Question 1

Teenage unemployment is higher than unemployment of people ages 20 and over. Explain why economists would attribute at least part of this difference to minimum-wage laws.

Accepted Answer

People who are experienced and educated

Question 2

Unemployment insurance causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.

Accepted Answer

A) True 
 B)False

Question 3

Suppose that the adult population is 6 million, the number of employed is 3.8 million, and the labor-force participation rate is 70%. What is the unemployment rate?

Accepted Answer

A) 6.7% 
B) 9.5% 
C) 10.5% 
D) 28% 
A) 6.7% 
B) 9.5% 
C) 10.5% 
D) 28%

Question 4

The destruction of manufacturing jobs and workers leaving their jobs to find better ones both contribute to frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 5

The Bureau of Labor Statistics predicts that the number of jobs for dental hygienists will grow faster than most occupations while the number of jobs for bookbinders will decline. This change in the labor market could lead to

Accepted Answer

A) frictional unemployment created by efficiency wages. 
B) structural unemployment created by efficiency wages. 
C) frictional unemployment created by sectoral shifts. 
D) structural unemployment created by sectoral shifts. 
A) frictional unemployment created by efficiency wages. 
B) structural unemployment created by efficiency wages. 
C) frictional unemployment created by sectoral shifts. 
D) structural unemployment created by sectoral shifts.

Question 6

Which of the following was not among the four industries with the largest employment in the United States a century ago?

Accepted Answer

A) cotton goods 
B) men's clothing 
C) meat packing 
D) lumber 
A) cotton goods 
B) men's clothing 
C) meat packing 
D) lumber

Question 7

People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equilibrium are best classified as

Accepted Answer

A) cyclically unemployed. 
B) structurally unemployed. 
C) frictionally unemployed. 
D) discouraged workers. 
A) cyclically unemployed. 
B) structurally unemployed. 
C) frictionally unemployed. 
D) discouraged workers.

Question 8

Right-to-work laws give workers in a unionized firm the right to choose whether to join the union.

Accepted Answer

A) True 
 B)False

Question 9

Labor Force Statistics by Age.Suppose people in the adult population in a small country are classified based on their age. $$\begin{array} { | l | c | c | } 
\hline  { \text { Lebar Farce Status } } & \text { lets then 55 } & 55 \text { and alder } \
\hline \text { Number enplayed } & 400,000 & 100,000 \
\hline \text { Number unamplayed } & 25,000 & 7,000 \
\hline \text { Numbe in Papulation } & 600,000 & 200,000 \
\hline
\end{array}$$
-Refer to Labor Force Statistics by Age. In the proper order, which age group has the highest unemployment rate and which has the highest participation rate?

Accepted Answer

A) under 55, under 55 
B) under 55, 55 and older 
C) 55 and older, under 55 
D) 55 and older, 55 and older 
A) under 55, under 55 
B) under 55, 55 and older 
C) 55 and older, under 55 
D) 55 and older, 55 and older

Question 10

Efficiency wages contribute to

Accepted Answer

A) frictional unemployment and the natural rate of unemployment. 
B) frictional unemployment but not the natural rate of unemployment. 
C) structural unemployment and the natural rate of unemployment. 
D) structural unemployment but not the natural rate of unemployment. 
A) frictional unemployment and the natural rate of unemployment. 
B) frictional unemployment but not the natural rate of unemployment. 
C) structural unemployment and the natural rate of unemployment. 
D) structural unemployment but not the natural rate of unemployment.

Question 11

John is a stockbroker. He has had several job offers, but he has turned them down because he thinks he can find a firm that better matches his tastes and skills. Curtis has looked for work as an accountant for some time. While the demand for accountants doesn't appear to be falling, there seems to be more people applying than jobs available.

Accepted Answer

A) John and Curtis are both frictionally unemployed. 
B) John and Curtis are both structurally unemployed. 
C) John is frictionally unemployed, and Curtis is structurally unemployed. 
D) John is structurally unemployed, and Curtis is frictionally unemployed. 
A) John and Curtis are both frictionally unemployed. 
B) John and Curtis are both structurally unemployed. 
C) John is frictionally unemployed, and Curtis is structurally unemployed. 
D) John is structurally unemployed, and Curtis is frictionally unemployed.

Question 12

Minimum-wage laws can keep wages

Accepted Answer

A) above equilibrium and cause a surplus of labor. 
B) above equilibrium and cause a shortage of labor. 
C) below equilibrium and cause a surplus of labor. 
D) below equilibrium and cause a shortage of labor. 
A) above equilibrium and cause a surplus of labor. 
B) above equilibrium and cause a shortage of labor. 
C) below equilibrium and cause a surplus of labor. 
D) below equilibrium and cause a shortage of labor.

