Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The invention of the telegraph led to the loss of jobs for those who had delivered mail by horse but created jobs for telegraph operators and delivery persons. This is an example of

Accepted Answer

A)   structural unemployment created by efficiency wages.
B)   structural unemployment created by sectoral shifts.
C)   frictional unemployment created by efficiency wages.
D)   frictional unemployment created by sectoral shifts.E) A) and D)
F) B) and D)

Question 3

If the wage is kept above the equilibrium wage for any reason, the result is structural unemployment.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not correct?

Accepted Answer

A)   When a union is present in a labor market, wages are determined by the equilibrium of supply and demand.
B)   Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.
C)   The process by which unions and firms agree on the terms of employment is called collective bargaining.
D)   Most workers in the U.S. economy are not members of a union.E) A) and B)
F) A) and C)

Question 5

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the result is a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 6

Figure 28-7 
-Refer to Figure 28-7. Without a minimum wage, what is the equilibrium level of employment? Explain what happens to the level of employment if the minimum wage is equal to $125.

Accepted Answer

Without a minimum wage, employ...

Question 7

Table 28-11
2010 Labor Data for Tajnia
 
-Refer to Table 28-11. The total adult population of Tajnia in 2010 is 30,000.

Accepted Answer

A) True 
 B)False

Question 8

The reported unemployment rate should be viewed as

Accepted Answer

A)   a useful but imperfect measure of joblessness.
B)   clearly smaller than the true unemployment rate.
C)   clearly larger than the true unemployment rate.
D)   being very close to the true unemployment rate.E) C) and D)
F) All of the above

Question 9

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 10

The labor force equals the sum of the employed and the unemployed.

Accepted Answer

A) True 
 B)False

Question 11

Minimum-wage laws and unions are similar to each other but different from efficiency wages in that minimum-wage law and unions

Accepted Answer

A)   cause unemployment, but efficiency wages do not.
B)   cause the quantity of labor supplied to exceed the quantity of labor demanded, but efficiency wages do not.
C)   cause wages to be above the equilibrium level.
D)   prevent firms from lowering wages in the presence of a surplus of workers.E) C) and D)
F) A) and D)

Question 12

Consider two labor markets in which jobs are equally attractive in all respects other than the wage rate. All workers are equally able to do either job. Initially, both labor markets are perfectly competitive. If a union organizes workers in one of the markets, then the wage rates will tend to

Accepted Answer

A)   rise in both markets.
B)   fall in both markets
C)   rise for the union jobs, but remain unchanged for the nonunion jobs.
D)   rise for the union jobs and fall for the nonunion jobs.E) A) and B)
F) All of the above

Question 13

Advocates of government-run employment agencies and public training programs believe they make job search more efficient.

Accepted Answer

A) True 
 B)False

Question 14

Figure 28-6 
Refer to Figure 28-6. What type of unemployment is measured by the differences between lines A and B?

Accepted Answer

cyclical u...

Question 15

A person who is not employed and claims to be trying hard to find a job but really is not trying hard to find a job is

Accepted Answer

A)   counted as out of the labor force but should be counted as unemployed.
B)   counted as unemployed but should be counted as out of the labor force.
C)   correctly counted as out of the labor force.
D)   correctly counted as unemployed.E) B) and C)
F) A) and C)

Question 16

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

Accepted Answer

According to the theory of efficiency wa...

Question 17

In 2012, the U.S. natural rate of unemployment was estimated to be about 5.5 percent, which at the time was below the actual rate of unemployment of about 8.1 percent.

Accepted Answer

A) True 
 B)False

Question 18

More than 3 percent of U.S. workers leave their jobs in a typical month.

Accepted Answer

A) True 
 B)False

Question 19

A firm might offer efficiency wages so its workers will eat a more nutritious diet and therefore be healthier and more productive.

Accepted Answer

A) True 
 B)False

Question 20

Minimum-wage laws are one reason there is always some unemployment in the U.S. economy.

Accepted Answer

A) True 
 B)False

Exam 10: Unemployment and Its Natural Rate

If the wage is kept above the equilibrium wage for any reason, the result is structural unemployment.

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A firm might offer efficiency wages so its workers will eat a more nutritious diet and therefore be healthier and more productive.

Correct AnswerverifiedShow Answer

The invention of the telegraph led to the loss of jobs for those who had delivered mail by horse but created jobs for telegraph operators and delivery persons. This is an example of

Correct AnswerverifiedShow Answer

In 2012, the U.S. natural rate of unemployment was estimated to be about 5.5 percent, which at the time was below the actual rate of unemployment of about 8.1 percent.

Correct AnswerverifiedShow Answer

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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The reported unemployment rate should be viewed as

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Which of the following is not correct?

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Figure 28-7 -Refer to Figure 28-7. Without a minimum wage, what is the equilibrium level of employment? Explain what happens to the level of employment if the minimum wage is equal to $125.

Correct AnswerverifiedWithout a minimum wage, employ...View AnswerShow Answer

Table 28-11 2010 Labor Data for Tajnia -Refer to Table 28-11. The total adult population of Tajnia in 2010 is 30,000.

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The labor force equals the sum of the employed and the unemployed.

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Minimum-wage laws are one reason there is always some unemployment in the U.S. economy.

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Figure 28-6 Refer to Figure 28-6. What type of unemployment is measured by the differences between lines A and B?

Correct Answerverifiedcyclical u...View AnswerShow Answer

Consider two labor markets in which jobs are equally attractive in all respects other than the wage rate. All workers are equally able to do either job. Initially, both labor markets are perfectly competitive. If a union organizes workers in one of the markets, then the wage rates will tend to

Correct AnswerverifiedShow Answer

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

Correct AnswerverifiedAccording to the theory of efficiency wa...View AnswerShow Answer

Advocates of government-run employment agencies and public training programs believe they make job search more efficient.

Correct AnswerverifiedShow Answer

More than 3 percent of U.S. workers leave their jobs in a typical month.

Correct AnswerverifiedShow Answer

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the result is a surplus of labor.

Correct AnswerverifiedShow Answer

Minimum-wage laws and unions are similar to each other but different from efficiency wages in that minimum-wage law and unions

Correct AnswerverifiedShow Answer

A person who is not employed and claims to be trying hard to find a job but really is not trying hard to find a job is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Without a minimum wage, employ...
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cyclical u...
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According to the theory of efficiency wa...
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