Question 1

Who would be included in the labor force?

Accepted Answer

A)  Maggie, who plans to work at the newspaper next year when she turns 16 years old. 
B)  Lisa, who is unhappy with her current job. 
C)  Bart, who is a full-time student and uninterested in finding employment. 
D)  None of the above is correct. 
A)  Maggie, who plans to work at the newspaper next year when she turns 16 years old. 
B)  Lisa, who is unhappy with her current job. 
C)  Bart, who is a full-time student and uninterested in finding employment. 
D)  None of the above is correct.

Question 2

Table 28-3
2009 Labor Data for Baltivia  
-Refer to Table 28-3. How many people were unemployed in Baltivia in 2009?

Accepted Answer

A)  1,400 
B)  1,600 
C)  2,000 
D)  2,780 
A)  1,400 
B)  1,600 
C)  2,000 
D)  2,780

Question 3

Frictional unemployment is inevitable because the economy is always changing.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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

Accepted Answer

A)  8.4% 
B)  9.0% 
C)  9.2% 
D)  35.2% 
A)  8.4% 
B)  9.0% 
C)  9.2% 
D)  35.2%

Question 6

Government-run employment agencies and public training programs are operated by the government to try to facilitate job search and reduce unemployment.

Accepted Answer

A)  Almost all economists agree that such programs are of no use. 
B)  Almost all economists agree that such programs work very well. 
C)  Some economists claim that the government can do these things no better than firms and individuals could do them for themselves. 
D)  Some economists claim that these programs increase frictional unemployment. 
A)  Almost all economists agree that such programs are of no use. 
B)  Almost all economists agree that such programs work very well. 
C)  Some economists claim that the government can do these things no better than firms and individuals could do them for themselves. 
D)  Some economists claim that these programs increase frictional unemployment.

Question 7

Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is correct?

Accepted Answer

A)  In the U.S. the natural rate of unemployment is frequently near 2%. 
B)  The natural rate of unemployment fluctuates more than the cyclical rate of unemployment. 
C)  The cyclical rate of unemployment is sometimes below the natural rate of unemployment. 
D)  None of the above is correct. 
A)  In the U.S. the natural rate of unemployment is frequently near 2%. 
B)  The natural rate of unemployment fluctuates more than the cyclical rate of unemployment. 
C)  The cyclical rate of unemployment is sometimes below the natural rate of unemployment. 
D)  None of the above is correct.

Question 9

Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

Accepted Answer

Most unemployed people in the economy ar

Question 10

Frictional unemployment is inevitable because

Accepted Answer

A)  sectoral shifts are always happening. 
B)  there is a federal minimum-wage law in the U.S. 
C)  some people do not want to be employed. 
D)  unions are very popular in the U.S. 
A)  sectoral shifts are always happening. 
B)  there is a federal minimum-wage law in the U.S. 
C)  some people do not want to be employed. 
D)  unions are very popular in the U.S.

Question 11

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Accepted Answer

Standard economic theory suggests that i

Question 12

Figure 28-3  
-Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment will decrease by

Accepted Answer

A)  0 workers. 
B)  2,000 workers. 
C)  3,000 workers. 
D)  4,000 workers. 
A)  0 workers. 
B)  2,000 workers. 
C)  3,000 workers. 
D)  4,000 workers.

Question 13

Economists at the Congressional Budget Office estimated that for 2012, the U.S. natural rate of unemployment was

Accepted Answer

A)  1.5%. 
B)  3.0%. 
C)  5.5%. 
D)  8.5%. 
A)  1.5%. 
B)  3.0%. 
C)  5.5%. 
D)  8.5%.

Question 14

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 $4 in Productionville, how many people would be unemployed?

Accepted Answer

A)  0 
B)  2,000 
C)  3,000 
D)  10,000 
A)  0 
B)  2,000 
C)  3,000 
D)  10,000

Question 15

Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate?

Accepted Answer

A)  6.25% 
B)  8.3% 
C)  9.1% 
D)  18.75% 
A)  6.25% 
B)  8.3% 
C)  9.1% 
D)  18.75%

Question 16

The natural rate of unemployment

Accepted Answer

A)  (i) and (ii) only 
B)  (iii) only 
C)  (i), (ii), and (iii) 
D)  None of the above is correct. 
A)  (i) and (ii) only 
B)  (iii) only 
C)  (i), (ii), and (iii) 
D)  None of the above is correct.

Question 17

If the minimum wage were currently above the equilibrium wage, then a decrease in the minimum wage that kept it above the equilibrium wage would

Accepted Answer

A)  increase the surplus of labor. 
B)  reduce the surplus of labor. 
C)  increase the shortage of labor. 
D)  reduce the shortage of labor, 
A)  increase the surplus of labor. 
B)  reduce the surplus of labor. 
C)  increase the shortage of labor. 
D)  reduce the shortage of labor,

Question 18

A minimum wage that is below the equilibrium wage rate does not raise unemployment.

Accepted Answer

A) True 
 B)False

Question 19

Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force.

Accepted Answer

A)  Both the first and the second fact tend to make the reported unemployment rate lower than otherwise. 
B)  Both the first and the second fact tend to make the reported unemployment rate higher than otherwise. 
C)  The first fact tends to make the reported unemployment rate higher than otherwise, while the second fact tends to make the reported unemployment rate lower than otherwise. 
D)  The first fact tends to make the reported unemployment rate lower than otherwise, while the second fact tends to make the reported unemployment rate higher than otherwise. 
A)  Both the first and the second fact tend to make the reported unemployment rate lower than otherwise. 
B)  Both the first and the second fact tend to make the reported unemployment rate higher than otherwise. 
C)  The first fact tends to make the reported unemployment rate higher than otherwise, while the second fact tends to make the reported unemployment rate lower than otherwise. 
D)  The first fact tends to make the reported unemployment rate lower than otherwise, while the second fact tends to make the reported unemployment rate higher than otherwise.

Question 20

The Bureau of Labor Statistics' U­5 measure of joblessness is the official unemployment rate.

Accepted Answer

A) True 
 B)False

Exam 28: Unemployment

Who would be included in the labor force?

Table 28-3 2009 Labor Data for Baltivia -Refer to Table 28-3. How many people were unemployed in Baltivia in 2009?

Frictional unemployment is inevitable because the economy is always changing.

Sectoral shifts in demand for output

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

Government-run employment agencies and public training programs are operated by the government to try to facilitate job search and reduce unemployment.

Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable.

Which of the following is correct?

Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

Frictional unemployment is inevitable because

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Figure 28-3 -Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment will decrease by

Economists at the Congressional Budget Office estimated that for 2012, the U.S. natural rate of unemployment was

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 $4 in Productionville, how many people would be unemployed?

Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate?

The natural rate of unemployment

If the minimum wage were currently above the equilibrium wage, then a decrease in the minimum wage that kept it above the equilibrium wage would

A minimum wage that is below the equilibrium wage rate does not raise unemployment.

Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force.

The Bureau of Labor Statistics' U­5 measure of joblessness is the official unemployment rate.

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

Filters

The Bureau of Labor Statistics' U5 measure of joblessness is the official unemployment rate.