Chapter 10-Macro

The population of Ectenia is 100 people: 40 work full-time, 20 work half-time but would prefer to work full-time, 10 are looking for a job, 10 would like to work but are so discouraged they have given up looking, 10 are not interested in working because they are full-time students, and 10 are retired. What is the number of unemployed?

a. 10

According to the theory of efficiency wages

a. firms may find it profitable to pay above-equilibrium wages

In June 2009, at the trough of the Great Recession, the Bureau of Labor Statistics announced that of all adult Americans, 140,196,000 were employed, 14,729,000 were unemployed, and 80,729,000 were not in the labor force.. Use this information to calculate: adult population, labor force, labor force participation rate, unemployment rate.

adult population: 235,654,000 (number of employed + number of unemployed + those not in the labor force). labor force: 154,925,000 (number of employed + number of unemployed). labor force participation rate: 65.7% ([labor force/adult population] X 100). unemployment rate: 9.5% ([number of unemployed/labor force] X 100).

Unionized workers are paid about _____ percent more than similar nonunion workers

c. 15%

Advances in healthcare prolong the life of many retirees.

Advances in health care that prolong the life of retirees will not affect the unemployment rate and will lower the employment-population ratio.

A stock market boom induces newly enriched 60-year-old workers to take early retirement.

If a stock market boom induces earlier retirement, the unemployment rate will rise and the employment-population ratio will fall.

An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs.

If an auto company goes bankrupt and its workers immediately begin looking for work, the unemployment rate will rise and the employment-population ratio will fall.

Numerous students graduate from college but cannot find work.

If numerous students graduate from college and cannot find work, the unemployment rate will rise and the employment-population ratio will remain unchanged.

Numerous students graduate from college and immediately begin new jobs.

If numerous students graduate from college and immediately begin new jobs, the unemployment rate will fall and the employment-population ratio will rise.

After an unsuccessful search, some of the laid-off workers quit looking for new jobs.

If some of the unemployed auto workers give up looking for a job, the unemployment rate will fall and the employment-population ratio will remain the same.

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-participation rate. After an unsuccessful job search, Arya gives up looking and retires.

When Arya gives up looking for a job, the unemployment rate decreases because Arya is no longer considered unemployed and has left the labor force and the labor-force participation rate decreases.

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-participation rate. Cersei dies while enjoying retirement.

When Cersei dies while enjoying retirement, there is no effect on the unemployment rate. The labor-force participation rate increases because the adult population decreases.

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-participation rate. Daenerys quits her job to become a stay-at-home mom.

When Daenerys quits her job to be a stay-at-home mom, the unemployment rate increases because the labor force decreases, and the labor-force participation rate decreases because Daenerys is still part of the adult population but is no longer part of the labor force.

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-participation rate. Jaime has a birthday, becomes an adult, and starts looking for a job.

When Jaime becomes an adult and begins looking for work, the unemployment rate increases and the labor-force participation rate increases because the labor force and the adult population both increased by one.

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-participation rate. After a long search, Jon finds a job.

When Jon finds a job after a long search, the unemployment rate decreases and there is no effect on the labor-force participation rate because Jon was and continues to be part of the labor force and the adult population.

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-participation rate. Jorah dies while working long hours at the office.

When Jorah dies working long hours at the office, the unemployment rate increases because the labor force decreases, and the labor-force participation rate decreases because the labor force and the adult population both decreased by one.

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-participation rate. Sansa has a birthday, becomes an adult, but has no interest in working.

When Sansa becomes an adult but does not look for work, there is no effect on the unemployment rate. The labor-force participation rate decreases because Sansa is now part of the adult population but is not part of the labor force.

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-participation rate. Tyrion, a full-time college student, graduates and is immediately employed.

When Tyrion graduates and is immediately employed, the unemployment rate decreases because the labor force increases, and the labor-force participation rate increases because Tyrion was part of the adult population and is now part of the labor force.

The main policy goal of the unemployment insurance system is to reduce the

b. income uncertainty that workers face

In a competitive labor market, when the government increases the minimum wage, the result is a(n) _______ in the quantity of labor supplied and a(n) ______ in the quantity of labor demanded

b. increase, increase

Using the numbers in the preceding question, what is the size of Ectenia's labor force?

c. 70