Question 1

Efficiency wages create structural unemployment.

Accepted Answer

A) True 
 B)False

Question 2

Assuming everyone in the question below is in the adult population,which of the following is not correct?

Accepted Answer

A) Elmo works part time as a baby sitter.The BLS counts him as employed and in the labor force. 
B) Anna is a full-time student not looking for a job.The BLS counts her as unemployed and in the labor force. 
C) Jim is on temporary layoff.The BLS counts him as unemployed and part of the labor force. 
D) Liz is seeking work, but has not found it.The BLS counts her as unemployed and in the labor force. 
A) Elmo works part time as a baby sitter.The BLS counts him as employed and in the labor force. 
B) Anna is a full-time student not looking for a job.The BLS counts her as unemployed and in the labor force. 
C) Jim is on temporary layoff.The BLS counts him as unemployed and part of the labor force. 
D) Liz is seeking work, but has not found it.The BLS counts her as unemployed and in the labor force.

Question 3

Figure 28-1
  
-Refer to Figure 28-1.If there were no minimum wage and then the government instituted a minimum wage of $6,in this market,unemployment would

Accepted Answer

A) fall by 10. 
B) fall by 20. 
C) increase by 10. 
D) increase by 20. 
A) fall by 10. 
B) fall by 20. 
C) increase by 10. 
D) increase by 20.

Question 4

The unemployment rate reported by the BLS clearly understates the true unemployment rate.

Accepted Answer

A) True 
 B)False

Question 5

Mary Sue is the newly appointed CEO of a company that manufactures CD drives on an assembly line.Her staff has told her that the output the firm produces,given the number of workers employed,indicates that some workers may be shirking.According to efficiency wage theory,what should she do?

Accepted Answer

A) pay all workers more than the equilibrium wage rate 
B) pay all workers below the equilibrium wage rate to make up for the loss from shirking 
C) make sure that workers are getting paid exactly the equilibrium wage rate 
D) None of the above is correct according to efficiency wage theory. 
A) pay all workers more than the equilibrium wage rate 
B) pay all workers below the equilibrium wage rate to make up for the loss from shirking 
C) make sure that workers are getting paid exactly the equilibrium wage rate 
D) None of the above is correct according to efficiency wage theory.

Question 6

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

Accepted Answer

A) True 
 B)False

Question 7

The natural rate of unemployment is the economist's notion of

Accepted Answer

A) full employment. 
B) cyclical employment. 
C) structural unemployment. 
D) frictional unemployment. 
A) full employment. 
B) cyclical employment. 
C) structural unemployment. 
D) frictional unemployment.

Question 8

Which of the following is correct?

Accepted Answer

A) Some degree of unemployment is inevitable. 
B) Other things the same an increase in the number of people who are unemployed is associated with a decrease in real GDP. 
C) Cyclical unemployment is inversely related to short-run economic fluctuations in GDP. 
D) All of the above are correct. 
A) Some degree of unemployment is inevitable. 
B) Other things the same an increase in the number of people who are unemployed is associated with a decrease in real GDP. 
C) Cyclical unemployment is inversely related to short-run economic fluctuations in GDP. 
D) All of the above are correct.

Question 9

Ellen decides to hire some additional workers for her vinyl siding factory.The equilibrium wage is $14 per hour.Efficiency wage theory suggests that it is reasonable for Ellen to offer

Accepted Answer

A) $14 per hour. 
B) less than $14 per hour, since some people would be willing to work for less. 
C) less than $14 an hour to prevent shirking. 
D) more than $14 per hour, so as to attract a better pool of applicants. 
A) $14 per hour. 
B) less than $14 per hour, since some people would be willing to work for less. 
C) less than $14 an hour to prevent shirking. 
D) more than $14 per hour, so as to attract a better pool of applicants.

Question 10

The labor-force participation rate is defined as

Accepted Answer

A) (Employed ÷ Adult Population) × 100. 
B) (Employed ÷ Labor Force) × 100. 
C) (Labor Force ÷ Adult Population) × 100. 
D) (Adult Population ÷ Labor Force) × 100. 
A) (Employed ÷ Adult Population) × 100. 
B) (Employed ÷ Labor Force) × 100. 
C) (Labor Force ÷ Adult Population) × 100. 
D) (Adult Population ÷ Labor Force) × 100.

Question 11

Between 2004 and 2005,the country of Aquilonia reported an increase in the number of people who were employed.It also reported an increase in the unemployment rate.Which of the following would best explain the two reports?

Accepted Answer

A) There was an increase in the size of the labor force between 2004 and 2005. 
B) There was a decrease in the size of the labor force between 2004 and 2005. 
C) There was an increase in the size of the adult population between 2004 and 2005. 
D) The two reports are contradictory and can't be reconciled. 
A) There was an increase in the size of the labor force between 2004 and 2005. 
B) There was a decrease in the size of the labor force between 2004 and 2005. 
C) There was an increase in the size of the adult population between 2004 and 2005. 
D) The two reports are contradictory and can't be reconciled.

