Cafés and supermarkets in a town recruit from many of the same workers. Local supermarkets increase their hourly pay for entry-level jobs. Demand for café meals does not change.
Before supermarkets increase their pay, the labour market for café assistants is in equilibrium at £12.50 an hour, with 240 assistants employed. The table shows estimated labour demand and labour supply after supermarket pay increases.
| Hourly wage | Café assistants demanded | Café assistants supplied |
|---|---|---|
| £12.50 | 240 | 180 |
| £13.50 | 210 | 210 |
| £14.50 | 180 | 240 |
Using the table, identify the new equilibrium hourly wage for café assistants.
Calculate the change in the number of café assistants employed after supermarkets increase their pay.
Explain why the increase in supermarket pay reduces the supply of café assistants.
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.