Question 1

Table 28-2
Labor Data for Aridia 
-Refer to Table 28-2. The unemployment rate of Aridia in 2012 was

Accepted Answer

A)  6.25%.
B)  11.1%.
C)  12.5%.
D)  56.25%.E) A) and B)
F) C) and D)

Question 2

Cyclical unemployment

Accepted Answer

A)  has a different explanation than does the natural rate of unemployment.
B)  refers to the year-to-year fluctuation in unemployment around an economy's natural rate of unemployment.
C)  is closely associated with short-run ups and downs of economic activity.
D)  All of the above are correct.E) A) and B)
F) None of the above

Question 3

Which of the following is not correct?

Accepted Answer

A)  Frictional unemployment results from the process of matching workers and jobs.
B)  Structural unemployment results when the number of jobs is insufficient for the number of workers.
C)  Minimum wages are the predominant reason for unemployment in the U.S. economy.
D)  When a minimum-wage law forces the wage to remain above the level that balances supply and demand, it raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level.E) B) and D)
F) None of the above

Question 4

When a union raises the wage above the equilibrium level, it reduces the quantity of labor supplied and raises the quantity of labor demanded, resulting in unemployment.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  5
B)  4
C)  3
D)  2E) All of the above
F) A) and B)

Question 6

Unions are often thought to cause conflict between different groups of workers -- between the insiders who benefit from high union wages and the outsiders who do not get the union jobs.

Accepted Answer

A) True 
 B)False

Question 7

Unemployment insurance causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.

Accepted Answer

A) True 
 B)False

Question 8

Retirees are included in the Bureau of Labor Statistics' "not in the labor force" category.

Accepted Answer

A) True 
 B)False

Question 9

To maintain their standard of living, most people rely on

Accepted Answer

A)  government assistance.
B)  their personal savings.
C)  their labor earnings.
D)  rental income.E) A) and B)
F) C) and D)

Question 10

If all workers and all jobs were the same such that all workers were equally well suited for all jobs, then there would be no

Accepted Answer

A)  cyclical unemployment.
B)  frictional unemployment.
C)  natural rate of unemployment.
D)  structural unemployment.E) A) and B)
F) A) and C)

Question 11

Unions

Accepted Answer

A)  and firms paying wages above equilibrium to improve worker effort both create frictional unemployment.
B)  create frictional unemployment, while firms paying wages above equilibrium to improve worker effort create structural unemployment.
C)  create structural unemployment, while firms paying wages above equilibrium to improve worker effort create frictional unemployment.
D)  and firms paying wages above equilibrium to improve worker effort both create structural unemployment.E) B) and D)
F) A) and D)

Question 12

How are discouraged workers counted in the unemployment rate?

Accepted Answer

Because discouraged workers ar...

Question 13

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 they cannot reduce the natural rate of unemployment.
C)  cannot reduce frictional unemployment, but they can reduce the natural rate of unemployment.
D)  cannot reduce either frictional unemployment or the natural rate of unemployment.E) None of the above
F) A) and B)

Question 14

In the 1990's Ireland made unemployment benefits less generous. This change would likely have reduced

Accepted Answer

A)  both structural unemployment and the natural rate of unemployment.
B)  structural unemployment but not the natural rate of unemployment.
C)  both frictional unemployment and the natural rate of unemployment.
D)  frictional unemployment but not the natural rate of unemployment.E) A) and B)
F) A) and C)

Question 15

Every week, the Bureau of Labor Statistics produces data on unemployment.

Accepted Answer

A) True 
 B)False

Question 16

Sheila is on a temporary layoff from her automobile factory job but has not looked for work in the last four weeks. The Bureau of Labor Statistics counts Sheila as

Accepted Answer

A)  unemployed and in the labor force.
B)  unemployed and not in the labor force.
C)  employed and in the labor force.
D)  employed and not in the labor force.E) B) and C)
F) B) and D)

Question 17

The Bureau of Labor Statistics' U-3 measure of joblessness is the official unemployment rate.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Most economists believe unions are bad for the economy as a whole.

Accepted Answer

A) True 
 B)False

Question 20

Figure 28-3 
-Refer to Figure 28-3. If unemployment is 2,000 workers, then the minimum wage must be

Accepted Answer

A)  $4.
B)  $5.
C)  $7.
D)  $8.E) All of the above
F) A) and B)

Exam 28: Unemployment and Its Natural Rate

Every week, the Bureau of Labor Statistics produces data on unemployment.

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Retirees are included in the Bureau of Labor Statistics' "not in the labor force" category.

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To maintain their standard of living, most people rely on

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

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Figure 28-3 -Refer to Figure 28-3. If unemployment is 2,000 workers, then the minimum wage must be

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The Bureau of Labor Statistics' U-3 measure of joblessness is the official unemployment rate.

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How are discouraged workers counted in the unemployment rate?

Correct AnswerverifiedBecause discouraged workers ar...View AnswerShow Answer

Which of the following is not correct?

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Unions are often thought to cause conflict between different groups of workers -- between the insiders who benefit from high union wages and the outsiders who do not get the union jobs.

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If all workers and all jobs were the same such that all workers were equally well suited for all jobs, then there would be no

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Unions

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Most economists believe unions are bad for the economy as a whole.

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In the 1990's Ireland made unemployment benefits less generous. This change would likely have reduced

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

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Unemployment insurance causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.

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Cyclical unemployment

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Table 28-2 Labor Data for Aridia -Refer to Table 28-2. The unemployment rate of Aridia in 2012 was

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When a union raises the wage above the equilibrium level, it reduces the quantity of labor supplied and raises the quantity of labor demanded, resulting in unemployment.

Correct AnswerverifiedShow Answer

Sheila is on a temporary layoff from her automobile factory job but has not looked for work in the last four weeks. The Bureau of Labor Statistics counts Sheila as

Correct AnswerverifiedShow Answer

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

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Because discouraged workers ar...
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Standard economic theory suggests that i...
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