Question 1

Which of the following is best considered an implicit contract?

Accepted Answer

A) A union contract that specifies hourly wages and fringe benefits. 
B) A union contract that specifies how overtime wages will be calculated. 
C) An informal agreement between a firm and its employees to reduce hours of work for everyone a little bit during an economic contraction in order to prevent firing anyone. 
D) An informal agreement between a firm and its employees to have the firm fire its most expensive workers first during an economic contraction. 
E) A historical agreement between a firm and its employees that the firm pays workers based on a combination of age, experience and education. 
A) A union contract that specifies hourly wages and fringe benefits. 
B) A union contract that specifies how overtime wages will be calculated. 
C) An informal agreement between a firm and its employees to reduce hours of work for everyone a little bit during an economic contraction in order to prevent firing anyone. 
D) An informal agreement between a firm and its employees to have the firm fire its most expensive workers first during an economic contraction. 
E) A historical agreement between a firm and its employees that the firm pays workers based on a combination of age, experience and education.

Question 2

According to the neo-classical model, what would not result from the government levying a tax on firms for each worker the firm lays off?

Accepted Answer

A) Firms would be less likely to lay off workers. 
B) Firms would be less likely to hire workers. 
C) Moral hazard would encourage workers to not work as hard as before. 
D) The long-run employment rate would increase. 
E) Unemployed workers would remain unemployed for longer periods of time. 
A) Firms would be less likely to lay off workers. 
B) Firms would be less likely to hire workers. 
C) Moral hazard would encourage workers to not work as hard as before. 
D) The long-run employment rate would increase. 
E) Unemployed workers would remain unemployed for longer periods of time.

Question 3

Consider an economy with a labor force of 200 million people-180 million are employed while 20 million are unemployed.Each period, 45% of the unemployed population finds a job.If the economy is in a steady-state of unemployment, what percent of the employed population lose their job each period?

Accepted Answer

A) 5% 
B) 10% 
C) 15% 
D) 20% 
E) 25% 
A) 5% 
B) 10% 
C) 15% 
D) 20% 
E) 25%

Question 4

Which one of the following statements regarding the intertemporal substitution hypothesis is false?

Accepted Answer

A) Workers are willing to reduce labor supplied during a recession. 
B) Increases in unemployment may be voluntary as workers collect UI benefits. 
C) Increases in unemployment may be voluntary as workers trade income for leisure during low-wage periods. 
D) Wages and hours of leisure will tend to move together over the course of the life-cycle. 
E) Labor supply responds to changes in the real wage. 
A) Workers are willing to reduce labor supplied during a recession. 
B) Increases in unemployment may be voluntary as workers collect UI benefits. 
C) Increases in unemployment may be voluntary as workers trade income for leisure during low-wage periods. 
D) Wages and hours of leisure will tend to move together over the course of the life-cycle. 
E) Labor supply responds to changes in the real wage.

Question 5

Anna works on a farm every spring during planting season and every fall during the harvest season.The farm fails to employ Anna during the summer or the winter.What type of unemployment does Anna experience?

Accepted Answer

A) Frictional unemployment 
B) Seasonal unemployment 
C) Cyclical unemployment 
D) Structural unemployment 
E) Natural unemployment 
A) Frictional unemployment 
B) Seasonal unemployment 
C) Cyclical unemployment 
D) Structural unemployment 
E) Natural unemployment

Question 6

If the intertemporal substitution hypothesis is correct, then

Accepted Answer

A) the unemployment rate is artificially high. 
B) the unemployment rate is artificially low. 
C) discouraged workers should be included in the unemployed population because they actually want a job at the going wage. 
D) discouraged workers should not be included in the unemployed population because they are optimally choosing more leisure during a time of low wages. 
E) discouraged workers won't exist. 
A) the unemployment rate is artificially high. 
B) the unemployment rate is artificially low. 
C) discouraged workers should be included in the unemployed population because they actually want a job at the going wage. 
D) discouraged workers should not be included in the unemployed population because they are optimally choosing more leisure during a time of low wages. 
E) discouraged workers won't exist.

