Question 1

Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more workers. The unemployment created by this change is

Accepted Answer

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

Question 2

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) C) and D)

Question 3

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 4

When a union raises the wage above the equilibrium level,

Accepted Answer

A)   both the quantity of labor supplied and unemployment rise.
B)   both the quantity of labor supplied and unemployment fall.
C)   the quantity of labor supplied rises and unemployment falls.
D)   the quantity of labor supplied falls and unemployment rises.E) A) and B)
F) A) and C)

Question 5

The natural rate of unemployment is the desirable rate of unemployment for an economy.

Accepted Answer

A) True 
 B)False

Question 6

Long-run unemployment arises from a single problem that has a single solution.

Accepted Answer

A) True 
 B)False

Question 7

The destruction of manufacturing jobs and workers leaving their jobs to find better ones both contribute to structural unemployment.

Accepted Answer

A) True 
 B)False

Question 8

Just after World War II, the labor-force participation rate of men was

Accepted Answer

A)   about 33 percent, and in 2012, it was about 50 percent.
B)   about 50 percent, and in 2012, it was about 60 percent.
C)   about 60 percent, and in 2012, it was about 60 percent.
D)   about 90 percent, and in 2012, it was about 70 percent.E) B) and D)
F) B) and C)

Question 9

Suppose that bartenders and waiters have no unions. Now suppose that bartenders form a union. What does this do the labor supply and wages of waiters?

Accepted Answer

A)   Both labor supply and wages increase.
B)   Labor supply increases, and wages decrease.
C)   Labor supply decreases, and wages increase.
D)   Both labor supply and wages decrease.E) A) and C)
F) B) and C)

Question 10

Unions contribute to

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 D)
F) A) and B)

Question 11

The labor-force participation rate measures the percentage of the

Accepted Answer

A)   total adult population that is in the labor force.
B)   total adult population that is employed.
C)   labor force that is employed.
D)   labor force that is either employed or unemployed.E) A) and B)
F) B) and D)

Question 12

Frictional unemployment is often the result of changes in the demand for labor among different firms.

Accepted Answer

A) True 
 B)False

Question 13

Table 28-8
Below is data about the labor market in the state of Northwoods.
 
-Refer to Table 28-8. If the state government imposed a minimum wage of $9, how many people would be unemployed?

Accepted Answer

A)   0
B)   10,000
C)   20,000
D)   40,000E) B) and C)
F) A) and B)

Question 14

When a union bargains successfully with employers, in that industry,

Accepted Answer

A)   both the quantity of labor supplied and the quantity of labor demanded increase.
B)   both the quantity of labor supplied and the quantity of labor demanded decrease.
C)   the quantity of labor supplied increases and the quantity of labor demanded decreases.
D)   the quantity of labor demanded increases and the quantity of labor supplied decreases.E) A) and B)
F) B) and C)

Question 15

Advocates of unions contend that unions are a necessary antidote to the market power of the firms that hire workers and that unions are important for helping firms respond efficiently to workers' concerns.

Accepted Answer

A) True 
 B)False

Question 16

Minimum wages create unemployment in markets where they create a

Accepted Answer

A)   shortage of labor. Unemployment of this type is called frictional.
B)   shortage of labor. Unemployment of this type is called structural.
C)   surplus of labor. Unemployment of this type is called frictional.
D)   surplus of labor. Unemployment of this type is called structural.E) C) and D)
F) B) and C)

Question 17

Suppose that garbage collectors and landscaping workers have no unions. Now suppose that garbage collectors form unions. What does this do the labor supply and wages of landscaping workers?

Accepted Answer

A)   Both labor supply and wages increase.
B)   Labor supply increases, and wages decrease.
C)   Labor supply decreases, and wages increase
D)   Both labor supply and wages increaseE) None of the above
F) B) and C)

Question 18

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) All of the above
F) B) and C)

Question 19

A firm may pay efficiency wages in an attempt to

Accepted Answer

A)   entice workers to work the night shift rather than the day shift.
B)   improve productivity by reducing turnover.
C)   reduce costs by attracting the least-skilled workers to apply for job vacancies.
D)   All of the above are correct.E) A) and B)
F) A) and D)

Question 20

Figure 28-4 
-Refer to Figure 28-4. If the government imposes a minimum wage of $4, how many workers will be unemployed?

Accepted Answer

A)   0
B)   2,000
C)   4,000
D)   6,000E) None of the above
F) A) and B)

Exam 15: Unemployment

Suppose that garbage collectors and landscaping workers have no unions. Now suppose that garbage collectors form unions. What does this do the labor supply and wages of landscaping workers?

Correct AnswerverifiedShow Answer

Frictional unemployment is often the result of changes in the demand for labor among different firms.

Correct AnswerverifiedShow Answer

Suppose that bartenders and waiters have no unions. Now suppose that bartenders form a union. What does this do the labor supply and wages of waiters?

Correct AnswerverifiedShow Answer

Minimum wages create unemployment in markets where they create a

Correct AnswerverifiedShow Answer

The labor-force participation rate measures the percentage of the

Correct AnswerverifiedShow Answer

Table 28-8 Below is data about the labor market in the state of Northwoods. -Refer to Table 28-8. If the state government imposed a minimum wage of $9, how many people would be unemployed?

Correct AnswerverifiedShow Answer

A firm may pay efficiency wages in an attempt to

Correct AnswerverifiedShow Answer

Long-run unemployment arises from a single problem that has a single solution.

Correct AnswerverifiedShow Answer

Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more workers. The unemployment created by this change is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow 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

Just after World War II, the labor-force participation rate of men was

Correct AnswerverifiedShow Answer

Figure 28-4 -Refer to Figure 28-4. If the government imposes a minimum wage of $4, how many workers will be unemployed?

Correct AnswerverifiedShow Answer

The natural rate of unemployment is the desirable rate of unemployment for an economy.

Correct AnswerverifiedShow Answer

When a union bargains successfully with employers, in that industry,

Correct AnswerverifiedShow Answer

The destruction of manufacturing jobs and workers leaving their jobs to find better ones both contribute to structural unemployment.

Correct AnswerverifiedShow Answer

When a union raises the wage above the equilibrium level,

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

Unions contribute to

Correct AnswerverifiedShow Answer

Advocates of unions contend that unions are a necessary antidote to the market power of the firms that hire workers and that unions are important for helping firms respond efficiently to workers' concerns.

Correct AnswerverifiedShow Answer

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According to the theory of efficiency wa...
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