Question 1

According to the theory of efficiency wages, firms operate more efficiently if wages are above the equilibrium level.

Accepted Answer

A) True 
 B)False  True

Question 2

More than one-third of the unemployed are recent entrants into the labor force.

Accepted Answer

A) True 
 B)False  True

Question 3

Figure 28-4
​  
-Refer to Figure 28-4. If 12,000 workers are unemployed, then the minimum wage must be

Accepted Answer

A) $4. 
B) $6. 
C) $14 
D) $16. 
A) $4. 
B) $6. 
C) $14 
D) $16. D

Question 4

Unions

Accepted Answer

A) do not affect the natural rate of unemployment. 
B) lower the wages of unionized workers. 
C) raise the profits of unionized firms. 
D) lower the wages of workers in industries without unions. 
A) do not affect the natural rate of unemployment. 
B) lower the wages of unionized workers. 
C) raise the profits of unionized firms. 
D) lower the wages of workers in industries without unions.

Question 5

Figure 28-2  
-Refer to Figure 28-2. What do the two lines in the figure measure?

Accepted Answer

A) The top line is the labor force participation rate, and the bottom line is the unemployment rate. 
B) The top line is the labor force participation rates of the college-educated population, and bottom line is the labor force participation rates of the high-school-educated population. 
C) The top line is the foreign labor force participation rate, and the bottom line is the domestic labor force participation rate. 
D) The top line is the labor force participation rates of men, and the bottom line is the labor force participation rates of women. 
A) The top line is the labor force participation rate, and the bottom line is the unemployment rate. 
B) The top line is the labor force participation rates of the college-educated population, and bottom line is the labor force participation rates of the high-school-educated population. 
C) The top line is the foreign labor force participation rate, and the bottom line is the domestic labor force participation rate. 
D) The top line is the labor force participation rates of men, and the bottom line is the labor force participation rates of women.

Question 6

When a minimum-wage law forces the wage to remain above the equilibrium level, the result is

Accepted Answer

A) both a shortage of labor and a shortage of jobs. 
B) a shortage of labor and a surplus of jobs. 
C) a surplus of labor and a shortage of jobs. 
D) both surplus of labor and a surplus of jobs. 
A) both a shortage of labor and a shortage of jobs. 
B) a shortage of labor and a surplus of jobs. 
C) a surplus of labor and a shortage of jobs. 
D) both surplus of labor and a surplus of jobs.

Question 7

Which of the following is correct?

Accepted Answer

A) In unionized industries, wages are below the level that would prevail in competitive markets. 
B) The introduction of a union in an industry reduces the quantity of labor demanded in that industry, causes some workers in that industry to be unemployed, and reduces wages in the rest of the economy. 
C) There is a strong consensus among economists that unions are bad for the U.S. economy. 
D) All of the above are correct. 
A) In unionized industries, wages are below the level that would prevail in competitive markets. 
B) The introduction of a union in an industry reduces the quantity of labor demanded in that industry, causes some workers in that industry to be unemployed, and reduces wages in the rest of the economy. 
C) There is a strong consensus among economists that unions are bad for the U.S. economy. 
D) All of the above are correct.

Question 8

Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job. She is going to tour around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate

Accepted Answer

A) increases, and the labor-force participation rate decreases. 
B) and the labor-force participation rate both increase. 
C) increases, and the labor-force participation rate is unaffected. 
D) and the labor-force participation rate are both unaffected. 
A) increases, and the labor-force participation rate decreases. 
B) and the labor-force participation rate both increase. 
C) increases, and the labor-force participation rate is unaffected. 
D) and the labor-force participation rate are both unaffected.

Question 9

The unemployment rate equals the percentage of the labor force that is unemployed.

Accepted Answer

A) True 
 B)False

Question 10

Table 28-11
2015 Labor Data for Tajnia  
-Refer to Table 28-11. The labor-force participation rate of Tajnia in 2015 is about 40.8 percent.

Accepted Answer

A) True 
 B)False

Question 11

Table 28-2
Labor Data for Aridia  
-Refer to Table 28-2. The unemployment rate of Aridia in 2011 was

Accepted Answer

A) 20%. 
B) 31.6%. 
C) 46.2%. 
D) 63.3%. 
A) 20%. 
B) 31.6%. 
C) 46.2%. 
D) 63.3%.

