Question 1

Studies have shown that the design of the unemployment insurance system reduces the job search effort of the unemployed.

Accepted Answer

A) True 
 B)False

Question 2

To maintain their standard of living, most people rely on

Accepted Answer

A)  government assistance. 
B)  their personal savings. 
C)  their labor earnings. 
D)  rental income. 
A)  government assistance. 
B)  their personal savings. 
C)  their labor earnings. 
D)  rental income.

Question 3

The efficiency-wage theory of worker health is more relevant for explaining unemployment in less developed countries than in rich countries.

Accepted Answer

A) True 
 B)False

Question 4

There is a clear consensus among economists that unions are

Accepted Answer

A)  good for the economy because they result in higher wages for most workers. 
B)  good for the economy because they are a necessary antidote to the market power of employers. 
C)  bad for the economy because they are cartels and therefore detrimental to an efficient allocation of resources. 
D)  None of the above is correct; there is no clear consensus among economists about whether unions are good or bad for the economy. 
A)  good for the economy because they result in higher wages for most workers. 
B)  good for the economy because they are a necessary antidote to the market power of employers. 
C)  bad for the economy because they are cartels and therefore detrimental to an efficient allocation of resources. 
D)  None of the above is correct; there is no clear consensus among economists about whether unions are good or bad for the economy.

Question 5

The reported unemployment rate should be viewed as

Accepted Answer

A)  a useful but imperfect measure of joblessness. 
B)  clearly smaller than the true unemployment rate. 
C)  clearly larger than the true unemployment rate. 
D)  being very close to the true unemployment rate. 
A)  a useful but imperfect measure of joblessness. 
B)  clearly smaller than the true unemployment rate. 
C)  clearly larger than the true unemployment rate. 
D)  being very close to the true unemployment rate.

Question 6

Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well­being.

Accepted Answer

A) True 
 B)False

Question 7

Olga owns her own business. Sven is an unpaid worker in his family's business. Who is included in the Bureau of Labor Statistics' "employed" category?

Accepted Answer

A)  only Olga 
B)  only Sven 
C)  both Olga and Sven 
D)  neither Olga nor Sven 
A)  only Olga 
B)  only Sven 
C)  both Olga and Sven 
D)  neither Olga nor Sven

Question 8

Which of the following is correct?

Accepted Answer

A)  In unionized industries, wages are above the level that would prevail in competitive markets. 
B)  The introduction of a union in some industry reduces the quantity of labor demanded in that industry, causes some workers in that industry to be unemployed, and reduces wages in the rest of the economy. 
C)  Critics argue that the allocation of labor resulting from unions is both inefficient and inequitable. 
D)  All of the above are correct. 
A)  In unionized industries, wages are above the level that would prevail in competitive markets. 
B)  The introduction of a union in some industry reduces the quantity of labor demanded in that industry, causes some workers in that industry to be unemployed, and reduces wages in the rest of the economy. 
C)  Critics argue that the allocation of labor resulting from unions is both inefficient and inequitable. 
D)  All of the above are correct.

Question 9

Which of the following is not a reason economies experience structural unemployment?

Accepted Answer

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

Question 10

Unions are exempt from U.S. antitrust laws.

Accepted Answer

A) True 
 B)False

Question 11

Sectoral shifts in demand for output

Accepted Answer

A)  create structural unemployment. 
B)  immediately reduce unemployment. 
C)  increase unemployment due to job search. 
D)  do not affect demand for labor. 
A)  create structural unemployment. 
B)  immediately reduce unemployment. 
C)  increase unemployment due to job search. 
D)  do not affect demand for labor.

Question 12

Which of the following is not an explanation for the existence of unemployment in the long run?

Accepted Answer

A)  it takes time for workers to search for the jobs that are best suited for them 
B)  minimum-wage laws 
C)  unions 
D)  the business cycle 
A)  it takes time for workers to search for the jobs that are best suited for them 
B)  minimum-wage laws 
C)  unions 
D)  the business cycle

Question 13

Give an historical example of an efficiency wage that was considered by the firm to be "one of the finest cost­ cutting moves we ever made."

