Chp. 9 HW Questions

Which of the following is true regarding wage​ rigidity? A. It usually causes the quantity of labor demanded to be greater than the quantity of labor supplied. B. It occurs when wages are held fixed above the competitive equilibrium level. C. It results in frictional unemployment. D. All of the above.

It occurs when wages are held fixed above the competitive equilibrium level.

Which of the following does not cause the labor supply curve to​ shift? A. Shifts in the labor demand curve that cause a change in the wage rate B. Changing opportunity cost of time. C. Changes in the level of immigration D. Changing tastes regarding employment

Shifts in the labor demand curve that cause a change in the wage rate

Anthony owns a landscaping business that has 4 employees. His company is able to earn revenue of​ $600 per day. He knows that if he hires another​ worker, he would have to pay that worker​ $50 per day and the company would earn revenue of​ $680 per day if the new worker is hired. Determine the value of the marginal product of labor of the employee that Anthony is considering hiring. A. $30 B. $80 C. $680 D. $50

$80

The equation for unemployment rate is?

(Unemployed/Labor Force) x 100%

Suppose that in January there were 6,000,000 workers in the labor​ force, with 5,604,000 employed and 396,000 ​unemployed, implying a 6.6 percent unemployment rate. A month​ later, there were 6,200,000 workers in the labor​ force, with 5,779,000 employed and 421,000 unemployed.​ (Notice the number employed went from 5,604,000 to 5,779,000​, an increase of​ 175,000.) What is the unemployment rate in February?

6.79%

In February​ 2014, the United States added​ 175,000 jobs to the economy. Given this​ information, what can we say about the unemployment rate of the​ country? A. It may​ increase, decrease, or not change depending on how many people started searching for jobs during the month. B. It will not​ change, since the number of new jobs in the economy has no impact on the unemployment rate. C. It must​ decrease, since as more jobs are added to the​ economy, the​ country's overall unemployment rate falls. D. It will​ increase, since an increase in the number of jobs will always result in an increase in the unemployment rate.

A. It may increase, decrease, or not change depending on how many ppl started searching for jobs during the month.

The BLS officially classifies a person as being employed​ ____________. A. if that person holds either a​ part-time or​ full-time paid job. B. only if that person has worked full time over the previous week. C. when a person has worked at the same job for one year continuously. D. if that person holds a paid job or may not be working but has looked for work in the previous week.

A. if that person holds either a part-time or full-time paid job.

Structural unemployment can be caused by​ ____________. A. labor unions B. efficiency wages C. imperfect information by workers and firms D. all of the above. E. A and B only.

A. labor unions B. efficiency wages (A and B only)

Which of the following is NOT one of the factors that can increase wage rigidity in the labor​ market? A. Collective bargaining B. An increase in the time needed to search for available jobs C. Efficiency wages D. Worker resistance to a decline in wages

An increase in the time needed to search for available jobs

would you describe unemployment as a leading or lagging indicator of an economic​ downturn? A. ​Leading, since the unemployment rate increases during recessions and then decreases a few years after the recession. B. ​Lagging, since in every recession the unemployment rate did not peak until very late into the​ recession, or in some​ cases, after the recession. C. ​Leading, since every time there is a recession there is high unemployment leading up to it. D. Both leading and lagging. For some of the recent​ recessions, unemployment peaked before the recession and for others it peaked after the recession.

B. Lagging, since in every recession the unemployment rate did not peak until very late into the recession, or in some cases, after the recession.

The labor supply curve is derived from the concept that​ ____________. A. as wages​ increase, the opportunity cost of leisure​ decreases, leading people to work fewer hours. B. as wages​ increase, the opportunity cost of leisure​ increases, leading people to work more hours. C. as wages​ increase, the opportunity cost of leisure​ decreases, leading people to work more hours. D. as prices​ increase, the opportunity cost of leisure​ increases, leading people to work fewer hours.

B. as wages increase, the opportunity cost of leisure increases, leading people to work more hours.

Which of the following is NOT true regarding the natural rate of​ unemployment? A. The natural rate is calculated by averaging the unemployment rate over an extended time period. B. The natural rate of unemployment is 0 percent when the U.S. economy is not in a recession. C. The natural rate of unemployment does not include cyclical unemployment. D. The natural rate includes both frictional and structural unemployment.

