Question 1

Measuring the amount of unemployment in the economy is a straightforward task.

Accepted Answer

A) True 
 B)False

Question 2

There is a clear consensus among economists that unions are

Accepted Answer

A)   good for the economy because they result in higher wages for most workers.
B)   good for the economy because they are a necessary antidote to the market power of employers.
C)   bad for the economy because they are cartels and therefore detrimental to an efficient allocation of resources.
D)   None of the above is correct; there is no clear consensus among economists about whether unions are good or bad for the economy.E) B) and C)
F) A) and D)

Question 3

The theory of efficiency wages explains why

Accepted Answer

A)   setting wages at the equilibrium level may increase unemployment.
B)   it may be in the best interest of firms to offer wages that are above the equilibrium level.
C)   the most efficient way to pay workers is to pay them according to their skills.
D)   it is efficient for firms to set wages at the equilibrium level.E) A) and B)
F) A) and C)

Question 4

Noah,the owner of an electronics factory,decides to raise the wages of his workers even though he faces an excess supply of labor.His decision

Accepted Answer

A)   might increase profits if it attracts a better pool of workers to apply for his firm's jobs.
B)   will increase the excess supply of labor.
C)   may increase the quality of his work force.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 5

Within the U.S.,blacks and whites have similar rates of unemployment.

Accepted Answer

A) True 
 B)False

Question 6

The Bureau of Labor Statistics predicts that the number of jobs for dental hygienists will grow faster than most occupations while the number of jobs for bookbinders will decline.This change in the labor market could lead to

Accepted Answer

A)   frictional unemployment created by efficiency wages.
B)   structural unemployment created by efficiency wages.
C)   frictional unemployment created by sectoral shifts.
D)   structural unemployment created by sectoral shifts.E) None of the above
F) All of the above

Question 7

The efficiency-wage theory of worker health is

Accepted Answer

A)   more relevant for explaining unemployment in less developed countries than in rich countries.
B)   more relevant for explaining unemployment in rich countries than in less developed countries.
C)   equally relevant for explaining unemployment in less developed countries and in rich countries.
D)   not relevant for explaining unemployment.E) C) and D)
F) A) and D)

Question 8

People who report being not in the labor force but who,in fact,want to work but have given up trying to find a job after an unsuccessful search cause the reported unemployment rate to be lower than it would otherwise be.

Accepted Answer

A) True 
 B)False

Question 9

Four employers have justified their actions as follows.Whose logic is not consistent with the logic of efficiency wage theory?

Accepted Answer

A)   Jay develops a new assembly line technology that limits the amount of shirking workers can do,so he reduces what he pays his employees so as to make it closer to the equilibrium wage.
B)   Kay pays her workers less than the equilibrium wage so they won't have the time or money to look for work somewhere else.
C)   Ray pays his workers in a developing country more than the going wage hoping that they will get a better diet and so be more productive.
D)   None of the above is consistent with the logic of efficiency wage theory.E) A) and B)
F) All of the above B

Question 10

When a minimum-wage law forces the wage to remain above the level that balances supply and demand,the result is a

Accepted Answer

A)   shortage of labor and a shortage of jobs.
B)   shortage of labor and a surplus of jobs.
C)   surplus of labor and a shortage of jobs.
D)   surplus of labor and a surplus of jobs.E) B) and D)
F) All of the above C

Question 11

The labor-force participation rate is computed as

Accepted Answer

A)   (EmployedAdult Population) 100.
B)   (EmployedLabor Force) 100.
C)   (Labor ForceAdult Population) 100.
D)   (Adult PopulationLabor Force) 100.E) B) and C)
F) C) and D)

Question 12

Even though the difference in labor-force participation rates of U.S.males and females has narrowed,the labor-force participation rate of males remains higher than that of females.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not a reason that paying efficiency wages may increase a firm's profit?

Accepted Answer

A)   Efficiency wages increase worker health and therefore increase worker productivity.
B)   Efficiency wages decrease worker turnover and therefore decrease hiring and training costs.
C)   Efficiency wages decrease worker shirking and therefore increase worker productivity.
D)   Efficiency wages are below the equilibrium wage rate,but still attract a sufficient number of workers.E) A) and D)
F) A) and C)

Question 14

In the U.S.,it is illegal for employers to interfere when workers try to organize unions.

