Econ exam 2 chapter 10

If an unemployed person quits looking for work, then, eventually the unemployment rate

and the labor-force participation rate both decrease.

if all workers and jobs were the same in that all workers were equally well suited for all jobs, there would be no...

frictional unemployment

Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more workers. The unemployment created by this change is

frictional unemployment caused by sectoral shifts

cyclical unemployment

short-run fluctuations around the natural rate of unemployment

Evidence from research studies by economists...

shows that increased unemployment benefits decrease the job search efforts of the unemployed.

Evidence indicates that the typical person who becomes unemployed will

soon find a job

If there were no factors keeping wages from reaching equilibrium then there would be no...

structural unemployment

someone waiting to be recalled to a job from which they were laid off is considered...

unemployed

frictional unemployment

unemployment due to the process of matching workers and jobs

Union

worker association that bargains with employers over wages, benefits, and working conditions

4 types of efficiency wage theories:

worker health, worker turnover, worker quality, worker effort

natural rate of unemployment

amount of unemployment that the economy normally experiences.

efficiency wages, minimum wage laws, and unions all keep wage levels..

above the equilibrium level, causing a surplus of labor

Efficiency wages

above equilibrium wages paid by firms to increase worker productivity

Unemployment rate =

(Unemployed / labor force) * 100

in 2012, what percentage of men vs. women worked

58% of women, 70% of men

Bob is looking for work after school, but everywhere he fills out an application, the managers say they always have a lot more applications than open positions. Tom has a law degree. Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use.

Bob is structurally unemployed, and Tom is frictionally unemployed

Suppose that bartenders and waiters have no unions. Now suppose that bartenders form a union. What does this do the labor supply and wages of waiters?

Labor supply increases, and wages decrease

in 2012, how many adults were participating in the labor force? how many unemployed?

about 2/3 adult population in labor force, but 8.1% unemployed

unemployment insurance

a government program that partially protects workers' incomes when they become unemployed. average workers get 50% of former wages for 26 weeks

a firm should pay efficiency wages if...

a hiring manager cannot easily judge the quality of applicants, and after workers have worked for the firm a while, they tend to look for other jobs.

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

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

why are more women in labor force now

changing social and political roles and attitudes, increased technology and birth control

According to the theory of efficiency wages, if a firm stops paying efficiency wages it is likely to see a(n)

decrease in the number of job applicants and a decrease in how long workers stay on the job.

Some individuals would like to have a job, but they have given up looking for a job after an unsuccessful search. These individuals are called

discouraged workers and they are not classified by BLS as unemployed

efficiency wage theory

high wages might be profitable because they raise the efficiency of a firm's workers.

Over the past several decades in the United States, the labor-force participation rate of women has

increased, and the labor force participation rate of men has decreased

Labor force participation rate

measures the percent of the adult population that is in the labor force = (labor force / adult population) *100

what is not a cause of frictional unemployment?

minimum wage laws

BLS measures unemployment every...

month, comes from a survey of about 60,000 households

NLRB

national labor relations board, enforces worker' right to unionize

Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as

neither in the labor force nor unemployed

the unemployment rate is

never zero

Unemployed

not employed but available and trying to find work

structural unemployment

number of jobs available aren't sufficient enough to give a job to everyone that wants one

the labor force equals the

number of people employed plus unemployed

unions lower the wages...

of workers in industries without unions

Strike

organized withdrawal of labor from a firm by a union

Employed

paid employees, working own business, working unpaid in family business, both full time and part time

unions...

raise the wages of unionized workers and raise 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

reduce the surplus of labor

Not in the labor force

retirees, discouraged workers, students

frictional unemployment is inevitable because...

sectoral shifts are always happening

Efficiency wages contribute to

structural unemployment and the natural rate of unemployment.

Collective bargaining

the process by which unions and firms agree on the terms of employment

why are less men in the labor force now

they stay in school longer, retire earlier, live longer, stay at home dads