Econ 201 - Billy Lemus - HW21: Ch 21

Please adjust the graph to show the impact of a recession, where the theoretical market equilibrium wage rate falls to $10/h. Then, answer the two questions assuming wages are sticky downward. After the effects of the recession are felt, what is the size of the increase or decrease in unemployment? What is the actual wage rate that predominates in the market?

*Move the demand curve down to where it meets the supply curve at $10* - Increase or decrease in unemployment = 3 M People - $14

1) Who reports the official U.S. unemployment rate? A. the U.S. Bureau of Labor Statistics B. the U.S. Federal Reserve C. the U.S. Treasury Department D. unemployment collection offices 2) How frequently is the survey that determines unemployment released? A. yearly B. quarterly C. monthly D. weekly

1) A. the U.S. Bureau of Labor Statistics 2) C. Monthly

Information concerning the fictitious small island nation of Llamalandia is given in the table. Use the information in the table to answer the related questions. For the percentages, round your answers to two decimal places. # of Employed People: 205,715 # of Unemployed People: 25,283 Population over 16 years old: 525,999 1. What is the size of the labor force? 2. How many people are out of the labor force? 3. What is the unemployment rate? 4. What is the total labor force participation rate?

1. 230,998 2. 295,001 3. 10.95 4. 43.92

The table shows employment statistics for a fictional country. Use the information to answer the questions. Round your percentages to two decimal places. Employed: 5505 Unemployed: 492 Not in Labor Force: 591 1. What is the total labor force? 2. What is the labor force participation rate? 3. What is the unemployment rate? Suppose 246 of the 492 unemployed people have been unemployed for so long that they stop looking for work. 4. What is the new labor force? 5. What is the new labor force participation rate? 6. What is the new unemployment rate?

1. 5997 2. 91.03 3. 8.20 4. 5751 5. 87.30 6. 4.28

Match the definition with the correct type of unemployment. Not all of the terms will be used. 1. Unemployment caused by recessions 2. Unemployment that normally occurs due to turnover as workers switch jobs 3. The unemployment rate that exists when the economy is operating at potential

1. Cyclical Unemployment 2. Frictional Unemployment 3. Natural Unemployment Rate

Identify what type of unemployment each of the individuals faces. 1. James is an architect who has been laid off owing to a slump in the demand for property. He feels he will have to wait until the economy picks up before he can get a new job. 2. Eric is an experienced project manager who lost his job at a tech start-up because the company's product failed to become popular. He is confident he can get a new job and has already rejected a number of offers. 3. Craig lost his job several months ago. He is having a hard time finding a job that pays him more than unemployment insurance does. 4. Sarah is a recent economics graduate who is entering a difficult labor market, due to a severe recession. She is continuing to look for work but is having a hard time getting interviews. 5. Hamid has just graduated as a lawyer from an esteemed law school. He is confident of getting a job and has already refused a few lower‑paying jobs.

1. Cyclical Unemployment 2. Frictional Unemployment 3. Structural Unemployment 4. Cyclical Unemployment 5. Frictional Unemployment

Each of the explanations has been given by economists to explain why wages might be "sticky downward." Please match each term with the appropriate explanation. 1. The belief that employees who earn more will be more productive. Employers who subscribe to this concept believe that employees will have a greater interest in remaining at their current jobs if their wages are higher, so wage is used as a mechanism to reduce turnover and increase the productivity of employees 2. An unofficial agreement between employers and their workers. Employers will try to not reduce wages during hard economic times, and workers agree to not expect huge salary increases when the economy or business is doing well. 3. The idea that cutting wages for workers who are already part of the organization is counterproductive because they are needed to help the business run smoothly. 4. Most workers are willing to accept a wage decrease as long as all other people also experience the same kind of decrease, but will strongly resist wage cuts otherwise. 5. Firms often decide which employees to fire or lay off in order to keep the best workers rather than implement an across‑the‑board wage cut that would likely drive away the most valuable employees.

