Care homes and hotels recruit from a pool of workers who have suitable skills for either job. Care homes experience an increase in demand for assistants and raise the wage they offer; hotel wages are unchanged. Which outcome best illustrates the allocation of resources through the price mechanism?
Suitable workers move from hotel work into care work because the higher care wage provides an incentive
Suitable workers move from care work into hotel work because the lower hotel wage signals greater scarcity
Care homes supply additional workers to hotels because firms are sellers rather than buyers in factor markets
Suitable workers remain in their current jobs because wages reward labour but do not reallocate it
84 exam-style questions on AQA GCSE Economics 1.2 Resource allocation, covering 1.2.1a Markets, 1.2.1b Allocation of resources, 1.2.1c Factor and product markets, 1.2.2a Primary, secondary and tertiary sectors, 1.2.2b Goods and services, 1.2.3a Specialisation and the division of labour, 1.2.3b How and why producers specialise, and 1.2.3c Costs and benefits of the division of labour. Each one has a worked solution and a mark scheme showing where the marks go.