Question 1

Which of the following causes of unemployment is not associated with a wage rate above the market equilibrium level?

Accepted Answer

A)   efficiency wages
B)   job search
C)   minimum-wage laws
D)   unionsE) B) and D)
F) A) and C)

Question 2

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 $8 in Productionville, how many people would be unemployed?
A)  0

Accepted Answer

A)   2,000
B)   5,000
C)   10,000D) A) and A)
E) A) and C)

Question 3

Frictional unemployment can be the consequence of

Accepted Answer

A)   workers leaving existing jobs to find ones they like better.
B)   one industry declining while another is growing.
C)   changes in the working conditions offered by competing firms.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 4

Since the 1940's U.S. union membership has

Accepted Answer

A)   fallen. This decline should have reduced structural unemployment.
B)   fallen. This decline should not have reduced structural unemployment.
C)   risen. This increase should have raised structural unemployment.
D)   risen. This increase should not have raised structural unemployment.E) A) and B)
F) B) and D)

Question 5

The natural rate of unemployment refers to the current unemployment rate.

Accepted Answer

A) True 
 B)False

Question 6

Unemployment insurance

Accepted Answer

A)   may improve the ability of the economy to match workers with appropriate jobs.
B)   reduces the job search efforts of the unemployed.
C)   increases the amount of frictional unemployment in the economy.
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 7

Evidence from research studies by economists

Accepted Answer

A)   shows that increased unemployment benefits decrease the job search efforts of the unemployed.
B)   shows that increased unemployment benefits have virtually no effect on the job search efforts of the unemployed.
C)   shows that increased unemployment benefits increase the job search efforts of the unemployed.
D)   is conflicting on what increased unemployment benefits do to the job search efforts of the unemployed.E) A) and B)
F) A) and C)

Question 8

Which of the following is not correct?

Accepted Answer

A)   The unemployment rate is an imperfect measure of a nation's overall level of economic well­being.
B)   Most job search in the U.S. economy takes place without intervention by the government.
C)   Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well-being.
D)   Other things the same, countries that offer more generous and longer-lasting unemployment insurance benefits are likely to have higher unemployment rates.E) A) and B)
F) C) and D)

Question 9

Frictional unemployment is thought to explain relatively

Accepted Answer

A)   short spells of unemployment, as is structural unemployment.
B)   long spells of unemployment, as is structural unemployment.
C)   short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment.
D)   long spells of unemployment, while structural unemployment is thought to explain relatively short spells of unemployment.E) A) and B)
F) A) and C)

Question 10

Suppose that some country had an adult population of about 46 million, a labor-force participation rate of 75 percent, and an unemployment rate of 8 percent. How many people were unemployed?

Accepted Answer

A)   2.54 million
B)   2.76 million
C)   3.68 million
D)   8 millionE) A) and C)
F) A) and B)

Question 11

When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP than if many of its workers were idle.

Accepted Answer

A) True 
 B)False

Question 12

In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a result, turnover and absenteeism fell and productivity and profits rose.

Accepted Answer

A) True 
 B)False

Question 13

Structural unemployment is often thought to explain relatively long spells of unemployment.

Accepted Answer

A) True 
 B)False

Question 14

When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

Accepted Answer

A) True 
 B)False

Question 15

The unemployment that results from the process of matching workers and jobs is called structural unemployment.

Accepted Answer

A) True 
 B)False

Question 16

The labor-force participation rate equals the percentage of the total adult population that is in the labor force.

Accepted Answer

A) True 
 B)False

Question 17

Table 28-4
2010 Labor Data for Adults (ages 16 and older)  in Meditor 
-Refer to Table 28-4. What is the adult female unemployment rate in Meditor?

Accepted Answer

A)   4.8%
B)   5.0%
C)   7.1%
D)   7.7%E) A) and C)
F) None of the above

Question 18

Wages in excess of their equilibrium level help explain

Accepted Answer

A)   frictional but not structural unemployment.
B)   structural but not frictional unemployment.
C)   both frictional and structural unemployment.
D)   neither frictional nor structural unemployment.E) A) and B)
F) A) and C)

Question 19

Who is included in the labor force by the Bureau of Labor Statistics?

Accepted Answer

A)   Tina, who worked most of the week in a steel factory
B)   Kelly, who is temporarily laid off but expects to be recalled
C)   DJ, who does not have a job but is looking for work
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 20

Which of the following is an example of an efficiency wage?

Accepted Answer

A)   a higher wage paid to a more experienced worker
B)   a below-equilibrium wage paid by a small business exempt from minimum-wage laws
C)   an above-equilibrium wage paid by a firm to reduce turnover costs
D)   a wage tied to participation in a government-sponsored job training programE) C) and D)
F) B) and D)

Exam 28: Unemployment

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 $8 in Productionville, how many people would be unemployed? A) 0

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Suppose that some country had an adult population of about 46 million, a labor-force participation rate of 75 percent, and an unemployment rate of 8 percent. How many people were unemployed?

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Frictional unemployment is thought to explain relatively

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The natural rate of unemployment refers to the current unemployment rate.

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When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP than if many of its workers were idle.

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Wages in excess of their equilibrium level help explain

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Unemployment insurance

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In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a result, turnover and absenteeism fell and productivity and profits rose.

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Which of the following is not correct?

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Which of the following causes of unemployment is not associated with a wage rate above the market equilibrium level?

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Who is included in the labor force by the Bureau of Labor Statistics?

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Which of the following is an example of an efficiency wage?

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Evidence from research studies by economists

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When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

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The unemployment that results from the process of matching workers and jobs is called structural unemployment.

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The labor-force participation rate equals the percentage of the total adult population that is in the labor force.

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Frictional unemployment can be the consequence of

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Structural unemployment is often thought to explain relatively long spells of unemployment.

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Since the 1940's U.S. union membership has

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Table 28-4 2010 Labor Data for Adults (ages 16 and older) in Meditor -Refer to Table 28-4. What is the adult female unemployment rate in Meditor?

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