Question 1

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 2

Suppose that garbage collectors and landscaping workers have no unions. Now suppose that garbage collectors form unions. What does this do to the labor supply and wages of landscaping workers?

Accepted Answer

A) Both labor supply and wages increase. 
B) Labor supply increases, and wages decrease. 
C) Labor supply decreases, and wages increase. 
D) Both labor supply and wages decrease. 
A) Both labor supply and wages increase. 
B) Labor supply increases, and wages decrease. 
C) Labor supply decreases, and wages increase. 
D) Both labor supply and wages decrease.

Question 3

The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of about 60,000 households, called the Current Population Survey.

Accepted Answer

A) True 
 B)False

Question 4

An economy's natural rate of unemployment refers to the amount of unemployment that the economy normally experiences.

Accepted Answer

A) True 
 B)False

Question 5

People who report being not in the labor force but who, in fact, want to work but have given up trying to find a job after an unsuccessful search cause the reported unemployment rate to be lower than it would otherwise be.

Accepted Answer

A) True 
 B)False

Question 6

If the wage is kept above the equilibrium level because of minimum-wage laws, then the result is unemployment; if the wage is kept above the equilibrium level for some other reason, the result need not be unemployment.

Accepted Answer

A) True 
 B)False

Question 7

Some long-run unemployment may be explained by the fact that the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one.

Accepted Answer

A) True 
 B)False

Question 8

Most economists agree that eliminating unemployment insurance would increase the amount of unemployment in the economy.

Accepted Answer

A) True 
 B)False

Question 9

Table 28-6
The table below lists the number of people by labor force classification for the country of Shelbyville.
 $$\begin{array} { | l | l | } 
\hline \text { Employed } & 80 \text { million } \
\hline \text { Unemployed } & 20 \text { million } \
\hline \text { Not in the Labor Force } & 60 \text { million } \
\hline
\end{array}$$
-Refer to Table 28-6. What is the unemployment rate?

Accepted Answer

The answer of Table 28-6
The table below lists the number...

Question 10

Within the U.S. population, women of prime working age (ages 25-54) have lower rates of labor-force participation than men of prime working age (ages 25-54), regardless of race.

Accepted Answer

A) True 
 B)False

Question 11

When a union bargains successfully with employers, in that industry,

Accepted Answer

A) both wages and unemployment increase. 
B) wages increase and unemployment decreases. 
C) wages decrease and unemployment increases. 
D) both wages and unemployment decrease. 
A) both wages and unemployment increase. 
B) wages increase and unemployment decreases. 
C) wages decrease and unemployment increases. 
D) both wages and unemployment decrease.

Question 12

The Bureau of Labor Statistics defines marginally attached workers as persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past.

Accepted Answer

A) True 
 B)False

Question 13

Data on unemployment indicate that most people who become unemployed will soon find jobs.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Table 28-7
The table below lists the number of people by labor force classification for the country of Springfield.
 $$\begin{array} { | l | l | } 
\hline \text { Employed } & 78 \text { million } \
\hline \text { Part-time employed } & 22 \text { million } \
\hline \text { Unemployed } & 12 \text { million } \
\hline \text { Marginally attached } & 3 \text { million } \
\hline \text { Not in the Labor Force } & 30 \text { million } \
\hline \text { Discouraged } & 4 \text { million } \
\hline
\end{array}$$
-Refer to Table 28-7. Calculate the number in the adult population, and the labor force participation rate.

Accepted Answer

The adult population

Question 16

Structural unemployment results when wages are, for some reason, set above the level that brings supply and demand into equilibrium.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Table 28-7
The table below lists the number of people by labor force classification for the country of Springfield.
 $$\begin{array} { | l | l | } 
\hline \text { Employed } & 78 \text { million } \
\hline \text { Part-time employed } & 22 \text { million } \
\hline \text { Unemployed } & 12 \text { million } \
\hline \text { Marginally attached } & 3 \text { million } \
\hline \text { Not in the Labor Force } & 30 \text { million } \
\hline \text { Discouraged } & 4 \text { million } \
\hline
\end{array}$$
-Refer to Table 28-7. Calculate the number in the labor force, and the unemployment rate.

Accepted Answer

The labor force is 9

Question 19

Minimum-wage laws are least likely to affect the wages paid to

Accepted Answer

A) highly-educated workers. 
B) teenagers. 
C) low-skilled workers. 
D) inexperienced workers. 
A) highly-educated workers. 
B) teenagers. 
C) low-skilled workers. 
D) inexperienced workers.

Question 20

Martha is looking for work as a electrical engineer. Her prospects are good but so far she has not taken a job. Jennifer is looking for work in a paper mill. Every time Jennifer shows up for an interview, there are more people looking for work than there are openings. She realizes that it has been that way for a long time.

Accepted Answer

A) Martha and Jennifer are both frictionally unemployed. 
B) Martha and Jennifer are both structurally unemployed. 
C) Martha is frictionally unemployed, and Jennifer is structurally unemployed. 
D) Martha is structurally unemployed, and Jennifer is frictionally unemployed. 
A) Martha and Jennifer are both frictionally unemployed. 
B) Martha and Jennifer are both structurally unemployed. 
C) Martha is frictionally unemployed, and Jennifer is structurally unemployed. 
D) Martha is structurally unemployed, and Jennifer is frictionally unemployed.

Exam 28: Unemployment and Its Natural Rate

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

Suppose that garbage collectors and landscaping workers have no unions. Now suppose that garbage collectors form unions. What does this do to the labor supply and wages of landscaping workers?

The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of about 60,000 households, called the Current Population Survey.

An economy's natural rate of unemployment refers to the amount of unemployment that the economy normally experiences.

People who report being not in the labor force but who, in fact, want to work but have given up trying to find a job after an unsuccessful search cause the reported unemployment rate to be lower than it would otherwise be.

If the wage is kept above the equilibrium level because of minimum-wage laws, then the result is unemployment; if the wage is kept above the equilibrium level for some other reason, the result need not be unemployment.

Some long-run unemployment may be explained by the fact that the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one.

Most economists agree that eliminating unemployment insurance would increase the amount of unemployment in the economy.

Table 28-6 The table below lists the number of people by labor force classification for the country of Shelbyville. Employed 80 million Unemployed 20 million Not in the Labor Force 60 million -Refer to Table 28-6. What is the unemployment rate?

Within the U.S. population, women of prime working age (ages 25-54) have lower rates of labor-force participation than men of prime working age (ages 25-54), regardless of race.

When a union bargains successfully with employers, in that industry,

The Bureau of Labor Statistics defines marginally attached workers as persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past.

Data on unemployment indicate that most people who become unemployed will soon find jobs.

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

Structural unemployment results when wages are, for some reason, set above the level that brings supply and demand into equilibrium.

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

Minimum-wage laws are least likely to affect the wages paid to

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 Nations 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