Question 1

Table 28-6  
-Refer to Table 28-6. What is the U-1 measure of labor underutilization?

Accepted Answer

A) 1.6% 
B) 3.1% 
C) 6.2% 
D) 7.0% 
A) 1.6% 
B) 3.1% 
C) 6.2% 
D) 7.0%

Question 2

Which of the following do unions not cause?

Accepted Answer

A) frictional unemployment 
B) the wage to rise above the equilibrium level 
C) conflict between insiders who benefit from high union wages and outsiders who do not get the union jobs 
D) reduced wages in industries without unions 
A) frictional unemployment 
B) the wage to rise above the equilibrium level 
C) conflict between insiders who benefit from high union wages and outsiders who do not get the union jobs 
D) reduced wages in industries without unions

Question 3

According to 2014 data on the U.S. population, which of the following was correct?

Accepted Answer

A) Adults of prime working age (ages 25-54) had both higher labor-force participation rates and higher rates of unemployment compared to teenagers. 
B) Adults of prime working age (ages 25-54) had higher labor-force participation rates and lower rates of unemployment compared to teenagers. 
C) Adults of prime working age (ages 25-54) had both lower labor-force participation rates and lower rates of unemployment compared to teenagers. 
D) Adults of prime working age (ages 25-54) had lower labor-force participation rates and higher rates of unemployment compared to teenagers. 
A) Adults of prime working age (ages 25-54) had both higher labor-force participation rates and higher rates of unemployment compared to teenagers. 
B) Adults of prime working age (ages 25-54) had higher labor-force participation rates and lower rates of unemployment compared to teenagers. 
C) Adults of prime working age (ages 25-54) had both lower labor-force participation rates and lower rates of unemployment compared to teenagers. 
D) Adults of prime working age (ages 25-54) had lower labor-force participation rates and higher rates of unemployment compared to teenagers.

Question 4

A firm might offer efficiency wages in order to attract a better pool of applicants.

Accepted Answer

A) True 
 B)False

Question 5

If a union raises the wage in its industry above equilibrium, then there is an increase in

Accepted Answer

A) structural unemployment which is part of cyclical unemployment. 
B) structural unemployment which is part of the natural rate of unemployment. 
C) frictional unemployment which is part of cyclical unemployment. 
D) frictional unemployment which is part of the natural rate of unemployment. 
A) structural unemployment which is part of cyclical unemployment. 
B) structural unemployment which is part of the natural rate of unemployment. 
C) frictional unemployment which is part of cyclical unemployment. 
D) frictional unemployment which is part of the natural rate of unemployment.

Question 6

To be counted as "employed" in the U.S. labor force statistics, a person

Accepted Answer

A) must be working for pay and be working full time. 
B) must be working for pay but does not have to be working full time. 
C) does not have to be working for pay if they are working for a family business but must be employed full time. 
D) does not have to be working for pay if they are working for a family business and does not have to be working full time 
A) must be working for pay and be working full time. 
B) must be working for pay but does not have to be working full time. 
C) does not have to be working for pay if they are working for a family business but must be employed full time. 
D) does not have to be working for pay if they are working for a family business and does not have to be working full time

Question 7

Paying efficiency wages means that wages are

Accepted Answer

A) above equilibrium, and profits are higher than otherwise. 
B) above equilibrium, and profits are lower than otherwise. 
C) below equilibrium, and profits are higher than otherwise. 
D) below equilibrium, and profits are lower than otherwise. 
A) above equilibrium, and profits are higher than otherwise. 
B) above equilibrium, and profits are lower than otherwise. 
C) below equilibrium, and profits are higher than otherwise. 
D) below equilibrium, and profits are lower than otherwise.

Question 8

Which of the following is correct?

Accepted Answer

A) Typically more than one-third of the unemployed are new entrants into the job market. 
B) Most spells of unemployment are short. 
C) Most unemployment observed at any time is long term. 
D) All of the above are correct. 
A) Typically more than one-third of the unemployed are new entrants into the job market. 
B) Most spells of unemployment are short. 
C) Most unemployment observed at any time is long term. 
D) All of the above are correct.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Sectoral shifts contribute to frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 11

Most spells of unemployment are long, and most unemployment observed at any given time is long-term.

