Marking a discuss question in economics
A four-mark response weighs higher pay for low-income workers against the ways businesses may respond.
The question
Discuss the likely effects of an increase in the minimum wage on low-income workers and businesses. (4 marks)
The marking guide
- Award 1 mark for identifying a relevant effect on low-income workers and 1 further mark for explaining how or why that effect occurs.
- Award 1 mark for identifying a relevant effect on businesses and 1 further mark for explaining the business response or a relevant qualification. A conclusion is not required.
The sample response
An increase in the minimum wage raises hourly earnings for low-paid workers who remain employed, which can improve living standards and reduce wage inequality. For businesses, the increase raises labour costs. Firms may absorb the cost through lower profits or productivity gains, but some may raise prices, reduce staff hours or employ fewer workers if the increase is large relative to productivity. The final effect therefore depends on how businesses adjust and whether workers retain their hours.
Axtant’s mark and feedback
You identify and explain an effect on low-income workers: higher earnings can improve living standards. You also identify higher labour costs for businesses and explain possible business responses, including lower profits, productivity gains, higher prices, or reduced hours and employment. This meets all four marks.
Why the guide matters here
The response develops both sides and qualifies the benefit to workers. Higher hourly pay does not guarantee higher weekly income when firms can change employment or staff hours.
A useful teaching follow-up
For a discuss response, look for a mechanism and qualification on both sides. A list of possible outcomes does not show why they might occur.
Try it with your material
This practice question, guide and sample response were written for Axtant. The mark and feedback shown are Axtant’s own for that response.