Accepted Answer

A) True 
 B)False

Question 15

The unemployment rate is computed as the number of unemployed

Accepted Answer

A)   divided by the labor force,all times 100.
B)   divided by the number of employed,all times 100.
C)   divided by the adult population,all times 100.
D)   times the labor-force participation rate,all times 100.E) B) and D)
F) B) and C)

Question 16

If all workers and all jobs were the same such that all workers were equally well suited for all jobs,then job search would not be a problem.

Accepted Answer

A) True 
 B)False

Question 17

Policies that reduce the time it takes unemployed workers to find new jobs

Accepted Answer

A)   can reduce both frictional unemployment and the natural rate of unemployment.
B)   can reduce frictional unemployment,but it cannot reduce the natural rate of unemployment.
C)   cannot reduce frictional unemployment,but it can reduce the natural rate of unemployment.
D)   cannot reduce either frictional unemployment or the natural rate of unemployment.E) C) and D)
F) B) and C)

Question 18

Which of the following is correct?

Accepted Answer

A)   Nearly all economists believe that unions are bad for the economy as a whole.
B)   Unionized firms pay wages above the competitive equilibrium level.
C)   Unions increase the level of employment in unionized firms.
D)   Unions decrease the level of employment in firms without unions.E) B) and C)
F) A) and D)

Question 19

Measuring unemployment is the job of the Bureau of Labor Statistics,which is part of the U.S.Department of Commerce.

Accepted Answer

A) True 
 B)False

Question 20

The natural rate of unemployment is constant over time.

Accepted Answer

A) True 
 B)False  False

Exam 20: Unemployment

Measuring the amount of unemployment in the economy is a straightforward task.

Correct AnswerverifiedShow Answer

There is a clear consensus among economists that unions are

Correct AnswerverifiedShow Answer

The theory of efficiency wages explains why

Correct AnswerverifiedShow Answer

Noah,the owner of an electronics factory,decides to raise the wages of his workers even though he faces an excess supply of labor.His decision

Correct AnswerverifiedShow Answer

Within the U.S.,blacks and whites have similar rates of unemployment.

Correct AnswerverifiedShow Answer

The Bureau of Labor Statistics predicts that the number of jobs for dental hygienists will grow faster than most occupations while the number of jobs for bookbinders will decline.This change in the labor market could lead to

Correct AnswerverifiedShow Answer

The efficiency-wage theory of worker health is

Correct AnswerverifiedShow Answer

People who report being not in the labor force but who,in fact,want to work but have given up trying to find a job after an unsuccessful search cause the reported unemployment rate to be lower than it would otherwise be.

Correct AnswerverifiedShow Answer

Four employers have justified their actions as follows.Whose logic is not consistent with the logic of efficiency wage theory?

Correct AnswerverifiedB

When a minimum-wage law forces the wage to remain above the level that balances supply and demand,the result is a

Correct AnswerverifiedC

The labor-force participation rate is computed as

Correct AnswerverifiedShow Answer

Even though the difference in labor-force participation rates of U.S.males and females has narrowed,the labor-force participation rate of males remains higher than that of females.

Correct AnswerverifiedShow Answer

Which of the following is not a reason that paying efficiency wages may increase a firm's profit?

Correct AnswerverifiedShow Answer

In the U.S.,it is illegal for employers to interfere when workers try to organize unions.

Correct AnswerverifiedShow Answer

The unemployment rate is computed as the number of unemployed

Correct AnswerverifiedShow Answer

If all workers and all jobs were the same such that all workers were equally well suited for all jobs,then job search would not be a problem.

Correct AnswerverifiedShow Answer

Policies that reduce the time it takes unemployed workers to find new jobs

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Measuring unemployment is the job of the Bureau of Labor Statistics,which is part of the U.S.Department of Commerce.

Correct AnswerverifiedShow Answer

The natural rate of unemployment is constant over time.

Correct AnswerverifiedFalse

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B

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C

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False