Macroeconomics - Unemployment
If wages were always at the competitive equilibrium, there would be absolutely no unemployment. T or F?
F
Paying efficiency wages tends to increase worker turnover because workers can get continually higher wages if they change employer often. T or F?
F
The presence of unemployment insurance tends to decrease the unemployment rate because recipients of unemployment benefits are not counted in the labour force. T or F?
F
The unemployment rate is about the same for the various demographic groups: men, women, people from non-white ethnic backgrounds, people from white ethnic backgrounds, young people, old people. T or F?
F
Some frictional unemployment is inevitable because
there are changes in the demand for labour among different firms.
A minimum wage law tends to
create more unemployment in low-skill job markets than in high-skill job markets.
labour force participants rate
((labour force) / (adult population)) * 100
unemployed rate
((number of unemployed) / (labour force)) * 100
the theory of efficiency wages
- (worker health) - worker turnover - worker effort - worker quality
frictional unemployment
unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills
structural unemployment
unemployment that results because the number of jobs available in some labour markets is insufficient to provide a job for everyone who wants one
A reservation wage is the
minimum wage the worker is willing to accept.
Figure 28-1 Total population 195.4 Adult population 139.7 Number of unemployed 5.7 Number of employed 92.3 Refer to Figure 28-1. The unemployment rate is a. 3.2 percent. b. 5.7 percent. c. 5.8 percent. d. Not enough informa. is available to answer. e. 6.2 percent.
C
Figure 28-1 Total population 195.4 Adult population 139.7 Number of unemployed 5.7 Number of employed 92.3 Refer to Figure 28-1. The labour force is a. 134.0 million. b. none of these answers. c. 92.3 million. d. 139.7 million. e. 98.0 million.
E
Figure 28-1 Total population 195.4 Adult population 139.7 Number of unemployed 5.7 Number of employed 92.3 Refer to Figure 28-1. The labour force participation rate is a. 47.1 percent. b. 65.9 percent. c. 50.2 percent. d. none of these answers. e. 70.2 percent.
E
A minimum wage is likely to have a greater impact on the market for skilled workers than on the market for unskilled workers. T or F?
F
An efficiency wage is like a minimum wage in that firms are required by legislation to pay it. T or F?
F
Due to the existence of discouraged workers, the official unemployment rate may overstate true unemployment. T or F?
F
If the unemployment rate falls, we can be certain that more workers have jobs.
F
Sectoral shifts tend to raise which type of unemployment?
Frictional unemployment
Which of the following statements about efficiency wage theory is true?
Paying above the competitive equilibrium wage may improve worker health, lower worker turnover, improve worker quality, and increase worker effort.
Which of the following government policies would fail to lower the unemployment rate?
Raising the minimum wage
Which one of the following types of unemployment results from the wage being held above the competitive equilibrium wage?
Structural unemployment
A union is a labour cartel. T or F?
T
Firms may voluntarily pay wages above the level that balances the supply and demand for workers because the higher wage improves the average quality of workers that apply for employment. T or F?
T
In the UK over the twenty years from mid-1980s, the labour-force participation rate has been rising for women and has been falling for men. T or F?
T
The natural rate of unemployment is the amount of unemployment that won't go away on its own, even in the long run. T or F?
T
The presence of a union tends to raise the wage for insiders and lower the wage for outsiders. T or F?
T
Unions may increase efficiency in some circumstances because they decrease the cost of bargaining between labour and management. T or F?
T
Whenever the wage rises above the competitive equilibrium, regardless of the source, the result is additional unemployment. T or F?
T
Which of the following statements is true of the UK?
Women tend to have broadly similar unemployment rates as men.
unemployment insurance
a government programme that partially protects workers incomes when they become unemployed
union
a worker association that bargains with employers over wages and working conditions
Which of the following is an example of a reason why firms might pay efficiency wages?
a. At equilibrium wages, workers sleep when the boss is not looking because workers are not deeply concerned about being fired. b. At equilibrium wages, workers often quit to find better jobs. c. At equilibrium wages, only minimally qualified workers apply for the job. d. At equilibrium wages, workers cannot afford a healthy diet so they fall asleep at work due to a lack of energy. e. All of these answers
efficiency wages
above-equilibrium wages paid by firms in order to increase worker productivity
sectoral shifts
changes in the composition of demand among industries or regions
claimant count
claiming unemployment benefit payments from the government
Which of the following types of unemployment will exist even if the wage is at the competitive equilibrium?
frictional unemployment
labour force surveys
going out and asking people questions
Unions tend to increase the disparity in pay between insiders and outsiders by
increasing the wage in the unionized sector, which may create an increase in the supply of workers in the non-unionized sector.
A miner who has been unable to find work for so long that he has stopped looking for work is considered to be
not in the labour force.
According to the Office of National Statistics, a husband who chooses to stay home and take care of the household is
not in the labour force.
labour force
number of employed + number of unemployed
Unions might increase efficiency in the case where they
offset the market power of a large firm that is the dominant employer in a region.
cyclical unemployment
the deviation of unemployment from its natural rate
The amount of unemployment that the economy normally experiences is known as
the natural rate of unemployment.
natural rate of unemployment
the normal rate of unemployment around which the unemployment rate fluctuates
If unemployment insurance were so generous that it paid laid off workers 95 per cent of their regular salary,
the official unemployment rate would probably overstate true unemployment.
strike
the organized withdrawal of labour from a firm by a union
collective bargaining
the process by which unions and firms agree on the terms of employment
job search
the process by which workers find appropriate jobs given their tastes and skills
If, for any reason, the wage is held above the competitive equilibrium wage,
the quantity of labour supplied will exceed the quantity of labour demanded and there will be unemployment.