B. the natural rate of unemployment is 0% when the US economy is not in a recession

In April​ 2012, the Bazanian​ Daily, a leading newspaper in the country of​ Bazania, carried a report titled​ "20,000 jobs added in the last​ quarter; unemployment rate shoots up from 5 percent to 6.7​ percent." How could the unemployment rate in Bazania increase even when new jobs were​ created? A. Only government jobs are counted in the official unemployment rate.​ So, if the​ 20,000 new jobs were not government​ jobs, then they will not have any impact on the overall unemployment rate. B. The new jobs may have made discouraged workers optimistic enough to start applying for​ jobs, thus​ re-entering the labor force and being counted as​ unemployed, which causes the overall unemployment rate to increase. C. Government jobs are not counted in the official unemployment rate.​ So, if the​ 20,000 new jobs were government​ jobs, then they will not have any impact on the overall unemployment rate. D. Since the unemployment rate equals the number of unemployed multiplied by the labor​ force, when​ 20,000 new jobs are​ added, it causes the labor force to​ increase, which increases the unemployment rate.

B. the new jobs may have made discouraged workers optimistic enough to start applying for jobs, thus re-entering the labor force and being counted as unemployed, which causes the overall unemployment rate to increase.

Which of the following is an example of what economists refer to as job​ search? A. A person who applies for a​ high-paying job but does not​ qualify, so she begins searching for an appropriate position. B. People that engage in the job hunt by sending out resumes. C. An individual that engages in the job hunt by determining who is hiring and how much they pay. D. All of the above.

all of the above

Which of the following factors does NOT cause a shift in the labor demand​ curve? A. Changes in the wage rate. B. Changes in output prices. C. Changing input prices. D. Changing technology.

changes in the wage rate (A)

The goal of a country with a healthy economy is to have​ ____________ equal to zero. A. the overall unemployment rate. B. cyclical unemployment. C. frictional unemployment. D. all of the above.

cyclical unemployment

When there are changes that improve the quality and value of leisure time, the supply of labor will​ ____________. A. increase and shift to the right B. increase and move up along the curve C. decrease and move down along the curve D. decrease and shift to the left

decrease and shift to the left

Alex is a full time student that works as a waiter on the weekends at Chili's. John has not responded to interview requests from banks but applied to be a realtor last week. We know that Alex is _______ and John is ______. A. in the labor force; in the labor force B. in the labor force; not in the labor force C. not in the labor force; in the labor force D. not in the labor force; not in the labor force

in the labor force; in the labor force (A)

When there is an increase in population​, the supply of labor will​ ____________. A. decrease and move down along the curve B. increase and shift to the right C. decrease and shift to the left D. increase and move up along the curve

increase and shift to the right

The value of the marginal product of labor is the​ ____________. A. market value of a​ worker's additional output for a firm. B. cost to a firm of hiring an additional worker. C. change in output from hiring an additional worker. D. value that workers place on labor relative to leisure.

market value of a worker's additional output for a firm (A)

In​ general, we find that unemployment rates are lower among​ ____________ workers since the opportunity cost of their time spent not working is​ ____________. A. less​ educated; lower. B. more​ educated; higher. C. less​ educated; higher. D. more​ educated; lower.

more educated; higher (B)

The labor supply curve shows that the quantity of labor supplied will increase as________. This results in a labor supply curve that is _______.

wages increase upward sloping

Structural unemployment is the unemployment that arises​ ____________. A. during recessions when the unemployment rate is above the natural rate B. from the average of the unemployment rates over an extended period of time. C. from workers' imperfect information about available jobs D. when wage rigidity creates a persistent gap between labor supply and labor demand

when wage rigidity creates a persistent gap between labor supply and labor demand

Potential workers are classified as being unemployed when​ ____________. A. they do not have a paid​ job, have looked for work in the previous 4​ months, and are available for work. B. they want a​ full-time job and instead have a​ part-time job or are not working at all. C. they do not have a paid​ job, have looked for work in the previous 4​ weeks, and are available for work. D. they do not have a paid job and are currently not available for work.

C. they do not have a paid job, have looked for work in the previous 4 weeks, and are available for work.

What other reasons might explain why unemployment is lower among workers with a relatively higher level of​ education? A. More educated workers have a higher opportunity cost of time. B. More educated workers have more human capital. C. Workers with a higher level of education are in greater demand by firms. D. All of the above.

D. all the above

What type of unemployment does job search lead​ to? A. Structural unemployment. B. Frictional unemployment. C. Cyclical unemployment. D. Search unemployment.

Frictional unemployment (B)

Which of the following best explains why the labor supply curve slopes​ upward? A. When the output that a firm produces​ increases, the opportunity cost of hiring another worker increases. B. When the wage rate​ increases, the number of employees that a firm wants to hire increases. C. When the price of a good​ increases, firms get more value out of each worker and thus seek to hire more workers. D. When wages​ increase, the opportunity cost of not working​ increases, leading people to seek more work hours.

When wages increase, the opportunity cost of not working increases, leading people to seek more work hours.

The fundamental difference between those who are unemployed and those classified as not being in the labor force is that the latter are not __________.

actively searching for work

The fact that unemployment is lower among workers with a relatively higher level of education can be explained in part by the __________.

principle of optimization