Accepted Answer

Henry Ford paid $5 per day to

Question 14

Unions

Accepted Answer

A)  and firms paying wages above equilibrium to improve worker effort both create frictional unemployment. 
B)  creates frictional unemployment, while firms paying wages above equilibrium to improve worker effort creates structural unemployment. 
C)  creates structural unemployment, while firms paying wages above equilibrium to improve worker effort creates frictional unemployment. 
D)  and firms paying wages above equilibrium to improve worker effort both create structural unemployment. 
A)  and firms paying wages above equilibrium to improve worker effort both create frictional unemployment. 
B)  creates frictional unemployment, while firms paying wages above equilibrium to improve worker effort creates structural unemployment. 
C)  creates structural unemployment, while firms paying wages above equilibrium to improve worker effort creates frictional unemployment. 
D)  and firms paying wages above equilibrium to improve worker effort both create structural unemployment.

Question 15

When a union raises the wage above the equilibrium level,

Accepted Answer

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

Question 16

The Bureau of Labor Statistics' household survey and establishment survey both yield the same results about total employment.

Accepted Answer

A) True 
 B)False

Question 17

The deviation of unemployment from its natural rate is called cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 18

If all workers and all jobs were the same such that all workers were equally well suited for all jobs, then there would be no

Accepted Answer

A)  cyclical unemployment. 
B)  frictional unemployment. 
C)  natural rate of unemployment. 
D)  structural unemployment. 
A)  cyclical unemployment. 
B)  frictional unemployment. 
C)  natural rate of unemployment. 
D)  structural unemployment.

Question 19

Table 28-6
  
-Refer to Table 28-6. What is the U-3 measure of labor underutilization?

Accepted Answer

A)  4.7% 
B)  6.2% 
C)  7.0% 
D)  10.9% 
A)  4.7% 
B)  6.2% 
C)  7.0% 
D)  10.9%

Question 20

Causes of the changing role of women in American society over the past several decades include new technologies that have reduced the amount of time required to complete routine household tasks, improved birth control, and changing political and social attitudes.

Accepted Answer

A) True 
 B)False

Exam 20: Unemployment

Studies have shown that the design of the unemployment insurance system reduces the job search effort of the unemployed.

To maintain their standard of living, most people rely on

The efficiency-wage theory of worker health is more relevant for explaining unemployment in less developed countries than in rich countries.

There is a clear consensus among economists that unions are

The reported unemployment rate should be viewed as

Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well­being.

Olga owns her own business. Sven is an unpaid worker in his family's business. Who is included in the Bureau of Labor Statistics' "employed" category?

Which of the following is correct?

Which of the following is not a reason economies experience structural unemployment?

Unions are exempt from U.S. antitrust laws.

Sectoral shifts in demand for output

Which of the following is not an explanation for the existence of unemployment in the long run?

Give an historical example of an efficiency wage that was considered by the firm to be "one of the finest cost­ cutting moves we ever made."

Unions

When a union raises the wage above the equilibrium level,

The Bureau of Labor Statistics' household survey and establishment survey both yield the same results about total employment.

The deviation of unemployment from its natural rate is called cyclical unemployment.

If all workers and all jobs were the same such that all workers were equally well suited for all jobs, then there would be no

Table 28-6 -Refer to Table 28-6. What is the U-3 measure of labor underutilization?

Causes of the changing role of women in American society over the past several decades include new technologies that have reduced the amount of time required to complete routine household tasks, improved birth control, and changing political and social attitudes.

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

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

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

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

Filters

Most economists agree that eliminating unemployment insurance would increase the nation's overall level of wellbeing.

Give an historical example of an efficiency wage that was considered by the firm to be "one of the finest cost cutting moves we ever made."