Question 1

One way for governments to try and minimize the effects of structural unemployment is to:

Accepted Answer

A)   provide information to unemployed people about which professions are experiencing rising demand for labor.
B)   subsidize retraining programs for unemployed workers to learn new skills.
C)   offer low-interest loans to unemployed workers to go back to school to learn new skills.
D)   All of these are ways the government can deal with structural unemployment.E) A) and D)
F) All of the above

Question 2

The labor demand curve:

Accepted Answer

A)   shows the relationship between the total quantity of labor demanded by all the firms in the economy and the wage rate.
B)   shows that, all things being equal, firms will want to hire more labor when wages are lower and less labor when wages are higher.
C)   has a negative slope.
D)   All of these are true.E) None of the above
F) C) and D)

Question 3

When the economy slows down the:

Accepted Answer

A)   demand for workers increases.
B)   supply of workers increases.
C)   demand for workers decreases.
D)   supply of workers decreases.E) B) and C)
F) A) and B)

Question 4

One consequence of unemployment is that:

Accepted Answer

A)   some productive potential of the economy is being wasted.
B)   the time and skills of the unemployed are not being put to use.
C)   it can create uncertainty about the future.
D)   All of these are consequences of unemployment.E) B) and C)
F) A) and C)

Question 5

Discouraged workers are people who have:

Accepted Answer

A)   looked for work in the past year but have given up looking because of the condition of the labor market.
B)   not looked for work in the past year but would take a job if one was offered to them.
C)   looked for work in the past year but decided to leave the labor market to go back to school, retire, or be a stay-at-home parent.
D)   not looked for work in over a year because of the condition of the labor market.E) A) and C)
F) None of the above

Question 6

People with less education are:

Accepted Answer

A)   more likely to be unemployed than people with more education.
B)   less likely to be unemployed than people with more education.
C)   just as likely to be unemployed than people with more education.
D)   not comparable to people with more education.E) C) and D)
F) A) and D)

Question 7

Unemployment insurance could affect unemployment by:

Accepted Answer

A)   increasing the equilibrium level of unemployment.
B)   decreasing the amount of frictional unemployment.
C)   changing the incentives of those unemployed and looking for work.
D)   All of these are true.E) A) and B)
F) A) and C)

Question 8

In the United States, the working-age population refers to the:

Accepted Answer

A)   civilian, noninstitutional population aged 16 and over.
B)   population of those aged 16 and over.
C)   civilian, noninstitutional population of those between age 16 and age 64.
D)   noninstitutional population of those between ages 16 and 64.E) All of the above
F) A) and B)

Question 9

The labor supply curve:

Accepted Answer

A)   shows the relationship between the total quantity of labor supplied by all firmsin the economy and the wage rate.
B)   shows that, all things being equal, more workers will want to work when wages are higher and less will want to work when wages are lower.
C)   has a negative slope.
D)   All of these are true.E) A) and B)
F) A) and C)

Question 10

The biggest benefit to members of a union is:

Accepted Answer

A)   being able to bargain as a group.
B)   keeping non-union workers out of their industry.
C)   negotiating minimum wage legislation.
D)   getting raises without having to do any work.E) A) and B)
F) B) and D)

Question 11

The amount of unemployment caused by efficiency wages:

Accepted Answer

A)   has been measured by economists to be minimal.
B)   has been found to be quite large in markets that have mostly minimum-wage workers.
C)   is larger in sectors that have more less-skilled workers in them.
D)   has little conclusive evidence in economic research.E) None of the above
F) A) and B)

Question 12

If the minimum wage is set at a level below the equilibrium wage it:

Accepted Answer

A)   will have a large effect.
B)   would be a nonbinding minimum wage.
C)   would interfere with the market reaching equilibrium.
D)   will probably affect government jobs more than any other job market.E) A) and B)
F) B) and D)

Question 13

A minimum wage is the:

Accepted Answer

A)   lowest wage that a firm is legally allowed to pay its workers.
B)   highest wage that a firm is legally obligated to pay its non-skilled labor.
C)   wage every high school dropout will earn if they are employed.
D)   prevailing wage for low-income workers in a nation.E) B) and D)
F) C) and D)

Question 14

The unemployment rate tells us:

Accepted Answer

A)   what percentage of the labor force wants to work and can't find a job.
B)   who is currently unemployed.
C)   why the unemployed can't find work.
D)   the number of people who really don't want to work.E) A) and B)
F) A) and D)

Question 15

When governments subsidize retraining programs for unemployed workers to learn new skills, they are trying to minimize the effects of which kind of unemployment?

Accepted Answer

A)   Frictional
B)   Structural
C)   Seasonal
D)   Real-wageE) A) and B)
F) B) and C)

Question 16

Which type of unemployment contributes to the natural rate of unemployment?

Accepted Answer

A)   Real-wage unemployment
B)   Cyclical unemployment
C)   Unemployment of government workers.
D)   All of these contribute to the natural rate.E) A) and B)
F) A) and C)

Question 17

Economists believe that lower taxes should reduce unemployment because:

Accepted Answer

A)   people have more incentive to find a job, knowing they will keep more of the income they earn from the job when taxes are low.
B)   people will not want to miss out on the opportunity to keep more of the income they earn when taxes are lower, so they will have an incentive to keep their job and not quit.
C)   people have more incentive to be productive if the money they earn is not being taxed as much when taxes are low.
D)   None of these is true.E) A) and B)
F) A) and C)

Question 18

The number of U.S. workers in unions today is:

Accepted Answer

A)   roughly equivalent to what it was in the 1950s.
B)   about 13%of all wage and salary workers.
C)   just under 15 million Americans.
D)   not something we can estimate due to the lack of information on all people in the labor market.E) C) and D)
F) A) and B)

Question 19

What does the existence of labor unions mean for the labor market and for unemployment?

Accepted Answer

A)   Wage rates could rise above equilibrium level.
B)   Wage rates could fall below equilibrium level.
C)   Unemployment could reach zero.
D)   Unemployment could grow to unsustainable levels.E) None of the above
F) C) and D)

Question 20

The labor force participation rate:

Accepted Answer

A)   tells us what fraction of the working-age population wants to be working, whether or not they actually have a job.
B)   typically rises during times of recession, as more people need work.
C)   is used as an indication of the health of the overall economy.
D)   All of these are true.E) C) and D)
F) A) and C)

Exam 9: Unemployment and the Labor Market

The labor supply curve:

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The unemployment rate tells us:

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The amount of unemployment caused by efficiency wages:

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A minimum wage is the:

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The labor force participation rate:

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Unemployment insurance could affect unemployment by:

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In the United States, the working-age population refers to the:

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People with less education are:

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Discouraged workers are people who have:

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When governments subsidize retraining programs for unemployed workers to learn new skills, they are trying to minimize the effects of which kind of unemployment?

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What does the existence of labor unions mean for the labor market and for unemployment?

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One way for governments to try and minimize the effects of structural unemployment is to:

Correct AnswerverifiedShow Answer

If the minimum wage is set at a level below the equilibrium wage it:

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Economists believe that lower taxes should reduce unemployment because:

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The labor demand curve:

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Which type of unemployment contributes to the natural rate of unemployment?

Correct AnswerverifiedShow Answer

The biggest benefit to members of a union is:

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One consequence of unemployment is that:

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The number of U.S. workers in unions today is:

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When the economy slows down the:

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