Workers: four questions to try now
Real past-paper questions, the answer key from the mark scheme, and the explanation that goes with it. No account needed to answer them.
Question 1
A government decides to increase tax revenues from consumer expenditure. Which tax will it increase?
Answer: D.
The correct answer is D: value added tax.
The government wants more revenue from consumer expenditure, so it needs a tax levied on spending. Value added tax is exactly that: an indirect tax charged on the sale of goods and services, collected by firms and passed to the government. Raising the VAT rate increases the revenue taken from every taxable purchase.
Why the other options are wrong:
The government wants more revenue from consumer expenditure, so it needs a tax levied on spending. Value added tax is exactly that: an indirect tax charged on the sale of goods and services, collected by firms and passed to the government. Raising the VAT rate increases the revenue taken from every taxable purchase.
Why the other options are wrong:
- C, profits tax, is levied on firms' earnings, not on consumer spending. Corporation tax revenue depends on profitability, which is a different base.
- A, capital gains tax, is charged on the increase in value of assets when they are sold, shares, property, businesses. It taxes wealth accumulation, not consumption.
- B, death duties, is levied on estates when someone dies. Again a tax on wealth rather than on spending.
Question 2
Why might measures to reduce unemployment also make inflation rise?
Answer: B.
The correct answer is B: they increase demand.
Measures to reduce unemployment usually work by raising aggregate demand: higher government spending, tax cuts, lower interest rates. Firms facing more orders take on more workers, which is the intended effect. But as the economy approaches full capacity, spare resources run short: firms compete for a shrinking pool of available workers and bid wages up, and because output cannot easily expand further, the extra demand shows up in prices rather than in real output. Lower unemployment is therefore bought at the cost of higher inflation, the short-run Phillips curve trade-off.
Why the other options are wrong:
Measures to reduce unemployment usually work by raising aggregate demand: higher government spending, tax cuts, lower interest rates. Firms facing more orders take on more workers, which is the intended effect. But as the economy approaches full capacity, spare resources run short: firms compete for a shrinking pool of available workers and bid wages up, and because output cannot easily expand further, the extra demand shows up in prices rather than in real output. Lower unemployment is therefore bought at the cost of higher inflation, the short-run Phillips curve trade-off.
Why the other options are wrong:
- C, reducing firms' costs, would lower inflation. Falling costs shift aggregate supply outward, allowing more output at a lower price level, which is precisely why supply-side policies can reduce unemployment without inflationary cost.
- D, requiring wages to fall, would also reduce inflation, since lower wage costs mean lower prices.
- A, encouraging cheap imports, is disinflationary too. Cheaper imported goods and raw materials hold the price level down.
Question 3
What might prevent an individual choosing a particular occupation?
Answer: A.
The correct answer is A: little opportunity for career progression.
People choose occupations on net advantage: the whole package of monetary and non-monetary rewards, less the drawbacks. Poor prospects for advancement is a genuine disadvantage: it means limited future earnings growth, less scope to use developing skills, and less job satisfaction. That would deter someone from entering the occupation.
Why the other options are attractions rather than deterrents:
People choose occupations on net advantage: the whole package of monetary and non-monetary rewards, less the drawbacks. Poor prospects for advancement is a genuine disadvantage: it means limited future earnings growth, less scope to use developing skills, and less job satisfaction. That would deter someone from entering the occupation.
Why the other options are attractions rather than deterrents:
- B, a low cost of travelling to work, reduces the effective cost of the job, so more of the wage is retained. That encourages rather than discourages.
- C, no risk to personal health, is a benefit. Dangerous work has to pay a premium to attract people, so the absence of risk makes a job more appealing at any given wage.
- D, a wage rate above the national minimum wage, is better pay than the legal floor requires, again an attraction.
Question 4
A musician has a choice of playing for an orchestra in either Germany or England. Which combination of incomes and cost of living is most likely to cause her to choose the German orchestra? incomes and cost of living in Germany compared with those in England pre-tax (gross) income after-tax (net) income cost of living
Answer: D.
The correct answer is D: lower pre-tax income, higher after-tax income, lower cost of living.
What matters to the musician is her real net income: what she actually keeps after tax, measured against what it will buy where she lives. Two of the three figures decide it, and in D both favour Germany.
Higher after-tax income means she keeps more, whatever the headline salary. Germany's gross pay being lower is irrelevant once tax is accounted for: net income is what reaches her pocket.
Lower cost of living means that larger net income buys more. Real purchasing power is net income adjusted for prices, so a lower cost of living magnifies the advantage.
Why the other options are wrong:
What matters to the musician is her real net income: what she actually keeps after tax, measured against what it will buy where she lives. Two of the three figures decide it, and in D both favour Germany.
Higher after-tax income means she keeps more, whatever the headline salary. Germany's gross pay being lower is irrelevant once tax is accounted for: net income is what reaches her pocket.
Lower cost of living means that larger net income buys more. Real purchasing power is net income adjusted for prices, so a lower cost of living magnifies the advantage.
Why the other options are wrong:
- A has a higher after-tax income but a higher cost of living, so the two effects offset and the real gain is uncertain.
- B has a lower after-tax income. The lower cost of living helps, but she is keeping less, so the outcome is ambiguous.
- C has a higher after-tax income but a higher cost of living, the same ambiguity as A.
What this practice covers
These questions are drawn from past Cambridge IGCSE papers and filtered to workers. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
What examiners see students get wrong here
These are the errors that cost marks on workers, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Saying a job pays well simply because it is "important". Nurses and teachers are important and not always well paid, what matters is supply and demand.
- Explaining only demand, or only supply. The wage is set by both.
- Forgetting that demand for labour is derived from demand for the product.
- Ignoring non-wage factors, which explain why some pleasant jobs pay less.
- Treating all low pay as discrimination without considering supply.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Workers revision notes.