Macro Chapter 30
(Figure: Labor Supply and Demand) Refer to the figure. How much will the quantity of labor employed decline as a result of the labor union's action to increase its wage demands to $11 an hour? A) 700 B) 1,100 C) 1,800 D) 2,700
1,800
(Figure: Labor Market) Refer to the figure. If this market is initially in equilibrium when a $10 minimum wage is imposed, the quantity of labor employed will fall by: A) 20. B) 40. C) 60. D) 80.
20
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 underemployment rate? A) 20% B) 25% C) 40% D) 60%
25
(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in the year 2005? A) 1% B) 4.7% C) 2.9% D) 1.9%
4.7?
(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? A) 20% B) 25% C) 50% D) 100%
50
A country has a population of 160 million. Thirty million of its people are under the age of 16 and 10% of the population is either in the military or institutionalized. Seventy million people have jobs, and five million are looking for work. What is the labor force participation rate in this country? A) 52% B) 62% C) 66% D) 70%
66
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? A) 50% B) 66.7% C) 75% D) 83.3%
66.7
(Table: Labor Data) According to the accompanying labor data, the unemployment rate is: A) 7%. B) 0.7%. C) 5.6%. D) 7.5%.
7.5
If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's unemployment rate is: A) 5%. B) 9.1%. C) 10%. D) 11%.
9.1
. In a country where both the labor force participation rate and the unemployment rate are very low, which of the following answers explains why this may be the case? A) A large percentage of the population consists of children. B) A large percentage of the population is aging and thus has retired. C) A large percentage of the population is unemployed. D) A large percentage of the population is employed.
A large percentage of the population is aging and thus has retired.
Structural unemployment is more persistent in France than in the United States because: A) French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher. B) France's labor regulations require a mandatory waiting period before a worker can reapply for a new job. C) American workers have many more job opportunities than French workers. D) labor unions are weaker in France than they are in the United States.
French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher.
Which of the following is a case of cyclical unemployment? A) Glenn quit his job to move to another state. B) Grace is an accountant temporarily unemployed since tax season has ended. C) Garrett lost his job after the company closed during last year's recession. D) Gwyneth is still seeking a job that will use her skills in statistics.
Garrett lost his job after the company closed during last year's recession.
Which of the following is the best example of frictional unemployment? A) John, a coal miner, was laid off because of a lack of demand for workers in his industry. He is looking into new opportunities in computer programming, but they require him to gain some new skills. B) Heather recently graduated with her doctorate in economics. She is searching for a job that matches her skills. C) Peter, a highly skilled construction worker, lost his job when the recession began. He is looking for work, but demand in the construction industry is still low. D) Allison, a recent high school graduate with high aspirations, is seeking a job as the CEO of a Fortune 500 company.
Heather recently graduated with her doctorate in economics. She is searching for a job that matches her skills.
Which of the following is true of the natural unemployment rate? A) It is equal to zero when the economy is not in a recession. B) It has been fixed at 4% during the post-World War II period. C) It is higher if structural or frictional unemployment is higher. D) It can change dramatically within a matter of months.
It is higher if structural or frictional unemployment is higher.
When workers lose their jobs and become officially unemployed, the number of people in the labor force: A) remains constant. B) increases. C) decreases. D) becomes difficult to predict.
It remains constant
Which two nations have a high percentage of older workers participating in the labor force? A) Belgium and France B) Germany and the United States C) Japan and the United States D) Sweden and the Netherlands
Japan and the United States
Which of the following is considered unemployed? A) Jason, a full-time college student, is looking for a part-time job. B) Julie, a full-time housewife, is searching for a part-time position. C) Joe, a retired college professor, does community volunteer work. D) John, on temporary layoff from his work, awaits recall.
John, on temporary layoff from his work, awaits recall.
How might changes in marginal tax rates on married couples affect labor force participation rates? A) Higher marginal tax rates on married couples encourage lower labor force participation rates by the primary income earner. B) Lower marginal tax rates on married couples encourage higher labor force participation rates by the secondary income earner. C) Higher marginal tax rates on married couples encourage higher labor force participation rates by the secondary income earner. D) Lower marginal tax rates on married couples encourage lower labor force participation rates by the secondary income earner.
Lower marginal tax rates on married couples encourage higher labor force participation rates by the secondary income earner.
If the median wage is $9 in country X and $8 in country Y and both countries have similar elasticities of labor supply and demand, then a minimum wage of $4 in both countries will tend to: A) make unemployment higher in country X than in country Y. B) make unemployment higher in country Y than in country X. C) make unemployment the same in both countries. D) have no effect in either country.
Make unemployment higher in country Y than in country X.
