Question 1

Table 28-1
Sample Population 
-Refer to Table 28-1. How many in the sample are in the labor force?

Accepted Answer

A)  11
B)  10
C)  9
D)  8E) B) and C)
F) A) and D)

Question 2

Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job. She is going to tour around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate

Accepted Answer

A)  increases, and the labor-force participation rate decreases.
B)  and the labor-force participation rate both increase.
C)  increases, and the labor-force participation rate is unaffected.
D)  and the labor-force participation rate are both unaffected.E) B) and D)
F) C) and D)

Question 3

Unions

Accepted Answer

A)  do not affect the natural rate of unemployment.
B)  lower the wages of unionized workers.
C)  raise the profits of unionized firms.
D)  lower the wages of workers in industries without unions.E) None of the above
F) All of the above

Question 4

The unemployment rate equals the percentage of the labor force that is unemployed.

Accepted Answer

A) True 
 B)False

Question 5

Unemployment insurance

Accepted Answer

A)  reduces search effort which raises unemployment.
B)  reduces search effort which lowers unemployment.
C)  increases search effort which raises unemployment.
D)  increases search effort which decreases unemployment.E) A) and D)
F) A) and C)

Question 6

When a minimum-wage law forces the wage to remain above the equilibrium level, the result is

Accepted Answer

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

Question 7

Which of the following is correct?

Accepted Answer

A)  In unionized industries, wages are below the level that would prevail in competitive markets.
B)  The introduction of a union in an industry reduces the quantity of labor demanded in that industry, causes some workers in that industry to be unemployed, and reduces wages in the rest of the economy.
C)  There is a strong consensus among economists that unions are bad for the U.S. economy.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 8

Table 28-2
Labor Data for Aridia 
-Refer to Table 28-2. The unemployment rate of Aridia in 2011 was

Accepted Answer

A)  20%.
B)  31.6%.
C)  46.2%.
D)  63.3%.E) A) and B)
F) A) and C)

Question 9

According to the theory of efficiency wages, firms operate more efficiently if wages are above the equilibrium level.

Accepted Answer

A) True 
 B)False  True

Question 10

Which of the following is not an explanation for the existence of unemployment in the long run?

Accepted Answer

A)  it takes time for workers to search for the jobs that are best suited for them
B)  minimum-wage laws
C)  unions
D)  the business cycleE) B) and C)
F) C) and D)

Question 11

If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is

Accepted Answer

A)  cyclical unemployment amounting to 0.5 percent of the labor force.
B)  frictional unemployment amounting to 0.5 percent of the labor force.
C)  structural unemployment amounting to 0.5 percent of the labor force.
D)  search unemployment amounting to 0.5 percent of the labor force.E) B) and C)
F) A) and D)

Question 12

More than one-third of the unemployed are recent entrants into the labor force.

Accepted Answer

A) True 
 B)False  True

Question 13

Table 28-11
2015 Labor Data for Tajnia 
-Refer to Table 28-11. The labor-force participation rate of Tajnia in 2015 is about 40.8 percent.

Accepted Answer

A) True 
 B)False

Question 14

Table 28-11
2015 Labor Data for Tajnia 
-Refer to Table 28-11. The unemployment rate of Tajnia in 2015 is about 18.4 percent.

Accepted Answer

A) True 
 B)False

Question 15

Figure 28-2 
-Refer to Figure 28-2. What do the two lines in the figure measure?

Accepted Answer

A)  The top line is the labor force participation rate, and the bottom line is the unemployment rate.
B)  The top line is the labor force participation rates of the college-educated population, and bottom line is the labor force participation rates of the high-school-educated population.
C)  The top line is the foreign labor force participation rate, and the bottom line is the domestic labor force participation rate.
D)  The top line is the labor force participation rates of men, and the bottom line is the labor force participation rates of women.E) B) and D)
F) All of the above

Question 16

Within the U.S. population, blacks of prime working age (ages 25-54) have higher rates of unemployment than whites of prime working age (ages 25-54), regardless of gender.

Accepted Answer

A) True 
 B)False

Question 17

Figure 28-4
​ 
-Refer to Figure 28-4. If 12,000 workers are unemployed, then the minimum wage must be

Accepted Answer

A)  $4.
B)  $6.
C)  $14
D)  $16.E) A) and B)
F) A) and C) D

Question 18

Minimum-wage laws

Accepted Answer

A)  create unemployment.
B)  do not apply in states with right-to-work laws.
C)  affect highly-educated workers more than high school dropouts.
D)  cause labor shortages, which further raise wages above equilibrium.E) A) and D)
F) C) and D)

Question 19

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Accepted Answer

A) True 
 B)False

Question 20

Suppose that efficiency wages become more common in the economy. Imposing efficiency wages

Accepted Answer

A)  increases the quantity demanded and decreases the quantity supplied of labor.
B)  decreases the quantity demanded and increases the quantity supplied of labor.
C)  decreases the quantity demanded and decreases the quantity supplied of labor.
D)  increases the quantity demanded and increases the quantity supplied of labor.E) C) and D)
F) None of the above

Exam 28: Unemployment and Its Natural Rate

Table 28-1 Sample Population -Refer to Table 28-1. How many in the sample are in the labor force?

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Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job. She is going to tour around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate

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Unions

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The unemployment rate equals the percentage of the labor force that is unemployed.

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Unemployment insurance

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When a minimum-wage law forces the wage to remain above the equilibrium level, the result is

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Which of the following is correct?

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Table 28-2 Labor Data for Aridia -Refer to Table 28-2. The unemployment rate of Aridia in 2011 was

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According to the theory of efficiency wages, firms operate more efficiently if wages are above the equilibrium level.

Correct AnswerverifiedTrue

Which of the following is not an explanation for the existence of unemployment in the long run?

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If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is

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More than one-third of the unemployed are recent entrants into the labor force.

Correct AnswerverifiedTrue

Table 28-11 2015 Labor Data for Tajnia -Refer to Table 28-11. The labor-force participation rate of Tajnia in 2015 is about 40.8 percent.

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Table 28-11 2015 Labor Data for Tajnia -Refer to Table 28-11. The unemployment rate of Tajnia in 2015 is about 18.4 percent.

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Figure 28-2 -Refer to Figure 28-2. What do the two lines in the figure measure?

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Within the U.S. population, blacks of prime working age (ages 25-54) have higher rates of unemployment than whites of prime working age (ages 25-54), regardless of gender.

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Figure 28-4 ​ -Refer to Figure 28-4. If 12,000 workers are unemployed, then the minimum wage must be

Correct AnswerverifiedD

Minimum-wage laws

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Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

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Suppose that efficiency wages become more common in the economy. Imposing efficiency wages

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True

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True

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Figure 28-4 -Refer to Figure 28-4. If 12,000 workers are unemployed, then the minimum wage must be

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D

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