Question 13

When a union raises the wage above the equilibrium level,

Accepted Answer

A) the quantity of labor supplied and unemployment both rise. 
B) the quantity of labor supplied and unemployment both fall. 
C) the quantity of labor supplied rises and unemployment falls. 
D) the quantity of labor supplied falls and unemployment rises. 
A) the quantity of labor supplied and unemployment both rise. 
B) the quantity of labor supplied and unemployment both fall. 
C) the quantity of labor supplied rises and unemployment falls. 
D) the quantity of labor supplied falls and unemployment rises.

Question 14

Collective bargaining refers to

Accepted Answer

A) the process by which the government sets exemptions from the minimum wage law. 
B) setting the same wage for all employees to prevent conflict among workers. 
C) firms colluding to set the wages of employees below equilibrium. 
D) the process by which unions and firms agree on the terms of employment. 
A) the process by which the government sets exemptions from the minimum wage law. 
B) setting the same wage for all employees to prevent conflict among workers. 
C) firms colluding to set the wages of employees below equilibrium. 
D) the process by which unions and firms agree on the terms of employment.

Question 15

Figure 15-1  
-Refer to Figure 15-1. At the equilibrium wage, how many workers are unemployed?

Accepted Answer

A) 0 
B) 4000 
C) 5000 
D) 8000 
A) 0 
B) 4000 
C) 5000 
D) 8000

Question 16

Who is included in the labor force by the Bureau of Labor Statistics?

Accepted Answer

A) Chris, an unpaid homemaker not looking for other work 
B) Marcus, a full-time student not looking for work 
C) Gabe, who does not have a job, but is looking for work 
D) None of the above is correct. 
A) Chris, an unpaid homemaker not looking for other work 
B) Marcus, a full-time student not looking for work 
C) Gabe, who does not have a job, but is looking for work 
D) None of the above is correct.

Question 17

Who of the following would necessarily be included in the Bureau of Labor Statistics' "unemployed" category?

Accepted Answer

A) Lisa, who did not work during the previous 4 weeks 
B) Julie, who tried to find new employment during the previous 4 weeks 
C) Robert, who was an unpaid worker during the previous 4 weeks 
D) None of the above is correct. 
A) Lisa, who did not work during the previous 4 weeks 
B) Julie, who tried to find new employment during the previous 4 weeks 
C) Robert, who was an unpaid worker during the previous 4 weeks 
D) None of the above is correct.

Question 18

Cyclical unemployment is caused by

Accepted Answer

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

Question 19

Minimum-wage laws, unions, and efficiency wages contribute to

Accepted Answer

A) both structural unemployment and the natural rate of unemployment. 
B) neither structural unemployment nor the natural rate of unemployment. 
C) structural unemployment, but not the natural rate of unemployment. 
D) the natural rate of unemployment, but not structural unemployment. 
A) both structural unemployment and the natural rate of unemployment. 
B) neither structural unemployment nor the natural rate of unemployment. 
C) structural unemployment, but not the natural rate of unemployment. 
D) the natural rate of unemployment, but not structural unemployment.

Question 20

Policies that reduce the time it takes unemployed workers to find new jobs can reduce the economy's natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Exam 15: Unemployment

Teenage unemployment is higher than unemployment of people ages 20 and over. Explain why economists would attribute at least part of this difference to minimum-wage laws.

Unemployment insurance causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.

Suppose that the adult population is 6 million, the number of employed is 3.8 million, and the labor-force participation rate is 70%. What is the unemployment rate?

The destruction of manufacturing jobs and workers leaving their jobs to find better ones both contribute to frictional unemployment.

The Bureau of Labor Statistics predicts that the number of jobs for dental hygienists will grow faster than most occupations while the number of jobs for bookbinders will decline. This change in the labor market could lead to

Which of the following was not among the four industries with the largest employment in the United States a century ago?

People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equilibrium are best classified as

Right-to-work laws give workers in a unionized firm the right to choose whether to join the union.

Efficiency wages contribute to

Minimum-wage laws can keep wages

When a union raises the wage above the equilibrium level,

Collective bargaining refers to

Figure 15-1 -Refer to Figure 15-1. At the equilibrium wage, how many workers are unemployed?

Who is included in the labor force by the Bureau of Labor Statistics?

Who of the following would necessarily be included in the Bureau of Labor Statistics' "unemployed" category?

Cyclical unemployment is caused by

Minimum-wage laws, unions, and efficiency wages contribute to

Policies that reduce the time it takes unemployed workers to find new jobs can reduce the economy's natural rate of 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

Application: The Costs of Taxation

Application: International Trade

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 Macroeconomic Models

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

Six Debates Over Macroeconomic Policy

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