Question 1

Frictional unemployment is inevitable because

Accepted Answer

A) sectoral shifts are always happening. 
B) there is a federal minimum-wage law in the U.S. 
C) some people do not want to be employed. 
D) unions are very popular in the U.S. 
A) sectoral shifts are always happening. 
B) there is a federal minimum-wage law in the U.S. 
C) some people do not want to be employed. 
D) unions are very popular in the U.S.

Question 2

The demand for labor by a certain firm is independent of the demand for that firm's product.

Accepted Answer

A) True 
 B)False

Question 3

In 2016 the Bureau of Labor Statistics reported that there were 57.1 million people over age 25 whose highest level of education was some college or an associate degree. Of these, 36.4 million were employed and 1.5 million were unemployed. What were the labor-force participation rate and the unemployment rate for this group?

Accepted Answer

A) 66.4% and 2.6% 
B) 66.4% and 4.0% 
C) 63.7% and 2.6% 
D) 63.7% and 4.0% 
A) 66.4% and 2.6% 
B) 66.4% and 4.0% 
C) 63.7% and 2.6% 
D) 63.7% and 4.0%

Question 4

The unemployment rate reported by the Bureau of Labor Statistics clearly understates the true unemployment rate.

Accepted Answer

A) True 
 B)False

Question 5

The Wagner Act of 1935

Accepted Answer

A) prevents unions from acting as cartels. 
B) allows workers joining a unionized firm to choose not to join the union. 
C) prevents employers from interfering when workers try to organize a union. 
D) prevents firms from hiring permanent replacements for workers who are on strike. 
A) prevents unions from acting as cartels. 
B) allows workers joining a unionized firm to choose not to join the union. 
C) prevents employers from interfering when workers try to organize a union. 
D) prevents firms from hiring permanent replacements for workers who are on strike.

Question 6

When the wage is above the equilibrium level,

Accepted Answer

A) the labor market is functioning more efficiently than it otherwise would function. 
B) there is a shortage of labor. 
C) the quantity of labor supplied exceeds the quantity of labor demanded. 
D) job search is the primary explanation for the unemployment that is observed. 
A) the labor market is functioning more efficiently than it otherwise would function. 
B) there is a shortage of labor. 
C) the quantity of labor supplied exceeds the quantity of labor demanded. 
D) job search is the primary explanation for the unemployment that is observed.

Question 7

Minimum-wage laws

Accepted Answer

A) create frictional unemployment, while firms paying wages above equilibrium to reduce worker turnover creates structural unemployment. 
B) create structural unemployment, while firms paying wages above equilibrium to reduce worker turnover creates frictional unemployment. 
C) and firms paying wages above equilibrium to reduce worker turnover both create structural unemployment. 
D) and firms paying wages above equilibrium to reduce worker turnover both create frictional unemployment. 
A) create frictional unemployment, while firms paying wages above equilibrium to reduce worker turnover creates structural unemployment. 
B) create structural unemployment, while firms paying wages above equilibrium to reduce worker turnover creates frictional unemployment. 
C) and firms paying wages above equilibrium to reduce worker turnover both create structural unemployment. 
D) and firms paying wages above equilibrium to reduce worker turnover both create frictional unemployment.

Question 8

Table 28-10
The table below lists the number of people by labor force classification for the country of Springfield.  
-Refer to Table 28-10. Calculate the U-4 unemployment rate.

Accepted Answer

The answer of Table 28-10
The table below lists the number...

Question 9

Within the U.S. population, teenagers (ages 16-19) have similar rates of unemployment to adults of prime working age (ages 25-54), regardless of race or gender.

Accepted Answer

A) True 
 B)False

Question 10

Adam is looking for a job in marketing. He has had some offers and his prospects are promising, but he has not yet accepted a job. Amanda lost her job working for Mercury Bicycles because many customers decided they prefer bicycles manufactured by Ultimate Bicycles instead. Who is frictionally unemployed?

Accepted Answer

A) Adam but not Amanda 
B) Amanda but not Adam 
C) both Adam and Amanda 
D) neither Amanda nor Adam 
A) Adam but not Amanda 
B) Amanda but not Adam 
C) both Adam and Amanda 
D) neither Amanda nor Adam

Question 11

Table 28-11
2015 Labor Data for Tajnia  
-Refer to Table 28-11. The labor force of Tajnia in 2015 is 10,000.

Accepted Answer

A) True 
 B)False

Question 12

If all workers and all jobs were the same such that all workers were equally well suited for all jobs, then job search would not be a problem.

Accepted Answer

A) True 
 B)False

Question 13

Almost nine-tenths of all spells of unemployment end when the unemployed person finds a job.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an example of an efficiency wage?

Accepted Answer

A) a high wage paid to compensate for dangerous work such as coal mining 
B) an above-equilibrium wage offered by a firm to attract a more talented pool of job applicants 
C) a wage below the minimum wage but supplemented by customer tips 
D) a high wage paid to a college graduate for a high-skill job such as electrical engineering 
A) a high wage paid to compensate for dangerous work such as coal mining 
B) an above-equilibrium wage offered by a firm to attract a more talented pool of job applicants 
C) a wage below the minimum wage but supplemented by customer tips 
D) a high wage paid to a college graduate for a high-skill job such as electrical engineering

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Briefly describe how labor unions can affect wages in non-unionized industries.

Accepted Answer

If labor unions raise wages above the eq

Question 17

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

Accepted Answer

According to the theory of efficiency wa

Question 18

One explanation for long-run unemployment is that it takes time for workers to search for the jobs that are best suited for them.

Accepted Answer

A) True 
 B)False

Question 19

The theory of efficiency wages provides a possible explanation as to why

Accepted Answer

A) workers form unions. 
B) firms should try to reduce surpluses of labor. 
C) firms may be inclined to keep their workers' wages above the equilibrium level. 
D) firms may be inclined to keep their workers' wages below the equilibrium level. 
A) workers form unions. 
B) firms should try to reduce surpluses of labor. 
C) firms may be inclined to keep their workers' wages above the equilibrium level. 
D) firms may be inclined to keep their workers' wages below the equilibrium level.

Question 20

The Bureau of Labor Statistics' U-2 measure of joblessness includes job losers and job leavers.

Accepted Answer

A) True 
 B)False

Exam 28: Unemployment and Its Natural Rate

Frictional unemployment is inevitable because

The demand for labor by a certain firm is independent of the demand for that firm's product.

The unemployment rate reported by the Bureau of Labor Statistics clearly understates the true unemployment rate.

The Wagner Act of 1935

When the wage is above the equilibrium level,

Minimum-wage laws

Table 28-10 The table below lists the number of people by labor force classification for the country of Springfield. -Refer to Table 28-10. Calculate the U-4 unemployment rate.

Within the U.S. population, teenagers (ages 16-19) have similar rates of unemployment to adults of prime working age (ages 25-54), regardless of race or gender.

Table 28-11 2015 Labor Data for Tajnia -Refer to Table 28-11. The labor force of Tajnia in 2015 is 10,000.

If all workers and all jobs were the same such that all workers were equally well suited for all jobs, then job search would not be a problem.

Almost nine-tenths of all spells of unemployment end when the unemployed person finds a job.

Which of the following is an example of an efficiency wage?

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

Briefly describe how labor unions can affect wages in non-unionized industries.

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

One explanation for long-run unemployment is that it takes time for workers to search for the jobs that are best suited for them.

The theory of efficiency wages provides a possible explanation as to why

The Bureau of Labor Statistics' U-2 measure of joblessness includes job losers and job leavers.

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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