Question 1

We would expect, all else equal, that _______ on wage income would _______ unemployment.

Accepted Answer

A)   lower taxes; reduce
B)   higher taxes; reduce
C)   taxes; have no effect on
D)   taxes; be negatively related toE) All of the above
F) A) and C)

Question 2

Jennifer has a PhD in economics and has been working for three years as a part-time instructor, but she would like to be hired as a full-time faculty member. Jennifer is best described as:

Accepted Answer

A)   a discouraged worker.
B)   unemployed.
C)   underemployed.
D)   overemployed.E) A) and D)
F) C) and D)

Question 3

Which of the following is true when the prevailing market wage is above equilibrium?

Accepted Answer

A)   The surplus of labor reflects the amount of unemployment in the market.
B)   The difference between the quantity supplied and the quantity of labor demanded is unemployment.
C)   Unemployment occurs.
D)   All of these are true when the market wage is above equilibrium.E) B) and C)
F) A) and D)

Question 4

The table shown displays employment statistics for two years.  What was the labor force participation rate in 2019?

Accepted Answer

A)   70 percent
B)   80 percent
C)   69 percent
D)   26 percentE) None of the above
F) B) and C)

Question 5

The labor supply curve:

Accepted Answer

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

Question 6

Unemployment occurs when someone:

Accepted Answer

A)   wants to work but cannot find a job.
B)   is not working full-time.
C)   should be working but chooses not to.
D)   is not utilizing their full set of skills.E) A) and C)
F) None of the above

Question 7

In terms of supply and demand, unemployment is:

Accepted Answer

A)   a surplus of labor.
B)   a shortage of labor.
C)   an increase in the quantity of labor demanded.
D)   a decrease in the quantity of labor supplied.E) A) and B)
F) None of the above

Question 8

After an economic boom, the new equilibrium wage will be _______ because the labor demand curve shifts to the _______.

Accepted Answer

A)   lower; left
B)   higher; left
C)   lower; right
D)   higher; rightE) C) and D)
F) A) and B)

Question 9

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 have since decided to leave the labor market to go back to school, retire, or be a stay-at-home parent.
D)   spent longer than a year looking for work.E) None of the above
F) B) and D)

Question 10

Liam just quit his job as a librarian to pursue his lifelong dream of becoming a teacher. Liam is:

Accepted Answer

A)   frictionally unemployed.
B)   structurally unemployed.
C)   seasonally unemployed.
D)   not in the labor force.E) A) and D)
F) A) and C)

Question 11

The labor demand curve shows:

Accepted Answer

A)   the number of workers firms want to hire at each given wage.
B)   the number of people who want to work at each given wage.
C)   the number of workers who are willing and able to work at higher wages.
D)   that the number of people who want to work increases as the wage increases.E) None of the above
F) A) and B)

Question 12

There is evidence that the presence of unions in a labor market _______ non-union wage earners in the same market.

Accepted Answer

A)   can increase wages for
B)   can keep wages low for
C)   has no effect on the wages of
D)   can increase employment rates ofE) B) and C)
F) A) and B)

Question 13

Henry Ford offered his employees:

Accepted Answer

A)   a contract promising safer working conditions.
B)   efficiency wages.
C)   minimum wages.
D)   unemployment benefits.E) B) and D)
F) None of the above

Question 14

Which of the following is not an example of an economic policy that affects the level of unemployment?

Accepted Answer

A)   Minimum wage law
B)   Efficiency wages
C)   At-will employment policies
D)   Incentives for underemployed workers to find more gainful employment.E) None of the above
F) C) and D)

Question 15

When the economy slows down:

Accepted Answer

A)   the demand for labor stays the same, then increases as firms expand their operations.
B)   the demand for labor decreases.
C)   the demand for labor stays the same.
D)   the demand for labor increases.E) None of the above
F) B) and C)

Question 16

The pattern of recession and recovery is called:

Accepted Answer

A)   the liquidity cycle.
B)   the business cycle.
C)   structural unemployment.
D)   inflation.E) None of the above
F) All of the above

Question 17

A minimum wage is:

Accepted Answer

A)   the lowest wage a firm is legally allowed to pay its workers.
B)   the wage that firms must pay unionized labor.
C)   what every high school student will earn upon employment.
D)   the national average for wages paid to low-skilled workers.E) A) and B)
F) None of the above

Question 18

The table shown displays employment statistics for two years.  The unemployment rate in 2019 was _______ percentage points _______ than in 2018.

Accepted Answer

A)   3; higher
B)   3; lower
C)   14; higher
D)   11; lowerE) A) and B)
F) A) and C)

Question 19

Weizhe just quit his job as a phone salesman and is looking for work as an accountant. Weizhe is:

Accepted Answer

A)   frictionally unemployed.
B)   structurally unemployed.
C)   cyclically unemployed.
D)   not in the labor force.E) None of the above
F) C) and D)

Question 20

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) C) and D)
F) B) and D)

Exam 9: Unemploymentand the Labor Market

The labor supply curve:

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Jennifer has a PhD in economics and has been working for three years as a part-time instructor, but she would like to be hired as a full-time faculty member. Jennifer is best described as:

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In terms of supply and demand, unemployment is:

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A minimum wage is:

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Henry Ford offered his employees:

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The labor demand curve shows:

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Weizhe just quit his job as a phone salesman and is looking for work as an accountant. Weizhe is:

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The table shown displays employment statistics for two years. The unemployment rate in 2019 was _______ percentage points _______ than in 2018.

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Which of the following is not an example of an economic policy that affects the level of unemployment?

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The pattern of recession and recovery is called:

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Unemployment insurance could affect unemployment by:

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After an economic boom, the new equilibrium wage will be _______ because the labor demand curve shifts to the _______.

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Unemployment occurs when someone:

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When the economy slows down:

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We would expect, all else equal, that _______ on wage income would _______ unemployment.

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Discouraged workers are people who have:

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Which of the following is true when the prevailing market wage is above equilibrium?

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There is evidence that the presence of unions in a labor market _______ non-union wage earners in the same market.

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Liam just quit his job as a librarian to pursue his lifelong dream of becoming a teacher. Liam is:

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The table shown displays employment statistics for two years. What was the labor force participation rate in 2019?

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The table shown displays employment statistics for two years. The unemployment rate in 2019 was _ percentage points _ than in 2018.

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After an economic boom, the new equilibrium wage will be _ because the labor demand curve shifts to the _.

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We would expect, all else equal, that _ on wage income would _ unemployment.

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