Question 7

The sectoral shifts hypothesis claims that

Accepted Answer

A) cyclical unemployment will always exceed frictional unemployment. 
B) frictional unemployment will cause workers to extend their temporary lay-offs. 
C) most unemployed workers will return to their previous job because the firm knows the skills of the worker. 
D) there will always be a pool of unemployed workers who find jobs quickly (i.e., the frictionally unemployed). 
E) there will always be a pool of unemployed workers who experience long spells of unemployment because their skills do not match those that employers are looking for (i.e., the structurally unemployed). 
A) cyclical unemployment will always exceed frictional unemployment. 
B) frictional unemployment will cause workers to extend their temporary lay-offs. 
C) most unemployed workers will return to their previous job because the firm knows the skills of the worker. 
D) there will always be a pool of unemployed workers who find jobs quickly (i.e., the frictionally unemployed). 
E) there will always be a pool of unemployed workers who experience long spells of unemployment because their skills do not match those that employers are looking for (i.e., the structurally unemployed).

Question 8

How are unemployment rates in the United States related to education?

Accepted Answer

A) Unemployment rates are unrelated to education. 
B) Higher levels of education are associated with higher rates of unemployment. 
C) Higher levels of education are associated with lower rates of unemployment. 
D) Unemployment rates are highest for high school dropouts but are unrelated to education for anyone who has a high school degree. 
E) Unemployment rates for high school dropouts and high school graduates are roughly equal and are less than the overall unemployment rate of college graduates. 
A) Unemployment rates are unrelated to education. 
B) Higher levels of education are associated with higher rates of unemployment. 
C) Higher levels of education are associated with lower rates of unemployment. 
D) Unemployment rates are highest for high school dropouts but are unrelated to education for anyone who has a high school degree. 
E) Unemployment rates for high school dropouts and high school graduates are roughly equal and are less than the overall unemployment rate of college graduates.

Question 9

The Phillips Curve relates

Accepted Answer

A) the unemployment rate to economic growth. 
B) the unemployment rate to inflation. 
C) the unemployment rate to the real wage. 
D) the real wage to total employment. 
E) the real wage to the natural rate of unemployment. 
A) the unemployment rate to economic growth. 
B) the unemployment rate to inflation. 
C) the unemployment rate to the real wage. 
D) the real wage to total employment. 
E) the real wage to the natural rate of unemployment.

Question 10

What does it mean to conduct a sequential search?

Accepted Answer

A) To search for jobs even when employed. 
B) To accept a job offer from an employer, but then to still search for a better job offer. 
C) To accept the first job that one is offered. 
D) To apply to all job openings. 
E) To determine an asking wage and then accept the first job offer that pays a wage equal to or greater than the asking wage. 
A) To search for jobs even when employed. 
B) To accept a job offer from an employer, but then to still search for a better job offer. 
C) To accept the first job that one is offered. 
D) To apply to all job openings. 
E) To determine an asking wage and then accept the first job offer that pays a wage equal to or greater than the asking wage.

Which of the following is best considered an implicit contract?

According to the neo-classical model, what would not result from the government levying a tax on firms for each worker the firm lays off?

Consider an economy with a labor force of 200 million people-180 million are employed while 20 million are unemployed.Each period, 45% of the unemployed population finds a job.If the economy is in a steady-state of unemployment, what percent of the employed population lose their job each period?

Which one of the following statements regarding the intertemporal substitution hypothesis is false?

Anna works on a farm every spring during planting season and every fall during the harvest season.The farm fails to employ Anna during the summer or the winter.What type of unemployment does Anna experience?

If the intertemporal substitution hypothesis is correct, then

The sectoral shifts hypothesis claims that

How are unemployment rates in the United States related to education?

The Phillips Curve relates

What does it mean to conduct a sequential search?

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Filters

Exam 12: Unemployment

Which of the following is best considered an implicit contract?

According to the neo-classical model, what would not result from the government levying a tax on firms for each worker the firm lays off?

Consider an economy with a labor force of 200 million people-180 million are employed while 20 million are unemployed.Each period, 45% of the unemployed population finds a job.If the economy is in a steady-state of unemployment, what percent of the employed population lose their job each period?

Which one of the following statements regarding the intertemporal substitution hypothesis is false?

Anna works on a farm every spring during planting season and every fall during the harvest season.The farm fails to employ Anna during the summer or the winter.What type of unemployment does Anna experience?

If the intertemporal substitution hypothesis is correct, then

The sectoral shifts hypothesis claims that

How are unemployment rates in the United States related to education?

The Phillips Curve relates

What does it mean to conduct a sequential search?

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Filters