Question 1

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Accepted Answer

A) True 
 B)False

Question 2

Unemployment insurance is designed to offer workers full protection against job loss.

Accepted Answer

A) True 
 B)False

Question 3

Frictional unemployment is often the result of changes in the demand for labor among different firms.

Accepted Answer

A) True 
 B)False

Question 4

When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand.

Accepted Answer

A) True 
 B)False

Question 5

Economists at the Congressional Budget Office estimated that for 2009, the U.S. natural rate of unemployment was 5.0 percent.

Accepted Answer

A) True 
 B)False

Question 6

Jouke is on a temporary layoff from his factory job but has not looked for work in the last four weeks. The Bureau of Labor Statistics counts Jouke as

Accepted Answer

A) unemployed and in the labor force. 
B) unemployed and not in the labor force. 
C) employed and in the labor force. 
D) employed and not in the labor force. 
A) unemployed and in the labor force. 
B) unemployed and not in the labor force. 
C) employed and in the labor force. 
D) employed and not in the labor force.

Question 7

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

Accepted Answer

A) 0 
B) 1000 
C) 5000 
D) 9000 
A) 0 
B) 1000 
C) 5000 
D) 9000

Question 8

The efficiency-wage theory of worker quality suggests that if firms respond to a surplus of labor by reducing the wage, then highly qualified workers will be

Accepted Answer

A) more likely to apply, and unemployment will increase. 
B) more likely to apply, and unemployment will decrease 
C) less likely to apply, and unemployment will Increase. 
D) less likely to apply, and unemployment will increase. 
A) more likely to apply, and unemployment will increase. 
B) more likely to apply, and unemployment will decrease 
C) less likely to apply, and unemployment will Increase. 
D) less likely to apply, and unemployment will increase.

Question 9

Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as

Accepted Answer

A) unemployed and in the labor force. 
B) unemployed, but not in the labor force. 
C) in the labor force, but not unemployed. 
D) neither in the labor force nor unemployed. 
A) unemployed and in the labor force. 
B) unemployed, but not in the labor force. 
C) in the labor force, but not unemployed. 
D) neither in the labor force nor unemployed.

Question 10

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 11

Which of the following is not an explanation for the existence of structural unemployment?

Accepted Answer

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

Question 12

Figure 15-1  
-Refer to Figure 15-1. If the government imposes a minimum wage of $8, then unemployment will increase by

Accepted Answer

A) 0 workers. 
B) 2000 workers. 
C) 4000 workers. 
D) 7000 workers. 
A) 0 workers. 
B) 2000 workers. 
C) 4000 workers. 
D) 7000 workers.

Question 13

If the wage is kept above the equilibrium wage for any reason, the result is

Accepted Answer

A) cyclical unemployment. 
B) frictional unemployment. 
C) seasonal unemployment. 
D) structural unemployment. 
A) cyclical unemployment. 
B) frictional unemployment. 
C) seasonal unemployment. 
D) structural unemployment.

Question 14

Unemployment insurance

Accepted Answer

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

Question 15

It is only among the least skilled and least experienced members of the labor force that minimum-wage laws cause unemployment.

Accepted Answer

A) True 
 B)False

Question 16

Today, the four industries with the largest employment in the United States are autos, aircraft, communications, and electrical components.

Accepted Answer

A) True 
 B)False

Question 17

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 18

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 19

In the early 1900s, Henry Ford introduced

Accepted Answer

A) a high-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory. 
B) a high-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory. 
C) a low-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory. 
D) a low-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory. 
A) a high-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory. 
B) a high-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory. 
C) a low-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory. 
D) a low-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.

Question 20

Sectoral shifts temporarily cause unemployment.

Accepted Answer

A) True 
 B)False

Exam 15: Unemployment

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Unemployment insurance is designed to offer workers full protection against job loss.

Frictional unemployment is often the result of changes in the demand for labor among different firms.

When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand.

Economists at the Congressional Budget Office estimated that for 2009, the U.S. natural rate of unemployment was 5.0 percent.

Jouke is on a temporary layoff from his factory job but has not looked for work in the last four weeks. The Bureau of Labor Statistics counts Jouke as

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

The efficiency-wage theory of worker quality suggests that if firms respond to a surplus of labor by reducing the wage, then highly qualified workers will be

Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as

When the wage is above the equilibrium level,

Which of the following is not an explanation for the existence of structural unemployment?

Figure 15-1 -Refer to Figure 15-1. If the government imposes a minimum wage of $8, then unemployment will increase by

If the wage is kept above the equilibrium wage for any reason, the result is

Unemployment insurance

It is only among the least skilled and least experienced members of the labor force that minimum-wage laws cause unemployment.

Today, the four industries with the largest employment in the United States are autos, aircraft, communications, and electrical components.

Paying efficiency wages means that wages are

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

In the early 1900s, Henry Ford introduced

Sectoral shifts temporarily cause 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

Filters