Question 1

Which of the following causes of unemployment is not associated with a wage rate above the market equilibrium level?

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 2

Evidence from research studies by economists

Accepted Answer

A)  shows that increased unemployment benefits decrease the job search efforts of the unemployed. 
B)  shows that increased unemployment benefits have virtually no effect on the job search efforts of the unemployed. 
C)  shows that increased unemployment benefits increase the job search efforts of the unemployed. 
D)  is conflicting on what increased unemployment benefits do to the job search efforts of the unemployed. 
A)  shows that increased unemployment benefits decrease the job search efforts of the unemployed. 
B)  shows that increased unemployment benefits have virtually no effect on the job search efforts of the unemployed. 
C)  shows that increased unemployment benefits increase the job search efforts of the unemployed. 
D)  is conflicting on what increased unemployment benefits do to the job search efforts of the unemployed.

Question 3

The labor-force participation rate equals the percentage of the total adult population that is in the labor force.

Accepted Answer

A) True 
 B)False

Question 4

The natural rate of unemployment refers to the current unemployment rate.

Accepted Answer

A) True 
 B)False

Question 5

Wages in excess of their equilibrium level help explain

Accepted Answer

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

Question 6

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

Accepted Answer

A)  Tina, who worked most of the week in a steel factory 
B)  Kelly, who is temporarily laid off but expects to be recalled 
C)  DJ, who does not have a job but is looking for work 
D)  All of the above are correct. 
A)  Tina, who worked most of the week in a steel factory 
B)  Kelly, who is temporarily laid off but expects to be recalled 
C)  DJ, who does not have a job but is looking for work 
D)  All of the above are correct.

Question 7

Frictional unemployment is thought to explain relatively

Accepted Answer

A)  short spells of unemployment, as is structural unemployment. 
B)  long spells of unemployment, as is structural unemployment. 
C)  short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment. 
D)  long spells of unemployment, while structural unemployment is thought to explain relatively short spells of unemployment. 
A)  short spells of unemployment, as is structural unemployment. 
B)  long spells of unemployment, as is structural unemployment. 
C)  short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment. 
D)  long spells of unemployment, while structural unemployment is thought to explain relatively short spells of unemployment.

Question 8

Frictional unemployment can be the consequence of

Accepted Answer

A)  workers leaving existing jobs to find ones they like better. 
B)  one industry declining while another is growing. 
C)  changes in the working conditions offered by competing firms. 
D)  All of the above are correct. 
A)  workers leaving existing jobs to find ones they like better. 
B)  one industry declining while another is growing. 
C)  changes in the working conditions offered by competing firms. 
D)  All of the above are correct.

Question 9

When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

Accepted Answer

A) True 
 B)False

Question 10

Suppose that some country had an adult population of about 46 million, a labor-force participation rate of 75 percent, and an unemployment rate of 8 percent. How many people were unemployed?

Accepted Answer

A)  2.54 million 
B)  2.76 million 
C)  3.68 million 
D)  8 million 
A)  2.54 million 
B)  2.76 million 
C)  3.68 million 
D)  8 million

Question 11

Structural unemployment is often thought to explain relatively long spells of unemployment.

Accepted Answer

A) True 
 B)False

Question 12

Unemployment insurance

Accepted Answer

A)  may improve the ability of the economy to match workers with appropriate jobs. 
B)  reduces the job search efforts of the unemployed. 
C)  increases the amount of frictional unemployment in the economy. 
D)  All of the above are correct. 
A)  may improve the ability of the economy to match workers with appropriate jobs. 
B)  reduces the job search efforts of the unemployed. 
C)  increases the amount of frictional unemployment in the economy. 
D)  All of the above are correct.

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

The unemployment that results from the process of matching workers and jobs is called structural unemployment.

Accepted Answer

A) True 
 B)False

Question 15

Table 28-4
2010 Labor Data for Adults (ages 16 and older) in Meditor  
-Refer to Table 28-4. What is the adult female unemployment rate in Meditor?

