions,
oppose minimum wage legislation and remove labour market restrictions. Marshall Steinbaum, 35
an economist at the University of Utah, suggests that the decline in workers’ rights and
bargaining power of trade unions alongside the greater power of employers is the main reasons
for growing wage differentials. He says that “[The power] American bosses have to dictate
take-it-or-leave-it terms to workers is the core reason our ‘essential’ workforce are underpaid.”
Source: Adapted from The Washington Post (6/4/20) & Pressenza (19/8/20)
2023 Turn over
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