Quest 3
33. Refer to Table 28-8. If the state government imposed a minimum wage of $8, how many people would be unemployed?
a. 0
10. Which of the following is an example of the "brain drain?"
a. A country's most highly educated workers emigrate to rich countries.
24. Sirius has just finished high school and started looking for his first job, but has not yet found one. Other things the same, the unemployment rate
a. and the labor-force participation rate both increase.
26. Suppose that some country had an adult population of about 50 million, a labor-force participation rate of 60 percent, and an unemployment rate of 5 percent. How many people were unemployed?
b. 1.5 million
40. Which of the following is an example of an efficiency wage?
b. an above-equilibrium wage offered by a firm to attract a more talented pool of job applicants
22. The deviation of unemployment from its natural rate is called
b. cyclical unemployment.
13. Suppose a country increases trade restrictions. This country would be pursing an
b. inward policy, which most economists believe has adverse effects on the economy.
21. The amount of unemployment that an economy normally experiences is called the
b. natural rate of unemployment.
3. The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called
b. physical capital
15. An increase in a country's population may contribute to the rate of technological progress because a larger population
c. brings with it more scientists, inventors, and engineers.
27. Compared to the labor market in the United States in 1950, the male labor force participation rate has _______ and the female labor force participation rate has ________.
c. decreased; increased
23. Jamarcus works part-time as a pizza delivery person in a college town. The Bureau of Labor Statistics counts Jamarcus as
c. employed and in the labor force.
1. One can argue that the average American today is "richer" than the richest American 100 years ago, given that 100 years ago,
c. many of the goods and services that we now take for granted were not available.
11. Which of the following statements is correct?
a. In an economy-wide sense, property rights are an important prerequisite for the price system to work. b. Property rights give people the ability to exercise authority over the resources they own. c. Based on the available evidence, the existence of well-established and well- enforced property rights appears to be associated with an enhanced standard of living. d. All of the above are correct.
16. All else equal, which of the following would tend to cause real GDP per person to rise?
a. a change from inward-oriented policies to outward-oriented c. b. policies an increase in investment in human capital c. strengthening of property rights. d. All of the above are correct.
37. When a union raises the wage above the equilibrium level,
a. both the quantity of labor supplied and unemployment rise.
38. When a union bargains successfully with employers, in that industry,
a. both wages and unemployment increase.
18. Countries with more economic freedom tend to have
a. high levels of income per capita. b. lower rates of poverty. c. longer life expectancies. d. all of the above.
19. Investment coming in from other countries
a. increases the economy's stock of capital. b. leads to higher productivity and higher wages. c. is especially good for poor countries that cannot generate enough saving to fund investment projects themselves. d. all of the above.
39. Susan market wages are low, she decides to raise the wages of her workers. Her decision is a plant manager in charge of a factory in a relatively poor country. Even though
a. might increase profits if it means that the wage is high enough for her workers to eat a nutritious diet that makes them more productive.
12. Suppose that a new government is elected in Eurnesia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting. These changes will probably
a. raise real GDP per person and productivity in Eurnesia.
32. Minimum-wage laws
a. reduce unemployment. b. cause labor shortages, which further raise wages above equilibrium. c. affect highly-educated workers more than high school dropouts. d. None of the above is correct.
5. After adjusting for inflation, over time the prices of most natural resources have been
a. steady or falling, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling.
2. Living standards around the world ____________ from country to country and small differences in growth rates have a __________ effect on living standards over time.
a. vary greatly; large
7. "When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement
b. is consistent with the view that capital is subject to diminishing returns.
6. One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. It requires that society
b. sacrifice consumption goods and services now in order to enjoy more consumption in the future.
14. Malthus predicted that the power of population
b. was greater than the power of the earth to produce subsistence. His forecast was off the mark.
20. Which of the following institutions promote economic growth?
c. Property rights.
8. Refer to Figure 25-1. The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?
c. Returns to capital become increasingly smaller as the amount of capital per worker increases.
Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor country to catch up?
c. The poor country has poorly developed property rights.
28. In the United States, which education level has the lowest unemployment rate?
c. bachelor's degree or higher.
30. Suppose the demand for hard-wood flooring increases, while the demand for wall-to-wall carpeting decreases. Based on this change in consumer tastes, the demand for hard-wood- flooring factory workers in North Carolina increases, while the demand for carpet factory workers in Georgia decreases. This is an example of
c. frictional unemployment created by sectoral shifts.
9. The logic behind the catch-up effect is that
c. new capital adds more to production in a country that doesn't have much capital than in a country that already has much capital.
29. The Bureau of Labor Statistics counts discouraged workers as
c. out of the labor force. If they were counted as unemployed the unemployment rate would be higher.
31. Which of the following does not help reduce frictional unemployment?
c. unemployment insurance
Refer to Figure 28-4. If 12,000 workers are unemployed, then the minimum wage must be
d. $16.
36. Refer unemployed? to Figure 28-5. If the minimum wage is set at $125, how many workers will be
d. 25.
34. Refer to Table 28-8. If the state government imposed a minimum wage of $10, how many people would be unemployed?
d. 40,000
25. In 2015 the Japanese adult non-institutionalized population was 110.7 million, the labor force was 66 million, and the number of people employed was 63.7 million. According to these numbers, the Japanese labor-force participation rate and unemployment rate were about
d. 59.6% and 3.5%
4. Which of the following best illustrates the human capital of a survivor stranded on an island?
d. her previous training in a survival course
How do we calculate unemployment rate?
𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑚𝑒𝑛𝑡 𝑅𝑎𝑡𝑒 = 100 ∗ # 𝑜𝑓 𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑 𝐿𝑎𝑏𝑜𝑟 𝐹𝑜𝑟𝑐𝑒
How do we calculate labor force?
𝐿𝑎𝑏𝑜𝑟 𝐹𝑜𝑟𝑐𝑒 = 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 + 𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑
How do we calculate labor force participation rate?
𝐿𝑎𝑏𝑜𝑟 𝐹𝑜𝑟𝑐𝑒 𝑃𝑎𝑟𝑡𝑖𝑐𝑖𝑝𝑎𝑡𝑖𝑜𝑛 𝑅𝑎𝑡𝑒 = 100 ∗ 𝐿𝑎𝑏𝑜𝑟 𝐹𝑜𝑟𝑐𝑒 𝐴𝑑𝑢𝑙𝑡 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
