ECON 202 Ch 9 smartbook

If the labor force equals 1,500, the working-age population equals 2,400, then the labor-force participation rate equals % (Round to one decimal place.)

62.5

If the number of unemployed people equals 200, the number of employed people equals 1100, and the working-age population equals 1900, then the labor-force participation rate equals -% (Round to one decimal place.)

68.4

In June of 2013, 11.8 million people were unemployed. If the labor force consisted of 155.3 million people at that same time, the unemployment rate equals -% (Round to one decimal place.)

7.6

Suppose that there are 13.2 million people who are willing and able to work, actively seeking work but not yet working. At the same time there are 149.3 million employed people. 6 million people are not working but have given up looking for work. In this scenario, the unemployment rate equals %- (Round to one decimal place.)

8.1

If the labor-force participation rate equals 64%, the working-age population equals 1700, and the number of unemployed equals 188, then the number of employed people equals _________.

900

Why does the BLS collect unemployment statistics year-round?

To account for any seasonal employment variations

Taxes on wages and worker's rights can affect unemployment rates directly.

True

Which of the following unemployment categories is the "official" unemployment measure?

U3

Which of the following is an example of a lagging indicator?

Unemployment

What occurs in the labor market when the prevailing price (wage) exceeds the equilibrium price (wage)?

Unemployment rises A surplus arises

Which of the following can lead to real-wage unemployment?

Union bargaining

Indicate one reason why wages might not always decrease during an economic slow-down.

Wage stickiness

Define efficiency wages.

Wages set above market rate to increase productivity

Which of the following occupations most likely face seasonal unemployment conditions?

Whitewater rafting guides

Supporters of U.S. minimum wage laws suggest that

minimum wage offers a basic standard-of-living.

The lowest legal wage that employers can pay is called

minimum wage.

Frictional, structural, and real-wage (classical) unemployment compose the _______ rate of unemployment.

natural

Discouraged workers are

not part of the labor force.

Incarcerated or otherwise institutionalized members of the population are

not unemployed.

Suppose Doug loses his job. He is willing and able to work, but he has decided to take one month off before he begins looking for a new job. Doug is

not unemployed.

The presence of unions tends to

push wages up even for non-unionized workers.

A surplus in the labor market exists when

quantity of labor demanded is less than the quantity of labor supplied at a given wage.

When actual wages remain above the equilibrium level, it creates ______.

real-wage unemployment

If the unemployment rate equals 5.4% and there are 9.1 million people who are unemployed, then - million people are employed. (Round to one decimal place.)

159.4

How many households are surveyed in order to collect information contained in the Current Population Survey?

60,000 households

Which of the following statements about unemployment is TRUE?

All economies experience some unemployment regardless of economic strength. The natural rate of unemployment is greater than zero.

Indicate a potential consequence of unemployment.

An economy with diminished productive capacity

Vocational retraining is an appropriate response to which type of unemployment?

Structural

Which government agency determines unemployment statistics?

Bureau of Labor Statistics

What advice is best-suited for a person who is frictionally unemployed?

Continue the job search

A decrease in demand for labor decreases the quantity of labor demanded at all price levels. Assuming the shift in demand is due to a slowing economy, what is the result?

Cyclical unemployment

What is the recognized effect of unemployment insurance?

The effect is ambiguous

People who are working, those who are willing and able to work and actively seeking work, but not yet working, together compose which group?

The labor force

Which of the following are generally affected by unemployment insurance?

The natural rate of unemployment Structural unemployment Frictional unemployment

Why is the simplest labor-market model incomplete?

Due to the existence of unemployment

In 1914, Henry Ford doubled his workers wages in order to cut down on turnover (and the related retraining of new employees) and absenteeism. What is this called?

Efficiency wages

Suppose the federal government expands unemployment insurance such that people who qualify receive 90% of their salary for 2 yrs, assuming they continue to fulfill the requirements of the benefits. Which of the following occurs?

Frictional unemployment may increase or decrease.

