Chapter 20 assignment

18. Sam has no job but keeps applying to get a job with a business that is unionized. He is qualified and he finds the pay attractive, but the firm is not hiring. Sam is a. structurally unemployed. Structural unemployment exists even in the long run. b. structurally unemployed. Structural unemployment does not exist in the long run. c. frictionally unemployed. Frictional unemployment exists even in the long run. d. frictionally unemployed. Frictional unemployment does not exist in the long run.

a. structurally unemployed. Structural unemployment exists even in the long run. explanation: influenced by wages = structural

12. Thinking about Sectoral Shifts, which of the following was not among the four industries with the largest employment in the United States a century ago? a. cotton goods b. men's clothing c. meat packing d. lumber

c. meat packing

2. Who of the following would be included in the Bureau of Labor Statistics' "unemployed" category? a. Cambry, a full-time student who is not looking for work b. Eric, who is on temporary layoff c. Carson, who has retired and is not looking for work d. All of the above are correct.

b. Eric, who is on temporary layoff explanation: others are considered "not in labor force"

20. Four employers have justified their actions as follows. Whose logic is not consistent with the logic of efficiency wage theory? a. Jay develops a new assembly line technology that limits the amount of shirking workers can do, so he reduces what he pays his employees so as to make it closer to the equilibrium wage. b. Kay pays her workers less than the equilibrium wage so they won't have the time or money to look for work somewhere else. c. Ray pays his workers in a developing country more than the going wage hoping that they will get a better diet and so be more productive. d. None of the above is consistent with the logic of efficiency wage theory.

b. Kay pays her workers less than the equilibrium wage so they won't have the time or money to look for work somewhere else.

10. John is a stockbroker. He has had several job offers, but he has turned them down because he thinks he can find a firm that better matches his tastes and skills. Curtis has looked for work as an accountant for some time. While the demand for accountants doesn't appear to be falling, there seems to be more people applying than jobs available. a. John and Curtis are both frictionally unemployed. b. John and Curtis are both structurally unemployed. c. John is frictionally unemployed, and Curtis is structurally unemployed. d. John is structurally unemployed, and Curtis is frictionally unemployed.

c. John is frictionally unemployed, and Curtis is structurally unemployed.

3. Which of the following is correct? a. Labor force = number of employed. b. Labor force = population - number of unemployed. c. Unemployment Rate = number of unemployed / (number of employed + number of unemployed) x 100. d. Unemployment Rate = number of unemployed / adult population x 100.

c. Unemployment Rate = number of unemployed / (number of employed + number of unemployed) x 100.

4. Suppose there are a large number of men who used to work or seek work who now no longer do either. Other things the same, this makes a. the number of people unemployed rise but does not change the labor force. b. the number of people unemployed rise but makes the labor force fall. c. both the number of people unemployed and the labor force fall. d. the number of people unemployed fall but does not change the labor force.

c. both the number of people unemployed and the labor force fall.

7. In 2009, based on concepts similar to those used to estimate U.S. employment figures, the Japanese adult noninstitutionalized population was 110.272 million, the labor force was 65.362 million, and the number of people employed was 62.242 million. According to these numbers, the Japanese labor-force participation rate and unemployment rate were about a. 56.4% and 2.8%. b. 56.4% and 4.8%. c. 59.3% and 2.8%. d. 59.3% and 4.8%

d. 59.3% and 4.8%

5. Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job. She is going to tour around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate a. increases and the labor-force participation rate decreases. b. and the labor-force participation rate both increase. c. increases and the labor-force participation rate is unaffected. d. and the labor-force participation rate are both unaffected.

d. and the labor-force participation rate are both unaffected. explanation: she was considered "NIL" and will still be considered "NIL" until she looks for a job

6. President Bigego is running for re-election against Senator Pander. Bigego proclaims that more people are working now than when he took office. Pander says that the unemployment rate is higher now than when Bigego took office. You conclude that a. one of them must be lying. b. both of them could be telling the truth if the labor force and employment grew at the exact same rate. c. both of them could be telling the truth if the labor force grew slower than employment. d. both of them could be telling the truth if the labor force grew faster than employment.

d. both of them could be telling the truth if the labor force grew faster than employment.

11. Consumers decide to ride bikes more and drive cars less. Bicycle companies expand production while automobile companies fire workers. This is an example of a. frictional unemployment created by sectoral shifts. b. frictional unemployment created by efficiency wages. c. structural unemployment created by efficiency wages. d. structural unemployment created by sectoral shifts.

a. frictional unemployment created by sectoral shifts. explanation: people fired = frictional because they have to find another job

13. Frictional unemployment is inevitable because 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.

16. When a minimum-wage law forces the wage to remain above the level that balances supply and demand, it a. raises the quantity of labor supplied and raises the quantity of labor demanded compared to the equilibrium level. b. raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level. c. reduces the quantity of labor supplied and raises the quantity of labor demanded compared to the equilibrium level. d. reduces the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level.

b. raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level. explanation: higher wage influences people to seek more jobs => increases labor supply & higher wages makes employers want to hire less workers

17. Wages in excess of their equilibrium level help explain a. frictional but not structural unemployment. b. structural but not frictional unemployment. c. both frictional and structural unemployment. d. neither frictional nor structural unemployment

b. structural but not frictional unemployment. explanation: structural unemployment created when wages are paid above equilibrium level of wages

15. Which of the following is not a cause of frictional unemployment? a. the destruction of manufacturing jobs b. a worker leaving a job to find one with better benefits c. minimum-wage laws d. unemployment insurance

c. minimum-wage laws explanation: affects structural unemployment

9. The BLS counts discouraged workers as a. employed. Including them as employed makes the unemployment rate lower than otherwise. b. unemployed. Including them as unemployed makes the unemployment rate higher than otherwise. c. out of the labor force. If they were counted as unemployed the unemployment rate would be higher. d. None of the above is correct.

c. out of the labor force. If they were counted as unemployed the unemployment rate would be higher.

19. When a union raises the wage above the equilibrium level, it a. reduces both the quantity of labor supplied and the quantity of labor demanded. b. reduces the quantity of labor supplied and raises the quantity of labor demanded. c. raises the quantity of labor supplied and reduces the quantity of labor demanded. d. raises both the quantity of labor supplied and the quantity of labor demanded.

c. raises the quantity of labor supplied and reduces the quantity of labor demanded.

1. Who of the following is not included in the Bureau of Labor Statistics' "employed" category? a. those who worked in their own business b. those who worked as unpaid workers in a family member's business c. those waiting to be recalled to a job from which they had been laid off d. those who were temporarily absent from work because of vacation.

c. those waiting to be recalled to a job from which they had been laid off

14. Which of the following does not help reduce frictional unemployment? a. government-run employment agencies b. public training programs c. unemployment insurance d. All of the above help reduce frictional unemployment.

c. unemployment insurance explanation: increases frictional unemployment because people receive benefits until they start another job or 26 weeks is up, receiving free money

8. Suppose that some people report themselves as unemployed when, in fact, they are working in the underground (illegal) economy. If these persons were counted as employed, then a. both the unemployment rate and labor-force participation rate would be higher. b. both the unemployment rate and labor-force participation rate would be lower. c. the unemployment rate would be higher and the labor-force participation rate would be higher. d. the unemployment rate would be lower and the labor-force participation rate would be unaffected.

d. the unemployment rate would be lower and the labor-force participation rate would be unaffected.