Exam 15: Unemployment: Part B

When a minimum-wage law forces the wage to remain above the level that balances supply and demand,the result is a shortage of labor.

Frictional unemployment is inevitable because the economy is always changing.

If a union and a firm cannot reach an agreement on the terms of employment,then the union can organize a withdrawal of labor from the firm,called a strike.

Right-to-work laws allow striking union members to be permanently replaced.

When a country keeps its workers as fully employed as possible,it achieves a higher level of GDP than if many of its workers were idle.

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

A firm might offer efficiency wages to reduce worker turnover and thereby reduce production costs.

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

Efficiency wages create structural unemployment.

Measuring the amount of unemployment in the economy is a straightforward task.

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.

The Bureau of Labor Statistics' U-3 measure of joblessness is the official unemployment rate.

When a minimum-wage law forces the wage to remain above the level that balances supply and demand,the quantity of labor supplied is higher and the quantity demanded of labor is lower than at the equilibrium wage.

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.

Minimum-wage laws are one reason there is always some unemployment in the U.S.economy.

Some adults who were not working are included in the Bureau of Labor Statistics' "employed" category.

Within the U.S.population,blacks of prime working age (ages 25-54)have similar rates of unemployment than whites of prime working age (ages 25-54),regardless of gender.

Adults who are waiting to be recalled to a job from which they had been laid off are counted as "unemployed."

Most spells of unemployment are long,and most unemployment observed at any given time is long-term.

Because people move into and out of the labor force so often,statistics on unemployment are difficult to interpret.