Every piece of knowledge, every analysis chain and every evaluation point that the 34 Unit 8 Paper 4 essay questions in the bank (2016–2026) ask for. Tick an item only when you can explain it from memory, out loud or on paper, without looking.
清单条目使用英文，也就是考试作答所用的语言。标题、按钮和说明仍为中文。
0 / 113ticked
How to use this checklist
Cover the page and try each item out loud or on paper. Tick it only when you got it right without looking.
Items with a diagram: draw it yourself first, then open it to compare.
Use the 'Asked in' links to open the real questions that need an item, and write one of them.
Work on the items you cannot tick first. 'Hide ticked' shows only those.
Before a test, print the checklist and go through it again on paper.
8.1Government policies to achieve efficient resource allocation and correct market failure
Three essays here are set on named externalities (climate change, traffic congestion and the pollution and waste of the fashion industry), one on controlling dominant firms and one on whether governments can eliminate market failure. The externality diagrams and the tax, subsidy, permit, regulation, property-rights and information chains are in the Unit 7 checklist (7.4), because the Unit 7 essays ask for them too. This section adds what the Unit 8 essays need beyond them: the named externalities, whether a solution is equitable, controlling a dominant firm, direct provision, nationalisation and privatisation, and government failure.
The 5 past-paper questions on this section
9708/42/F/M/26The fashion industry employs around 75 million workers, many of whom earn very low wages and work up to 16 hours a day. The industry contributes to 20% of global wastewater and 8% of all carbon emissions. 60% of clothes are made from plastics, 83 million tonnes of the 100 billion garments produced are sent to landfill, and only 20% are collected for recycling. Consider to what extent an equitable solution can be found for market failures in the fashion industry.[20]
9708/41/O/N/25Market failure is to blame for climate change and the inefficient allocation of resources. The only solution is for governments to intervene to improve resource allocation. Assess the extent to which you agree with this statement.[20]
9708/42/O/N/25Traffic congestion is a cause of allocative inefficiency. Evaluate, with the help of diagram(s) two policies that a government may introduce to reduce the problem of allocative inefficiency caused by traffic congestion.[20]
9708/43/O/N/21Analyse the reasons why it might be thought necessary for a government to control dominant firms in an industry and consider the methods it might use to achieve such control.[25]
9708/42/O/N/21Discuss whether market failure can be successfully eliminated by governments.[25]
No essay in the bank is set on 8.2 directly. You still need it: the wage-differential essays in 8.3 ask whether pay gaps are unjust or can be justified, which is a question about equity rather than equality, and some policies in 8.1 that improve efficiency fall hardest on low-income households.
More Paper 4 essays are set on this section than on any other. Nearly every one asks how far marginal revenue product theory explains wages, so learn the competitive model first, then the three things that change its outcome (monopsony, trade unions and government), then wage differentials and the limits of the theory.
The 29 past-paper questions on this section
9708/42/F/M/26Training workers improves their human capital and increases productivity. This benefits the workers, their employers and the government. Consider the extent to which training should be paid for only by workers.[20]
9708/42/M/J/26Governments and trade unions should be excluded from taking part in wage negotiations as their intervention always causes higher levels of unemployment. With the help of a diagram(s), evaluate this statement.[20]
9708/44/M/J/25Evaluate whether the marginal revenue product theory (MRP) always explains the differences in wages.[20]
9708/42/M/J/25With the help of a diagram, assess whether the impact of an increase in labour productivity on the wages and employment of a firm is likely to be greater in a perfectly competitive labour market than in an imperfectly competitive labour market.[20]
9708/42/F/M/25With the help of a diagram, evaluate the consequences of imposing an effective minimum wage on the employment level and the wage level in a monopsony labour market.[20]
9708/42/O/N/25The average wage of chief executives in large companies in a country is over 100 times greater than the average wage of their employees. Assess how economic theory can account for this variation in average wages.[20]
9708/43/O/N/25With the help of a diagram, assess the importance of the supply of labour in relation to the wage and employment levels for firms operating in perfectly competitive and monopsony labour markets.[20]
9708/43/O/N/24Wages in a perfectly competitive labour market will always be higher than wages in a monopsony labour market. With the help of a diagram, evaluate this statement.[20]
9708/42/F/M/24The introduction of a trade union into a perfectly competitive labour market will always lead to higher wage levels and a higher level of unemployment. With the help of a diagram, evaluate this statement.[20]
9708/42/O/N/22Discuss the extent to which the marginal revenue product theory can be used to explain the determination of wages.[25]
