chapter 15 t/f

unemployment insurance

a government program that partially protects the incomes of workers who become unemployed

union

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

efficiency wages

above-equilibrium wages paid by firms to increase worker productivity

a minimum wage is likely to have a greater impact on the market for skilled workers than on the market for unskilled workers.

false, a minimum wage has a greater impact on low-wage workers.

an efficiency wage is like a minimum wage in that firms are required by legislation to pay it.

false, efficiency wages are paid voluntarily by firms.

paying efficiency wages tends to increase worker turnover because workers can get continually higher wages if they "job hop".

false, efficiency wages reduce turnover.

due to the existence of "discouraged workers", the official unemployment rate may overstate true unemployment.

false, the official unemployment rate may understate true unemployment.

if the unemployment rate falls, we can be certain that more that more workers have jobs.

false, the unemployment rate falls when unemployment workers leave the labor force.

if wages were always at the competitive equilibrium, there would be absolutely no unemployment.

false, there would still be frictional unemployment.

the unemployment rate is about the same for the various demographic groups: men, women, black, white, young, old.

false, unemployment differs across demographic groups.

the presence of unemployment insurance tends to decrease the unemployment rate because recipients of unemployment benefits are not counted in the labor force.

false, unemployment insurance increases the unemployment rate because it increases frictional unemployment.

cyclical unemployment

the deviation of unemployment from its natural rate

natural rate of unemployment

the normal rate of unemployment around which the unemployment rate fluctuates

collective bargaining

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

labor force

the total number of workers, including both the employed and unemployed

a union is a labor cartel

true

advocates of unions argue that unions may increase efficiency in some circumstances because they decrease the cost of bargaining between labor and management.

true

firms may voluntarily pay wages above the level that balances the supply and demand for workers because the higher wage improves the average quality of workers that apply for employment.

true

in post-World War II United States, the labor-force participation rate has been rising for women and has been falling for men.

true

the natural rate of unemployment is the amount of unemployment that won't go away on its own, even in the long run

true

the presence of a union tends to raise the wage for insiders and lower the wage for outsiders.

true

whenever the wage rises above the competitive equilibrium, regardless of the source, the result is additional unemployment.

true

frictional unemployment

unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills

structural unemployment

unemployment that results because the number of jobs available in some labor markets is insufficient to provided a job for everyone who wants one