ECS2604
Labour Economics
Comprehensive Exam Review
Q&A
2024
,1. Multiple Choice: What is the primary focus of the Labour Force Survey
(LFS) in South Africa?
a) Measuring unemployment rates
b) Assessing agricultural output
c) Evaluating educational attainment
d) Monitoring health indicators
Correct Answer: a) Measuring unemployment rates
Rationale: The LFS is a household-based sample survey conducted
regularly to collect data on the labour market activities of individuals aged
15 years and older. It primarily measures employment and unemployment
rates, providing essential data for labour economics.
2. True/False: The concept of 'efficiency wages' suggests that paying workers
above the market equilibrium can lead to increased productivity.
Answer: True
Rationale: Efficiency wage theory posits that higher wages can enhance
worker productivity by attracting better applicants, reducing turnover, and
increasing worker effort.
3. Fill-in-the-Blank: The ___________ model explains the cyclical nature of
employment and wages based on supply and demand for labour.
Correct Answer: Cobweb
Rationale: The Cobweb model illustrates how adjustments in labour
supply and demand can lead to periodic fluctuations in employment and
wages over time.
, 4. Multiple Choice: Which of the following is not a component of the
Human Capital Theory?
a) Education
b) Training
c) Health
d) Inheritance
Correct Answer: d) Inheritance
Rationale: Human Capital Theory emphasizes investments in education,
training, and health as means of increasing productivity and earnings.
Inheritance, while it may affect an individual's wealth, is not considered a
component of human capital.
5. True/False: The 'reservation wage' is the lowest wage rate at which a
worker would be willing to accept a particular type of job.
Answer: True
Rationale: The reservation wage represents the minimum wage a worker
requires before they will enter the labour market for a specific job,
reflecting their personal valuation of leisure versus labour.
6. Fill-in-the-Blank: ___________ unemployment occurs when there is a
mismatch between the skills of the unemployed and the requirements of
available jobs.
Correct Answer: Structural
Labour Economics
Comprehensive Exam Review
Q&A
2024
,1. Multiple Choice: What is the primary focus of the Labour Force Survey
(LFS) in South Africa?
a) Measuring unemployment rates
b) Assessing agricultural output
c) Evaluating educational attainment
d) Monitoring health indicators
Correct Answer: a) Measuring unemployment rates
Rationale: The LFS is a household-based sample survey conducted
regularly to collect data on the labour market activities of individuals aged
15 years and older. It primarily measures employment and unemployment
rates, providing essential data for labour economics.
2. True/False: The concept of 'efficiency wages' suggests that paying workers
above the market equilibrium can lead to increased productivity.
Answer: True
Rationale: Efficiency wage theory posits that higher wages can enhance
worker productivity by attracting better applicants, reducing turnover, and
increasing worker effort.
3. Fill-in-the-Blank: The ___________ model explains the cyclical nature of
employment and wages based on supply and demand for labour.
Correct Answer: Cobweb
Rationale: The Cobweb model illustrates how adjustments in labour
supply and demand can lead to periodic fluctuations in employment and
wages over time.
, 4. Multiple Choice: Which of the following is not a component of the
Human Capital Theory?
a) Education
b) Training
c) Health
d) Inheritance
Correct Answer: d) Inheritance
Rationale: Human Capital Theory emphasizes investments in education,
training, and health as means of increasing productivity and earnings.
Inheritance, while it may affect an individual's wealth, is not considered a
component of human capital.
5. True/False: The 'reservation wage' is the lowest wage rate at which a
worker would be willing to accept a particular type of job.
Answer: True
Rationale: The reservation wage represents the minimum wage a worker
requires before they will enter the labour market for a specific job,
reflecting their personal valuation of leisure versus labour.
6. Fill-in-the-Blank: ___________ unemployment occurs when there is a
mismatch between the skills of the unemployed and the requirements of
available jobs.
Correct Answer: Structural