Why is the official measure of the unemployment rate not necessarily an accurate depiction of a country's joblessness?

It does not include people who have stopped looking for work

Suppose Jack pays his employees $19.25 per hour at his organic rice packaging plant. He does this even though the market rate for this type of work is only $12.50 per hour. What economic explanation can you give for this?

Jack is trying to increase productivity. Jack is paying an efficiency wage. Jack is increasing the opportunity cost of losing a job at his plant.

In order to be considered unemployed, a person must be considered which of the following?

Not working Actively seeking work Willing and able to work

Which of the following contribute to the natural rate of unemployment?

Real-wage (classical) unemployment Frictional unemployment Structural unemployment

As of 2013, the federal minimum wage was $7.25. Which of the following is correct as it applies to the states?

States can set a minimum wage at any level at or above $7.25.

Suppose you are a "hand-drawn" animator. With the onset of computer-aided animation techniques, your skill set is obsolete and you are unemployed. What type of unemployment does this describe?

Structural

A binding minimum wage is one that is set __________ the equilibrium wage.

above

As a result of wage stickiness,

actual wage exceeds equilibrium wage during recessions.

Unemployment that is caused by short-term changes in the economy is called __________ unemployment.

cyclical

If unions are able to drive wages above equilibrium wage, the short-run result is

cyclical unemployment.

A person who is not working and has stopped looking for work is considered a _________ worker.

discouraged

Unemployment insurance

does not affect the wage rate directly.

In order to maintain worker loyalty and avoid the cost of rehiring and retraining workers, an employer might offer a(n) ___________ wage.

efficiency

In the labor market, the demand for labor comes from

firms

When people are in between jobs, job locations, or careers, they are classified as

frictionally unemployed.

Policies that are designed to protect workers' rights tend to lead to

greater unemployment as employers don't hire workers if they cannot fire them.

The official measure of the unemployment rate is not necessarily an accurate depiction of a country's joblessness because it does not include people who _________ looking for work.

have stopped

In the labor market, the supply of labor comes from

households.

For labor market calculations, the working-age population excludes _____.

incarcerated individuals active military

When employers don't hire workers if they cannot fire them, unemployment can .

increase

The relationship between taxes on wages and unemployment

is direct.

Wilson was fired from his job as a beer taster. Last week he did not search for work but was offered a job loading boxes in a warehouse. He turned it down. Wilson

is not unemployed.

According to the labor demand and supply model, unemployment results if the minimum wage

is set above the equilibrium wage.

When workers assemble formally to bargain with employers for better wages and working conditions, it is called a ________.

labor union

When workers assemble formally to bargain with employers for better wages and working conditions, it is called a(n)

labor union.

Unemployment is what type of economic indicator?

lagging

Wages that are slow to respond to changes in the economy are commonly called

sticky

The ratio of the number of people in the labor force to the number in the working-age population gives us

the labor-force participation rate.

The level of unemployment that prevails in the economy in the long run is called

the natural rate of unemployment.

All things equal, when wage increases,

the quantity of labor demanded decreases.

All things equal, when wage decreases,

the quantity supplied of labor decreases.

Due to the existence of unemployment,

the simplest labor-market model is incomplete.

Civilian, noninstitutionalized members of the population who are at least 16 years old are considered

the working-age population.

Categorize the following groups of people as either U4, U5, or U61. Unemployed + discouraged + marginally attached2. Unemployed + discouraged3. Unemployed + discouraged + marginally attached + underemployed Instructions

u5 u4 u6

A Ph.D economist who has taken a job at a Starbucks coffee shop is generally considered to be

underemployed.

Suppose, due to state budget cuts, a full-time college instructor has her hours reduced half-time status. Certeris paribus, this person is

underemployed.

Depression, hopelessness, and diminished self-worth are all symptoms of

unemployment

The gap between the number of people who want to work at a given wage and the number of available jobs at that wage is called

unemployment

The ratio of unemployed people to those in the labor force tells us the _________.

unemployment rate