economics chapter 11

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. How many people in this country are in the labor force?

20 million

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's unemployment rate?

25%

Figure: Labor Market) Refer to the figure. What is the unemployment rate in this market as a result of the implementation of a $10 minimum wage?

50%

(Figure: Labor Market) Refer to the figure. What is the number of people who are employed at the market wage? How many people end up unemployed due to the implementation of a $10 minimum wage?

60; 40

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's labor force participation rate?

66.7%

underemployment rate

A Bureau of Labor Statistics measure that includes part-time workers who would rather have a full-time position and people who would like to work but have given up looking for a job

frictional unemployment

A type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs.

Union

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

Which of the following is NOT true of structural unemployment?

It results from industry restructuring. It is persistent over time. It is long-term in duration. ---It results from scarcity of information.

Which of the following is considered unemployed?

John, on temporary layoff from his work, awaits recall.

Which of the following would the U.S. Bureau of Labor Statistics define as a discouraged worker?

Mary, who was laid off last year and who was looking for a full-time job until last month

Which of the following is NOT part of natural unemployment?

cyclical unemployment

Unemployment correlated with the business cycle is called:

cyclical unemployment.

As the baby boomers retire, the U.S. labor force participation rate will:

decrease.

An unemployed person is one who:

does not have a job but is actively looking for one.

Someone who recently moved to Florida because of its warmer climate will need to spend some time looking for a new job. This is an example of:

frictional unemployment.

During recessions the unemployment rate:

increases.

discouraged workers

individuals who would like to work but have given up looking for a job

active labor market policies

like work tests, job search assistance and job retraining programs focus on getting unemployed workers back to work

structural unemployment

long-term unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.

unemployment rate formula

number of unemployed/labor force x 100

Minimum wage laws and unions tend to:

raise wages and raise unemployment

The persistent, long-term unemployment caused by long-lasting shocks or permanent features of an economy is called:

raise wages and raise unemployment.

When workers lose their jobs and become officially unemployed, the labor force participation rate:

remains constant

Frictional unemployment is best defined as:

short-term unemployment caused by difficulties of matching employees to employers.

natural unemployment rate

the rate of structural plus frictional unemployment

cyclical unemployment

unemployment that rises during economic downturns and falls when the economy improves

unemployed

willing and able to work but cannot find a job