Econ 111 (Chapter 9)
According to Costco's CEO, Jim Sinegal: "Paying good wages and keeping your people working for you is good business...Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you." What is Costco's CEO referring to?
Efficiency wages
Which of the following describes actual trends in the U.S. labor force participation rate?
The labor force participation rate of adult women has risen since 1950.
The figure on the right shows unemployment rates for demographic groups. The adult unemployment rates apply to persons aged 20 and over who are in the labor force. The teenage unemployment rates apply to persons aged 16 to 19 who are in the labor force. Note that people identified as Hispanic may be of any race. Use the figure to determine which one of the following statements is true:
The unemployment rate of black adults is approximately twice that of white adults.
Which of the following is an example of a worker experiencing cyclical unemployment?
a freightliner employee that got laid off because of the recession of 2007-2009
Which of the following policies would reduce structural unemployment?
a job retraining program
Structural unemployment is the result of
a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.
Cyclical unemployment is the result of
a slowdown in the economy.
A full−time student who is not working is categorized as
not in the labor force.
In August 2015, the U.S. unemployment rate was highest for
African Americans.
Why is the unemployment rate, as measured by the Bureau of Labor Statistics, an imperfect measure of the extent of joblessness in the economy?
It fails to account for illegal activities. Discouraged workers are not considered unemployed. Underemployed people are considered employed. It does not account for inaccurate responses to the Current Population Survey. A: All of the above
An unemployment insurance program has which of the following effects?
It increases the amount of time spent searching for a job.
Since 1948, which of the following best describes the trend in the labor force participation rate
It is decreasing for men and increasing for women.
Which one of the following accurately describes the relationship between frictional unemployment and job search?
People are said to be frictionally unemployed when they are between jobs and searching for new jobs.
Sarah is a full−time student who is not looking for work. What kind of unemployment is Sarah experiencing?
Sarah is not experiencing unemployment of any kind, because she is not currently part of the labor force.
The government of a country is considering increasing the minimum hourly wages by 10 percent. Economists argue that this is going to have a negative effect on employment in the long term. Which of the following, if true, would strengthen the economists' viewpoint?
Several research studies have concluded that increases in the minimum wage are likely to reduce school enrolment among teenagers.
Which of the following would increase the unemployment rate?
an increase in unemployment insurance payments
An efficiency wage is
an above-market wage paid by a firm to maximize worker productivity.
Which of the following policies would reduce frictional unemployment?
building an on−line job database that helps workers find jobs
Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true extent of joblessness?
discouraged workers
Which of the following is an example of cyclical unemployment?
during a recession, aircraft assemblers are laid off but expected to be recalled as the economy improves
The labor force equals the number of people
employed plus unemployed.
A student who just graduated from college but has not found a job would most likely be
frictionally unemployed.
Which of the following would decrease the unemployment rate?
government aid to retrain unemployed workers
An advantage of the establishment survey over the household survey of the labor market is that the establishment survey
is based on actual payrolls, rather than on unverified answers.
The unemployment rate equals the number of unemployed divided by the ________ , all times 100.
labor force
The United States has ________ social insurance programs, and generally has a ________ unemployment rate, as compared to Canada and Western Europe.
less generous; lower
Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wished to work full time were counted as unemployed, the BLS estimates the unemployment rate in August 2015 would have ________ compared to the measured unemployment rate.
more than doubled
Emma is a road construction worker. During the winter months, Emma finds it more difficult to get work. The unemployment Emma experiences in the winter is
seasonal
People who lost their jobs as hand−drawn animators because of the popularity of computer−generated 3D animation are examples of persons who are suffering
structural unemployment.
A headline on an article in the New York Times was "Unemployed in Europe Stymied by Lack of Technology Skills." The unemployed workers referred to in the headline are likely to be
structurally unemployed because there is a mismatch between the skills of workers and the requirements of jobs.
In 2015, JP Morgan Chase announced that it was laying off 5,000 employees. The laid-off employees who were not able to find jobs at another bank due to a permanent decline in demand in the banking industry would be considered
structurally unemployed.
Why do economists believe that setting a goal of zero percent unemployment is not feasible or desirable? Creating a goal of zero percent unemployment for an economy is not feasible nor is it desirable because
the economy needs some short-term unemployment in order to allow for better matching of jobs with workers that possess the proper skill sets.
Frictional unemployment is the result of
the search process of matching workers with jobs.
According to the text, economists consider full employment to occur when
the unemployment rate consists of only frictional and structural unemployment.
Jack lost his job six months ago, and he's been actively looking for a new job ever since. The Bureau of Labor Statistics would classify Jack as
unemployed.
A politician makes the following argument: "The economy would operate more efficiently if frictional unemployment were eliminated. Therefore, a goal of government policy should be to reduce the frictional rate of unemployment to the lowest possible level." Eliminating all frictional unemployment
will not be good for the economy since the presence of frictional unemployment increases economic efficiency.
In 1914, Henry Ford increased the wage he paid workers in his car factory in Dearborn, Michigan to $5 per day. This wage was more than twice as much as other car manufacturers were paying. Ford was quoted as saying: "The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made." Giving workers a raise can result in overall lower costs for a firm if
workers are motivated by higher wages to work harder.
Discouraged workers are
workers who have stopped looking for work because they believe there are no jobs for them.
What are the three main kinds of unemployment?
structural, frictional, and cyclical
