ECS2604
EXAM PACK
,ECS2604 May/June 2025
LABOUR ECONOMICS
EXAM ANSWERS
SECTION A: Multiple-Choice Questions
1.1
Answer: [3] Labour unions
Explanation: Labour unions can affect the operation of market forces by negotiating
wages, working conditions and other employment terms on behalf of workers.
1.2
Answer: [3] Collective bargaining
Explanation: Collective bargaining is the process in which representatives of
employees and employers negotiate employment-related matters and seek to reach
agreements.
1.3
Answer: [1] Bargaining power
Explanation: Bargaining power is affected not only by whether workers are organised
into unions, but also by how bargaining is structured and centralised within different
economic sectors.
1.4
Answer: [3] Unit labour costs
,Explanation: Unit labour costs measure the relationship between labour costs,
particularly wages, and labour productivity. They therefore reflect the combined effect of
wages and productivity.
1.5
Answer: [2] Quantity of output/quantity of input
Explanation: Productivity measures the amount of output produced from a given
amount of input. Therefore, the basic productivity formula is:
Productivity = Quantity of output ÷ Quantity of input
1.6
Answer: [4] 10; 20
Explanation: Labour productivity is calculated as:
Labour productivity = Output ÷ Labour
= 1 000 ÷ 100
= 10
Capital productivity is:
Capital productivity = Output ÷ Capital
= 1 000 ÷ 50
= 20
Therefore, the answer is 10; 20.
1.7
Answer: [2] Increases; decreases
, Explanation: Labour productivity is calculated by dividing output by the quantity of
labour.
2020: 200 ÷ 25 = 8
2021: 300 ÷ 30 = 10
2022: 400 ÷ 50 = 8
Productivity therefore increases from 2020 to 2021, but decreases from 2021 to
2022.
1.8
Answer: [3] (I), (II), and (III) are correct
Explanation: Unemployment in South Africa can be assessed using different sources
of labour-market information, including sample surveys, registration methods and
census information. Therefore, all three statements are applicable.
1.9
Answer: [3] Remained the same
Explanation: The strict unemployment rate is calculated as:
Unemployment rate = Unemployed ÷ (Employed + Unemployed) × 100
For 2023:
1 000 000 ÷ (1 000 000 + 1 000 000) × 100
= 50%
For 2024:
1 500 000 ÷ (1 500 000 + 1 500 000) × 100
= 50%
EXAM PACK
,ECS2604 May/June 2025
LABOUR ECONOMICS
EXAM ANSWERS
SECTION A: Multiple-Choice Questions
1.1
Answer: [3] Labour unions
Explanation: Labour unions can affect the operation of market forces by negotiating
wages, working conditions and other employment terms on behalf of workers.
1.2
Answer: [3] Collective bargaining
Explanation: Collective bargaining is the process in which representatives of
employees and employers negotiate employment-related matters and seek to reach
agreements.
1.3
Answer: [1] Bargaining power
Explanation: Bargaining power is affected not only by whether workers are organised
into unions, but also by how bargaining is structured and centralised within different
economic sectors.
1.4
Answer: [3] Unit labour costs
,Explanation: Unit labour costs measure the relationship between labour costs,
particularly wages, and labour productivity. They therefore reflect the combined effect of
wages and productivity.
1.5
Answer: [2] Quantity of output/quantity of input
Explanation: Productivity measures the amount of output produced from a given
amount of input. Therefore, the basic productivity formula is:
Productivity = Quantity of output ÷ Quantity of input
1.6
Answer: [4] 10; 20
Explanation: Labour productivity is calculated as:
Labour productivity = Output ÷ Labour
= 1 000 ÷ 100
= 10
Capital productivity is:
Capital productivity = Output ÷ Capital
= 1 000 ÷ 50
= 20
Therefore, the answer is 10; 20.
1.7
Answer: [2] Increases; decreases
, Explanation: Labour productivity is calculated by dividing output by the quantity of
labour.
2020: 200 ÷ 25 = 8
2021: 300 ÷ 30 = 10
2022: 400 ÷ 50 = 8
Productivity therefore increases from 2020 to 2021, but decreases from 2021 to
2022.
1.8
Answer: [3] (I), (II), and (III) are correct
Explanation: Unemployment in South Africa can be assessed using different sources
of labour-market information, including sample surveys, registration methods and
census information. Therefore, all three statements are applicable.
1.9
Answer: [3] Remained the same
Explanation: The strict unemployment rate is calculated as:
Unemployment rate = Unemployed ÷ (Employed + Unemployed) × 100
For 2023:
1 000 000 ÷ (1 000 000 + 1 000 000) × 100
= 50%
For 2024:
1 500 000 ÷ (1 500 000 + 1 500 000) × 100
= 50%