9708/42/M/J/22The best outcome for labour markets is that the forces of supply and demand are left to determine wages without government interference. Discuss with the use of diagrams, whether this statement is always true.[25]
9708/42/M/J/21Evaluate whether the theory of wage determination can account for wage differentials (i) between a director and a general worker in the same company and (ii) between two workers doing the same job in different companies.[25]
9708/41/M/J/21'Wage differentials can be explained by economic theory. They are a sign of the power of a firm to exploit its workforce and are unjust.' Do you agree with this view?[25]
9708/41/M/J/21'Wage differentials can be explained by economic theory. They are a sign of the power of a firm to exploit its workforce and are unjust.' Do you agree with this view?[25]
9708/43/O/N/20Marginal revenue productivity theory analyses why wage rates differ in imperfect markets. Explain this analysis using a diagram and consider if a trade union negotiated a higher wage than determined by the market, whether the outcome would necessarily be the same as that in perfect competition.[25]
9708/42/O/N/20The wages of the Chief Executive Officers (CEO) of the six largest banks in the United States (US) were reported to be between 250 and 360 times the average wage of the workers in those banks. The six CEOs were all male. Discuss the extent to which economic theory can account for these variations in wages.[25]
9708/41/M/J/20After negotiation, the workers in an industry obtained from employers higher wage rates. The employers' spokesperson said 'the cost of the deal would have to be met through improved productivity or by reductions in other costs'. Analyse whether this deal can be incorporated into the economic theory of wages and consider the possible outcome for employment of such a deal.[25]
9708/43/O/N/19Analyse and discuss whether the economic theory of wages can explain why there are inequalities in wage rates in a country.[25]
9708/41/M/J/19'A rise in wages and salaries will increase the costs of production, decrease profits, cause inflation and is detrimental.' Discuss whether the economic theory of wage determination supports the view that an increase in the level of wage rates is detrimental for the firm and for the worker.[25]
9708/43/O/N/18Discuss how economic theory analyses wage rate determination. Consider if the theory can be used to explain the fact that the highest pay is often given for the work that is most agreeable while those occupations that are most unpleasant, such as rubbish collection, receive low pay.[25]
9708/42/O/N/18Consider whether wages are only determined by the market forces of supply and demand.[25]
9708/41/M/J/18Trade unions, minimum wage legislation and large powerful businesses invalidate the conclusions of the traditional economic theory of wage determination. The theory needs to be replaced. How far do you agree with this assertion?[25]
9708/43/O/N/17The French film industry is subsidised by the government. Some actors receive very high fees. In 2015 it was proposed that, as part of the fee is public money, some of the subsidy should be withdrawn. Discuss what might happen to employment and wages if a subsidy for production were reduced. Use the economic theory of wage determination in perfect and imperfect labour markets to support your answer.[25]
9708/42/O/N/17The merit of the economic theory of wage determination is that it clearly shows what the best level of wage rates should be and thus is evidence that there is no need for either the government or trades unions to fix wages. Discuss this assertion.[25]
9708/43/M/J/17Analyse the difference shown by marginal revenue productivity theory between wage determination in perfect and imperfect labour markets. Discuss the proposition that, in imperfect markets, a trade union can only increase the wage rate by allowing a reduction in employment.[25]
9708/41/M/J/17Economic theory produces a precise equilibrium outcome, often in an idealised market situation, but in reality things are much less certain. Discuss whether this opinion can be applied to the determination of wage rates.[25]
9708/42/F/M/17A politician remarked that the absence of trades unions would necessarily lead to an improvement in all labour markets. To what extent does economic analysis support this remark?[25]
9708/41/O/N/16In 2014, the average monthly salary in South Africa for an executive business manager in the private sector was 60000 rand; for a public sector nurse, 13700 rand; for a cleaner, 3600 rand. These differences in wage rates can be entirely explained by the economic theory of the labour market. Discuss whether you agree with this conclusion.[25]
9708/41/M/J/16'Wage rate inequalities are inevitable and can be justified' Discuss whether this statement can be supported by economic theory.[25]
These work across the whole unit. Since 2023, six of the twenty marks on a Paper 4 essay are for evaluation, and most of them come from one of these moves applied to the market or policy in the question.
Model chains and evaluation points for each item are being added. Until then, check yourself against the chapter notes and the mark scheme for each question.
This is a free, unofficial Cambridge 9708 Economics revision resource and is not affiliated with Cambridge Assessment International Education.