1. Efficient wage theory 2. Implicit contract 3. Insider-outsider model 4. Relative wage coordination 5. Adverse selection of wage cuts

Please label each of the hypothetical individuals with the term that best describes him or her. Each term is used once. 1. Lily is a recent economics college graduate and has started her first job as a business analyst. 2. Mason, a machinist in a coal mine, had a freak accident loading coal, which left him severely disabled. He has since been released from his employment with a severance package for life,but he would like to continue to work. Months pass and he gets no offers, despite his stellar resume. Mason gave up on the job hunt four weeks ago. 3. Olivia has a PhD in economics, but due to the severe recession, has a hard time finding a job.She takes a part-time job as a consultant, but would prefer a full-time gig so that she can have insurance benefits. 4. Chloe, age 1717, is a full-time student and has no interest in working. 5. Fred, a computer programmer, recently quit his job at Vurve due to the onset of carpal tunnel syndrome and is now trying to find a new job that will not hurt his wrists as much. He is confident, as many startups are hiring.

1. Employed 2. Discouraged Worker 3. Underemployed 4. None of these terms apply 5. Unemployed

Select the term that best describes the employment status of people in the scenarios. 1. Anna Conda is currently on a hiking vacation in the Amazon jungle from her part‑time job as a herpetologist at the San Diego Zoo. ____________ 2. Bill Loney does not have a job nor does he intend to look for one. ________ 3. Brighton Early is a student. He has no job outside of the home but spends five hours each week mowing the lawn and maintaining his yard. He is happy with his situation and is not looking for more work. _________ 4. Bonnie Ann Clyde has not had any work at all for six months despite the fact that she has been filling out at least eight job applications each day. ______

1. Employed 2. Out of Labor Force 3. Out of Labor Force 4. Unemployed

The table describes hypothetical employment statistics in the United States in a given year. The labor force is the sum of those that are employed plus the unemployed. Labor Force: 170 M Full-time Workers/Part-Time: 140 M Underemployed: 7 M Discouraged Workers: 5 M

140 + 7 = 147 147/170 x 100 = 86.47 100-86.47 = 13.53 =13.53

Which is true if a nation is currently experiencing full employment? A. Only structural unemployment exists. B. Every person who wants a job is able to find a job. C. 5% of the population is without a job. D. The rate of cyclical unemployment is 0%.

D. The rate of cyclical unemployment is 0%

Consider two economic regions, region A and region B. If region A has strict union protection laws present, while region B lacks union protection laws, we can expect that region A will have __________ unemployment rate compared to region B holding all else constant. A. A higher B. About the same C. A lower

A. A higher

Which individual is out of the labor force? A. Robert is without a job, is able to work, but is not actively looking for work. B. Madison is working 10 hours per week. C. Jacob is working 40 hours per week. D. Patricia is without a job, is able to work, and is actively looking for work.

A. Robert is without a job, is able to work, but is not actively looking for work.

The hypothetical data in the table below displays the percentage that unemployment benefits replace take-home pay for workers in different countries. Belgium: 1st Year: 75% - 2nd Year: 70% - 3rd Year: 61% Finland: 1st Year: 70% - 2nd Year: 60% - 3rd Year: 55% Italy: 1st Year: 54% - 2nd Year:50% - 3rd Year: 22% Australia: 1st Year: 40% - 2nd Year: 25% - 3rd Year: 10% Which country would you expect to have the lowest long-term unemployment rate?

Australia

Which of the choices is most directly related to cyclical unemployment? A. an increased use of the Internet for job searches B. recessions C. an increase in the number of new college graduates looking for work D. the age distribution of the country

B. Recessions

The natural rate of unemployment equals: A. frictional unemployment plus discouraged workers. B. frictional unemployment plus cyclical unemployment. C. cyclical unemployment plus structural unemployment. D. structural unemployment minus cyclical unemployment. E. frictional unemployment plus structural unemployment.

E. Frictional unemployment plus structural unemployment.

The overall population for Region A is 90 million people. The labor force contains 43 million people, 26 million people are employed, and 17 million are unemployed. What is the unemployment rate? Round your answer to two decimals. Unemployment Rate = Unemployed/Labor Force x 100

Population: 90 M Labor Force: 43 M Employed: 26 M Unemployed: 17 M Unemployment Rate = 17/43 x 100 = 39.53

Classify each statement about the U.S. unemployment rate as true or false.

True: - The behavior of the unemployment rate is related to the business cycle - It is very likely that an unemployment rate of 0% will never be observed False: - The end of the 20th century saw some of the highest unemployment rates in history - Unemployment generally remains stable and static over time - Changes in technology and new workers joining the workforce have contributed to an overall upward trend in the unemployment rate