lOMoARcPSD|3111580

Exam of labor economics

Labor economics (Addis Ababa University)

StuDocu is not sponsored or endorsed by any college or university

Downloaded by samuel Girma (samuelgirma398@gmail.com)
 lOMoARcPSD|3111580

Part I: True or False: Write true if the statement is correct and false if it is incorrect.
1. The supply decisions of product markets are more complex than the supply concept which
applies to workers.F
2. The old study of labor economics was highly application of micro and macro theory. F
3. The demand for resources in general is a derived demand. T
4. An increase in the wage rate decrease hours of leisure if the substitution effect dominate the income
effect. T
5. Backward-bending individual labor supply curve result because of dominance of substitution effects
at lower wages and that income effects at higher wages.T
6. The sign of the labor supply elasticity is positive when substitution effects dominate income effects.T
Part II. Choose the best answer and the letter of your choice on the space provided.
1. Which one of the following is not concern of Labor Economics?
A. It deals with behavior of employers and employees
B. It examines the organization, functioning and outcomes of labor markets
C. It is the study of the workings and outcomes of the market for labor.
D. None of the above
2. Which of the following is not non pecuniary factor that impact labor market?
A. Arduousness (difficulty) of the work C. The price paid for labor
B. Jobs health and safety features D. Opportunity for training and advancement
3. The economically active population is classified as
A. Paid employment and self employment C. Currently active and not active population
B. Employed and unemployed D. All of the above
4. Among a key actors in labor market, the one which set the ground for rules that guide exchange in the
labor market is
A. Government B. Firms C. Workers D. All of the above
5. According to the additional worker hypothesis.
A. Participation rate tend to decline during periods of economic prosperity
B. Participation rate tend to increase during period of recession
C. Participation rate tend to decline during periods of recession
D. All except C
6. When the unearned income changes:
A. Hours of work could remain constant if leisure is a normal good
B. Hours of work could increase if leisure is a normal good
C. Hours of work could decrease if leisure is an inferior good
D. None of the above
7. Without work, currently available for work (in paid or self employment) refers to
A. Definition of employment C. Modern definition of Unemployment
B. Standard definition of Unemployment D. Population not currently active
8. Those labor force with work attachment to an enterprise but temporary not at work during
reference period are
A. Wage employment C. Unemployed
B. Self-employed D. In paid employment
9. Among the following individuals who have highest labor participation rate
A. Mrs Gonfa who lives in lives in rural part of West Shoa Zone with his wife and two childrens
B. Ms Bontu who lives in rural part of West shoa Zone with her mother.
C. Ms Chaltu who lives in Ambo town with her mother.
D. Mr Eebba who is graduating class Economics student at Ambo University
10. All are factors accounting for high participation rate among youth in developing countries
except one
A. The subsistence economy C. Absence or non implimentarity of child protective laws

Downloaded by samuel Girma (samuelgirma398@gmail.com)

 lOMoARcPSD|3111580

B. Dominancy of self employment, D. High level development of social infrastructure

11. Which one of the following sentence is true
A. Indifference curve of Mr Dhaba is flat which implies he is leisure lover
B. Indifference curve of Mrs Ararse is steep, which implies she is work lover
C. Indifference curve of Mr Elias is flat which implies he is not participating labor
D. Indifference curve of Ms Lalise is steep which implies she is leisure lover
12. Which one of the following is not independent of how many hours Mr Nabon works?
A. His property income C. His labor earning
B. His lottery prizes D. His dividends
13. Which of the following changes in non-labor income may shift an individual’s labor supply curve to
the right?
A. Receiving a large inheritance C. Qualifying for a pension
B. An improvement in working conditions D. Lack of child care
14. The standard workday legislation causes the over employment of some workers who engage in one of
the following activities except one
A. Look for over-time work C. Increased absenteeism,
B. Deteriorating the quality of production, D. Slow on their work
15. The optimal consumption of goods and leisure for the worker, is given by
A. Tangency of budget line to the indifference curve
B. The equality of slope of the indifference curve to the slope of the budget line
C. The marginal rate of substitution of consumption goods for leisure equals wage rate
D. All of the above

Downloaded by samuel Girma (samuelgirma398@gmail.com)