Question 12

Suppose that efficiency wages become more common in the economy. Imposing efficiency wages

Accepted Answer

A) increases the quantity demanded and decreases the quantity supplied of labor. 
B) decreases the quantity demanded and increases the quantity supplied of labor. 
C) decreases the quantity demanded and decreases the quantity supplied of labor. 
D) increases the quantity demanded and increases the quantity supplied of labor. 
A) increases the quantity demanded and decreases the quantity supplied of labor. 
B) decreases the quantity demanded and increases the quantity supplied of labor. 
C) decreases the quantity demanded and decreases the quantity supplied of labor. 
D) increases the quantity demanded and increases the quantity supplied of labor.

Question 13

Which of the following is not an explanation for the existence of unemployment in the long run?

Accepted Answer

A) it takes time for workers to search for the jobs that are best suited for them 
B) minimum-wage laws 
C) unions 
D) the business cycle 
A) it takes time for workers to search for the jobs that are best suited for them 
B) minimum-wage laws 
C) unions 
D) the business cycle

Question 14

Table 28-11
2015 Labor Data for Tajnia  
-Refer to Table 28-11. The unemployment rate of Tajnia in 2015 is about 18.4 percent.

Accepted Answer

A) True 
 B)False

Question 15

Unemployment insurance

Accepted Answer

A) reduces search effort which raises unemployment. 
B) reduces search effort which lowers unemployment. 
C) increases search effort which raises unemployment. 
D) increases search effort which decreases unemployment. 
A) reduces search effort which raises unemployment. 
B) reduces search effort which lowers unemployment. 
C) increases search effort which raises unemployment. 
D) increases search effort which decreases unemployment.

Question 16

Minimum-wage laws

Accepted Answer

A) create unemployment. 
B) do not apply in states with right-to-work laws. 
C) affect highly-educated workers more than high school dropouts. 
D) cause labor shortages, which further raise wages above equilibrium. 
A) create unemployment. 
B) do not apply in states with right-to-work laws. 
C) affect highly-educated workers more than high school dropouts. 
D) cause labor shortages, which further raise wages above equilibrium.

Question 17

Within the U.S. population, blacks of prime working age (ages 25-54) have higher rates of unemployment than whites of prime working age (ages 25-54), regardless of gender.

Accepted Answer

A) True 
 B)False

Question 18

Table 28-1
Sample Population  
-Refer to Table 28-1. How many in the sample are in the labor force?

Accepted Answer

A) 11 
B) 10 
C) 9 
D) 8 
A) 11 
B) 10 
C) 9 
D) 8

Question 19

If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is

Accepted Answer

A) cyclical unemployment amounting to 0.5 percent of the labor force. 
B) frictional unemployment amounting to 0.5 percent of the labor force. 
C) structural unemployment amounting to 0.5 percent of the labor force. 
D) search unemployment amounting to 0.5 percent of the labor force. 
A) cyclical unemployment amounting to 0.5 percent of the labor force. 
B) frictional unemployment amounting to 0.5 percent of the labor force. 
C) structural unemployment amounting to 0.5 percent of the labor force. 
D) search unemployment amounting to 0.5 percent of the labor force.

Question 20

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Accepted Answer

A) True 
 B)False

Exam 28: Unemployment and Its Natural Rate

According to the theory of efficiency wages, firms operate more efficiently if wages are above the equilibrium level.

More than one-third of the unemployed are recent entrants into the labor force.

Figure 28-4 ​ -Refer to Figure 28-4. If 12,000 workers are unemployed, then the minimum wage must be

Unions

Figure 28-2 -Refer to Figure 28-2. What do the two lines in the figure measure?

When a minimum-wage law forces the wage to remain above the equilibrium level, the result is

Which of the following is correct?

Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job. She is going to tour around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate

The unemployment rate equals the percentage of the labor force that is unemployed.

Table 28-11 2015 Labor Data for Tajnia -Refer to Table 28-11. The labor-force participation rate of Tajnia in 2015 is about 40.8 percent.

Table 28-2 Labor Data for Aridia -Refer to Table 28-2. The unemployment rate of Aridia in 2011 was

Suppose that efficiency wages become more common in the economy. Imposing efficiency wages

Which of the following is not an explanation for the existence of unemployment in the long run?

Table 28-11 2015 Labor Data for Tajnia -Refer to Table 28-11. The unemployment rate of Tajnia in 2015 is about 18.4 percent.

Unemployment insurance

Minimum-wage laws

Within the U.S. population, blacks of prime working age (ages 25-54) have higher rates of unemployment than whites of prime working age (ages 25-54), regardless of gender.

Table 28-1 Sample Population -Refer to Table 28-1. How many in the sample are in the labor force?

If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Figure 28-4 -Refer to Figure 28-4. If 12,000 workers are unemployed, then the minimum wage must be