Question 12

Which of the following is correct?

Accepted Answer

A) Minimum-wage laws are the predominant cause of unemployment in the U.S. 
B) Right-to-work laws provide programs to train people who have lost their jobs due to sectoral shifts. 
C) There's not much evidence that unemployment insurance reduces search efforts by the unemployed. 
D) If an industry unionizes, it increases wages in that industry while decreasing wages in other industries. 
A) Minimum-wage laws are the predominant cause of unemployment in the U.S. 
B) Right-to-work laws provide programs to train people who have lost their jobs due to sectoral shifts. 
C) There's not much evidence that unemployment insurance reduces search efforts by the unemployed. 
D) If an industry unionizes, it increases wages in that industry while decreasing wages in other industries.

Question 13

The labor-force participation rate of the U.S.adult population (ages 16 and over)is about

Accepted Answer

A) 47 percent. 
B) 55 percent. 
C) 66 percent. 
D) 74 percent. 
A) 47 percent. 
B) 55 percent. 
C) 66 percent. 
D) 74 percent.

Question 14

Which of the following would reduce the natural rate of unemployment?

Accepted Answer

A) The Internet provides more readily available information about available jobs. 
B) Congress increases the minimum wage. 
C) Laws are passed that make it more difficult to monitor the efforts of workers. 
D) All of the above are correct. 
A) The Internet provides more readily available information about available jobs. 
B) Congress increases the minimum wage. 
C) Laws are passed that make it more difficult to monitor the efforts of workers. 
D) All of the above are correct.

Question 15

The participation rate of white teenagers is about

Accepted Answer

A) 83% 
B) 63% 
C) 47% 
D) 28% 
A) 83% 
B) 63% 
C) 47% 
D) 28%

Question 16

The BLS produces data on

Accepted Answer

A) unemployment. 
B) types of employment. 
C) length of the average workweek. 
D) All of the above are correct. 
A) unemployment. 
B) types of employment. 
C) length of the average workweek. 
D) All of the above are correct.

Question 17

When employers pay efficiency wages,they pay wages

Accepted Answer

A) below equilibrium to increase profitability. 
B) above equilibrium to increase productivity. 
C) set by the government to counter charges of unfair labor practices. 
D) at a level that would prevail in the absence of unions. 
A) below equilibrium to increase profitability. 
B) above equilibrium to increase productivity. 
C) set by the government to counter charges of unfair labor practices. 
D) at a level that would prevail in the absence of unions.

Question 18

Suppose that a large number of men who used to work or seek work now no longer do either.Other things the same,this makes the

Accepted Answer

A) the number of people unemployed rise but the labor force does not change. 
B) the number of people unemployed rise but the labor force falls. 
C) the number of people unemployed and the labor force both falls. 
D) the number of people unemployed fall while the labor force does not change. 
A) the number of people unemployed rise but the labor force does not change. 
B) the number of people unemployed rise but the labor force falls. 
C) the number of people unemployed and the labor force both falls. 
D) the number of people unemployed fall while the labor force does not change.

Question 19

The natural unemployment rate includes

Accepted Answer

A) both frictional and structural unemployment. 
B) neither frictional nor structural unemployment. 
C) structural, but not frictional unemployment. 
D) frictional, but not structural unemployment. 
A) both frictional and structural unemployment. 
B) neither frictional nor structural unemployment. 
C) structural, but not frictional unemployment. 
D) frictional, but not structural unemployment.

Question 20

Unemployment insurance

Accepted Answer

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

Exam 28: Unemployment

Efficiency wages create structural unemployment.

Assuming everyone in the question below is in the adult population,which of the following is not correct?

Figure 28-1 -Refer to Figure 28-1.If there were no minimum wage and then the government instituted a minimum wage of $6,in this market,unemployment would

The unemployment rate reported by the BLS clearly understates the true unemployment rate.

Mary Sue is the newly appointed CEO of a company that manufactures CD drives on an assembly line.Her staff has told her that the output the firm produces,given the number of workers employed,indicates that some workers may be shirking.According to efficiency wage theory,what should she do?

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

The natural rate of unemployment is the economist's notion of

Which of the following is correct?

Ellen decides to hire some additional workers for her vinyl siding factory.The equilibrium wage is $14 per hour.Efficiency wage theory suggests that it is reasonable for Ellen to offer

The labor-force participation rate is defined as

Between 2004 and 2005,the country of Aquilonia reported an increase in the number of people who were employed.It also reported an increase in the unemployment rate.Which of the following would best explain the two reports?

Which of the following is correct?

The labor-force participation rate of the U.S.adult population (ages 16 and over)is about

Which of the following would reduce the natural rate of unemployment?

The participation rate of white teenagers is about

The BLS produces data on

When employers pay efficiency wages,they pay wages

Suppose that a large number of men who used to work or seek work now no longer do either.Other things the same,this makes the

The natural unemployment rate includes

Unemployment insurance

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: 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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic 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 Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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