IGCSE Business Studies Paper-1: Specimen Questions with Answers 9 - 10 of 14

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Passage

Hari Joshi runs a textile manufacturing business. He pays his workers a high hourly wage rate. He is thinking of introducing a piece rate element but with a lower hourly wage rate. He is not sure whether such a change would benefit either his business or his employees.

Question 9 (1 of 2 Based on Passage)

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Short Answer▾

Explain what is meant by a ‘high hourly wage rate’

Explanation

The term hourly wage rate describes a rate an employer agrees to pay a worker per hour.

Say for example, if a person is to be paid 100/- per hour and he worked for 4 hours than at the end of the day he would be provided with 400/-.

Question 10 (2 of 2 Based on Passage)

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Do you think that the introduction of a piece rate element will benefit the following? Explain your answers.

(1) His employees:

(2) Mr Joshi՚s business:

Explanation

  1. His employees:- Piece rate element actually means payment by results i.e.. the employee is paid for each unit of production at a fixed rate. Wage here is determined by the result and accordingly the amount is predefined and paid. Thereby the employees who works hard are benefited as they get wages according to how they work and no benefits will be given to the employees who simply used to sit for hours for making wages.
  2. Mr Joshi՚s business:- Mr. Joshi՚s business would definitely be benefited by this new policy as the workers would intend to work hard to get more wages and the workers who previously used to just sit for hours would as well work as no wages would be provided until and unless results comes out.

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