Accepted Answer

A)  4.8% 
B)  5.0% 
C)  7.1% 
D)  7.7% 
A)  4.8% 
B)  5.0% 
C)  7.1% 
D)  7.7%

Question 16

Which of the following is an example of an efficiency wage?

Accepted Answer

A)  a higher wage paid to a more experienced worker 
B)  a below-equilibrium wage paid by a small business exempt from minimum-wage laws 
C)  an above-equilibrium wage paid by a firm to reduce turnover costs 
D)  a wage tied to participation in a government-sponsored job training program 
A)  a higher wage paid to a more experienced worker 
B)  a below-equilibrium wage paid by a small business exempt from minimum-wage laws 
C)  an above-equilibrium wage paid by a firm to reduce turnover costs 
D)  a wage tied to participation in a government-sponsored job training program

Question 17

Table 28-7
Below is data about the labor market in the city of Productionville.  
-Refer to Table 28-7. If the local government imposed a minimum wage of $8 in Productionville, how many people would be unemployed?

Accepted Answer

A)  0 
A)  2,000 
B)  5,000 
C)  10,000 
A)  0 
A)  2,000 
B)  5,000 
C)  10,000

Question 18

In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a result, turnover and absenteeism fell and productivity and profits rose.

Accepted Answer

A) True 
 B)False

Question 19

Since the 1940's U.S. union membership has

Accepted Answer

A)  fallen. This decline should have reduced structural unemployment. 
B)  fallen. This decline should not have reduced structural unemployment. 
C)  risen. This increase should have raised structural unemployment. 
D)  risen. This increase should not have raised structural unemployment. 
A)  fallen. This decline should have reduced structural unemployment. 
B)  fallen. This decline should not have reduced structural unemployment. 
C)  risen. This increase should have raised structural unemployment. 
D)  risen. This increase should not have raised structural unemployment.

Question 20

Which of the following is not correct?

Accepted Answer

A)  The unemployment rate is an imperfect measure of a nation's overall level of economic well­being. 
B)  Most job search in the U.S. economy takes place without intervention by the government. 
C)  Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well-being. 
D)  Other things the same, countries that offer more generous and longer-lasting unemployment insurance benefits are likely to have higher unemployment rates. 
A)  The unemployment rate is an imperfect measure of a nation's overall level of economic well­being. 
B)  Most job search in the U.S. economy takes place without intervention by the government. 
C)  Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well-being. 
D)  Other things the same, countries that offer more generous and longer-lasting unemployment insurance benefits are likely to have higher unemployment rates.

Exam 28: Unemployment

Which of the following causes of unemployment is not associated with a wage rate above the market equilibrium level?

Evidence from research studies by economists

The labor-force participation rate equals the percentage of the total adult population that is in the labor force.

The natural rate of unemployment refers to the current unemployment rate.

Wages in excess of their equilibrium level help explain

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

Frictional unemployment is thought to explain relatively

Frictional unemployment can be the consequence of

When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

Suppose that some country had an adult population of about 46 million, a labor-force participation rate of 75 percent, and an unemployment rate of 8 percent. How many people were unemployed?

Structural unemployment is often thought to explain relatively long spells of unemployment.

Unemployment insurance

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.

The unemployment that results from the process of matching workers and jobs is called structural unemployment.

Table 28-4 2010 Labor Data for Adults (ages 16 and older) in Meditor -Refer to Table 28-4. What is the adult female unemployment rate in Meditor?

Which of the following is an example of an efficiency wage?

Table 28-7 Below is data about the labor market in the city of Productionville. -Refer to Table 28-7. If the local government imposed a minimum wage of $8 in Productionville, how many people would be unemployed? A) 0

In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a result, turnover and absenteeism fell and productivity and profits rose.

Since the 1940's U.S. union membership has

Which of the following is not correct?

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 Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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 Macroeconomics: Basic Concepts

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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