A precision-instrument manufacturer has won a three-year contract. To complete the contract, it must recruit 10 additional machine technicians within 12 months. Technicians must hold a particular qualification.
There are 14 qualified people seeking this work locally. The manufacturer pays £17 per hour, while other local employers pay £19 per hour. A qualification course takes nine months and costs £3,000. Twenty suitable unqualified people have expressed interest in the work.
The manufacturer is considering either increasing the hourly wage to £21 for all its technicians or paying the course fees for 10 trainees while keeping the hourly wage at £17.
Evaluate the view that the manufacturer should increase the hourly wage rather than pay the trainees' course fees.
80 exam-style questions on OCR GCSE Economics 2.7 The labour market, covering 2.7.1 Role and operation of the labour market, 2.7.2 Determination of wages, 2.7.3 Explain gross and net pay, and 2.7.4 Calculate gross and net pay. Each one has a worked solution and a mark scheme showing where the marks go.