Accepted Answer

A) True 
 B)False

Question 12

Ariana is the CEO of a corporation that hires nonunion labor. According to the theory of efficiency wages, if she decides to pay her workers more than the competitive equilibrium wage, then

Accepted Answer

A) the profits of her firm might increase. 
B) she will face a shortage of labor. 
C) the turnover of her workers may increase. 
D) None of the above is correct. 
A) the profits of her firm might increase. 
B) she will face a shortage of labor. 
C) the turnover of her workers may increase. 
D) None of the above is correct.

Question 13

Which of the following is not correct?

Accepted Answer

A) A union is a worker association that bargains with employers over wages, benefits, and working conditions. 
B) Unions play a much larger role in the U.S. labor market now than they did in the past. 
C) Unions play a large role in many European countries. 
D) A union is a type of cartel. 
A) A union is a worker association that bargains with employers over wages, benefits, and working conditions. 
B) Unions play a much larger role in the U.S. labor market now than they did in the past. 
C) Unions play a large role in many European countries. 
D) A union is a type of cartel.

Question 14

Both full-time and part-time workers are included in the Bureau of Labor Statistics' "employed" category.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not correct?

Accepted Answer

A) When a union is present in a labor market, wages are determined by the equilibrium of supply and demand. 
B) Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power. 
C) The process by which unions and firms agree on the terms of employment is called collective bargaining. 
D) Most workers in the U.S. economy are not members of a union. 
A) When a union is present in a labor market, wages are determined by the equilibrium of supply and demand. 
B) Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power. 
C) The process by which unions and firms agree on the terms of employment is called collective bargaining. 
D) Most workers in the U.S. economy are not members of a union.

Question 16

Most job search in the U.S. economy takes place without intervention by the government.

Accepted Answer

A) True 
 B)False

Question 17

Figure 28-3  
-Refer to Figure 28-3. If the government imposes a minimum wage of $4, then unemployment will increase by

Accepted Answer

A) 0 workers. 
B) 2,000 workers. 
C) 4,000 workers. 
D) 5,000 workers. 
A) 0 workers. 
B) 2,000 workers. 
C) 4,000 workers. 
D) 5,000 workers.

Question 18

When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

Accepted Answer

A) True 
 B)False

Question 19

Figure 28-5  
-Refer to Figure 28-5. If the minimum wage is set at $125, then

Accepted Answer

A) the quantity of labor demanded will equal 20. 
B) the quantity of labor supplied will equal 35. 
C) the surplus of labor will equal 25. 
D) unemployment will equal 10. 
A) the quantity of labor demanded will equal 20. 
B) the quantity of labor supplied will equal 35. 
C) the surplus of labor will equal 25. 
D) unemployment will equal 10.

Question 20

Which of the following is an explanation for the existence of frictional unemployment?

Accepted Answer

A) efficiency wages 
B) minimum-wage laws 
C) unions 
D) job search 
A) efficiency wages 
B) minimum-wage laws 
C) unions 
D) job search

Exam 28: Unemployment and Its Natural Rate

Table 28-6 -Refer to Table 28-6. What is the U-1 measure of labor underutilization?

Which of the following do unions not cause?

According to 2014 data on the U.S. population, which of the following was correct?

A firm might offer efficiency wages in order to attract a better pool of applicants.

If a union raises the wage in its industry above equilibrium, then there is an increase in

To be counted as "employed" in the U.S. labor force statistics, a person

Paying efficiency wages means that wages are

Which of the following is correct?

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

Sectoral shifts contribute to frictional unemployment.

Most spells of unemployment are long, and most unemployment observed at any given time is long-term.

Ariana is the CEO of a corporation that hires nonunion labor. According to the theory of efficiency wages, if she decides to pay her workers more than the competitive equilibrium wage, then

Which of the following is not correct?

Both full-time and part-time workers are included in the Bureau of Labor Statistics' "employed" category.

Which of the following is not correct?

Most job search in the U.S. economy takes place without intervention by the government.

Figure 28-3 -Refer to Figure 28-3. If the government imposes a minimum wage of $4, then unemployment will increase by

When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

Figure 28-5 -Refer to Figure 28-5. If the minimum wage is set at $125, then

Which of the following is an explanation for the existence of frictional unemployment?

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

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