A country's total civilian noninstitutionalized adult population is 1 million, and 500,000 people in this country are working, with another 20,000 people looking for work. Which of the following statements about the labor force statistics in this country is accurate? A) The employment rate is 50% and the unemployment rate is 2%. B) The unemployment rate is 2% and the labor force participation rate is 52%. C) The employment rate is 96.15% and the labor force participation rate is 52%. D) The labor force is 500,000 and the labor force participation rate is 50%.
The employment rate is 96.15% and the labor force participation rate is 52%.
Which of the following best describes the effects of a major labor union that maintains a union wage above the market wage? A) The quantity of labor demanded exceeds the quantity of labor supplied, and the unemployment rate increases. B) The quantity of labor demanded exceeds the quantity of labor supplied, and the unemployment rate decreases. C) The quantity of labor supplied exceeds the quantity of labor demanded, and the unemployment rate increases. D) The quantity of labor supplied exceeds the quantity of labor demanded, and the unemployment rate decreases.
The quantity of labor supplied exceeds the quantity of labor demanded, and the unemployment rate increases.
Which of the following is a case of frictional unemployment? A) Timothy is looking for a job where he can apply his expertise in computer programming. B) Terrance is one of more than a dozen applicants for a position teaching high school math. C) Tina was laid off temporarily while her company downsized. D) Thomas recently quit his job to start his own business.
Timothy is looking for a job where he can apply his expertise in computer programming.
A minimum wage is: A) an employment protection law. B) a labor market price ceiling. C) the equilibrium wage in an unskilled labor market. D) a labor market price floor.
a labor market price floor.
According to the textbook, one major reason for the increase in the female labor force participation rate after World War II was: A) an increase in income taxes. B) an increase in the overall population because of the baby boom. C) an increase in the incentive to work. D) a decrease in the male labor force participation rate.
an increase in the incentive to work.?
(Table: Unemployment Statistics for Country X) Using the data in the table, Country X is likely to be in a recession in: A) 1995. B) 2005. C) both 1995 and 2005. D) neither 1995 nor 2005
both 1995 and 2005.
If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $10 in both markets will: A) cause more unemployment among hotel workers than restaurant workers. B) cause more unemployment among restaurant workers than restaurant workers. C) cause the same amount of unemployment in both markets. D) have no effect in either market.
cause more unemployment among restaurant workers than restaurant workers.
Which type of unemployment is likely to be higher when real GDP growth is lower? A) structural unemployment B) frictional unemployment C) cyclical unemployment D) natural unemployment
cyclical unemployment
Higher implicit tax rates tend to cause labor force participation rates to: A) remain constant. B) increase. C) decrease. D) behave unpredictably.
decrease
Several years ago, the rising popularity of Barnes & Noble and Borders shifted workers from independent bookshops to larger chains. What type of unemployment was associated with this reallocation of the work force? A) frictional unemployment B) technological substitution C) creative destruction D) structural unemployment
frictional unemployment
If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $4 in both markets will: A) cause more unemployment among hotel workers than restaurant workers. B) cause more unemployment among restaurant workers than restaurant workers. C) cause the same amount of unemployment in both markets. D) have no effect in either market.
have no effect in either market.
The implicit tax on working is less than 1% in the United States and over 2% in Belgium. Given this, we would expect: A) higher labor force participation in Belgium. B) higher labor force participation in the United States. C) higher unemployment in Belgium. D) higher unemployment in the United States
higher labor force participation in the United States.
If a national government improves its unemployment benefits, its unemployment rate will most likely: A) increase. B) decrease. C) remain the same. D) follow the global trend, regardless of national policy.
increase
The shift toward more of a service economy and less of a manufacturing economy in the United States has caused an increase in: A) frictional unemployment. B) structural unemployment. C) cyclical unemployment. D) seasonal unemployment.
structural unemployment
Which of the following elements reduces structural unemployment? A) the enhancement of worker retraining programs B) the extension of unemployment benefits C) the growth of labor unions D) the existence of employment protection laws
the enhancement of worker retraining programs
Which of the following is NOT true regarding the natural rate of unemployment? A) The natural rate of unemployment equals the sum of the frictional and structural rates. B) If the economy is operating at the natural rate of unemployment, cyclical unemployment is equal to zero. C) The natural rate of unemployment correlates positively with the level of GDP growth in an economy. D) The actual rate of unemployment varies around the natural rate over time.
the natural rate of unemployment is 0% when the US economy is not in a recession
The presence of discouraged workers causes the measured unemployment rate to be: A) correctly stated. B) overstated. C) understated. D) either overstated, understated, or correctly stated.
understand
