Question 1

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Accepted Answer

Standard economic theory suggests that i...

Question 2

Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

Accepted Answer

Most unemployed people in the economy ar...

Question 3

Table 28-7
Below is data about the labor market in the city of Productionville. 
-Refer to Table 28-7. If the local government imposed a minimum wage of $4 in Productionville, how many people would be unemployed?

Accepted Answer

A)   0
B)   2,000
C)   3,000
D)   10,000E) A) and B)
F) None of the above

Question 4

Which of the following is correct?

Accepted Answer

A)   In the U.S. the natural rate of unemployment is frequently near 2%.
B)   The natural rate of unemployment fluctuates more than the cyclical rate of unemployment.
C)   The cyclical rate of unemployment is sometimes below the natural rate of unemployment.
D)   None of the above is correct.E) B) and C)
F) A) and B)

Question 5

Who would be included in the labor force?

Accepted Answer

A)   Maggie, who plans to work at the newspaper next year when she turns 16 years old.
B)   Lisa, who is unhappy with her current job.
C)   Bart, who is a full-time student and uninterested in finding employment.
D)   None of the above is correct.E) None of the above
F) A) and B)

Question 6

Frictional unemployment is inevitable because the economy is always changing.

Accepted Answer

A) True 
 B)False

Question 7

Table 28-6 
-Refer to Table 28-6. What is the U-6 measure of labor underutilization?

Accepted Answer

A)   8.4%
B)   9.0%
C)   9.2%
D)   35.2%E) B) and D)
F) A) and B)

Question 8

Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force.

Accepted Answer

A)   Both the first and the second fact tend to make the reported unemployment rate lower than otherwise.
B)   Both the first and the second fact tend to make the reported unemployment rate higher than otherwise.
C)   The first fact tends to make the reported unemployment rate higher than otherwise, while the second fact tends to make the reported unemployment rate lower than otherwise.
D)   The first fact tends to make the reported unemployment rate lower than otherwise, while the second fact tends to make the reported unemployment rate higher than otherwise.E) B) and C)
F) A) and D)

Question 9

Sectoral shifts in demand for output

Accepted Answer

A)   create structural unemployment.
B)   immediately reduce unemployment.
C)   increase unemployment due to job search.
D)   do not affect demand for labor.E) All of the above
F) A) and B)

Question 10

The natural rate of unemployment

Accepted Answer

A)   (i)  and (ii)  only
B)   (iii)  only
C)   (i) , (ii) , and (iii) 
D)   None of the above is correct.E) C) and D)
F) None of the above

Question 11

Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable.

Accepted Answer

A) True 
 B)False

Question 12

Figure 28-3 
-Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment will decrease by

Accepted Answer

A)   0 workers.
B)   2,000 workers.
C)   3,000 workers.
D)   4,000 workers.E) B) and C)
F) All of the above

Question 13

The Bureau of Labor Statistics' U­5 measure of joblessness is the official unemployment rate.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate?

Accepted Answer

A)   6.25%
B)   8.3%
C)   9.1%
D)   18.75%E) A) and B)
F) A) and C)

Question 15

Frictional unemployment is inevitable because

Accepted Answer

A)   sectoral shifts are always happening.
B)   there is a federal minimum-wage law in the U.S.
C)   some people do not want to be employed.
D)   unions are very popular in the U.S.E) A) and D)
F) None of the above

Question 16

Economists at the Congressional Budget Office estimated that for 2012, the U.S. natural rate of unemployment was

Accepted Answer

A)   1.5%.
B)   3.0%.
C)   5.5%.
D)   8.5%.E) B) and D)
F) B) and C)

Question 17

If the minimum wage were currently above the equilibrium wage, then a decrease in the minimum wage that kept it above the equilibrium wage would

Accepted Answer

A)   increase the surplus of labor.
B)   reduce the surplus of labor.
C)   increase the shortage of labor.
D)   reduce the shortage of labor,E) A) and D)
F) None of the above

Question 18

Government-run employment agencies and public training programs are operated by the government to try to facilitate job search and reduce unemployment.

Accepted Answer

A)   Almost all economists agree that such programs are of no use.
B)   Almost all economists agree that such programs work very well.
C)   Some economists claim that the government can do these things no better than firms and individuals could do them for themselves.
D)   Some economists claim that these programs increase frictional unemployment.E) A) and D)
F) A) and B)

Question 19

A minimum wage that is below the equilibrium wage rate does not raise unemployment.

Accepted Answer

A) True 
 B)False

Question 20

Table 28-3
2009 Labor Data for Baltivia 
-Refer to Table 28-3. How many people were unemployed in Baltivia in 2009?

Accepted Answer

A)   1,400
B)   1,600
C)   2,000
D)   2,780E) A) and D)
F) B) and C)

Exam 28: Unemployment

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Correct AnswerverifiedStandard economic theory suggests that i...View AnswerShow Answer

Economists at the Congressional Budget Office estimated that for 2012, the U.S. natural rate of unemployment was

Correct AnswerverifiedShow Answer

A minimum wage that is below the equilibrium wage rate does not raise unemployment.

Correct AnswerverifiedShow Answer

Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable.

Correct AnswerverifiedShow Answer

Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force.

Correct AnswerverifiedShow Answer

Table 28-7 Below is data about the labor market in the city of Productionville. -Refer to Table 28-7. If the local government imposed a minimum wage of $4 in Productionville, how many people would be unemployed?

Correct AnswerverifiedShow Answer

Government-run employment agencies and public training programs are operated by the government to try to facilitate job search and reduce unemployment.

Correct AnswerverifiedShow Answer

Frictional unemployment is inevitable because the economy is always changing.

Correct AnswerverifiedShow Answer

Table 28-3 2009 Labor Data for Baltivia -Refer to Table 28-3. How many people were unemployed in Baltivia in 2009?

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Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate?

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Table 28-6 -Refer to Table 28-6. What is the U-6 measure of labor underutilization?

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Sectoral shifts in demand for output

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Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

Correct AnswerverifiedMost unemployed people in the economy ar...View AnswerShow Answer

Who would be included in the labor force?

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Frictional unemployment is inevitable because

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The Bureau of Labor Statistics' U­5 measure of joblessness is the official unemployment rate.

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Which of the following is correct?

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If the minimum wage were currently above the equilibrium wage, then a decrease in the minimum wage that kept it above the equilibrium wage would

Correct AnswerverifiedShow Answer

Figure 28-3 -Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment will decrease by

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The natural rate of unemployment

Correct AnswerverifiedShow Answer

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Standard economic theory suggests that i...
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Most unemployed people in the economy ar...
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Correct Answer
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Correct Answer
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The Bureau of Labor Statistics' U5 measure of joblessness is the official unemployment rate.

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Correct Answer
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Correct Answer
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Correct Answer
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