Question 1

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

Accepted Answer

A)  the civilian,noninstitutional population aged 16 and over.
B)  the population of those aged 16 and over.
C)  the civilian,noninstitutional population of those between age 16 and age 64.
D)  the noninstitutional population of those between ages 16 and 64.E) None of the above
F) All of the above

Question 2

When economists say wages are "sticky," they mean that they:

Accepted Answer

A)  are slow to adjust to changes in the economy,and can cause unemployment.
B)  stick to current market trends,and adjust to equilibrium when changes in the economy occur.
C)  get stuck behind current market trends,and follow a typical two-week lag with changes in the economy.
D)  lead market trends,and other variables will stick to the wage rate and follow it closely.E) B) and C)
F) A) and D)

Question 3

The unemployment rate may:

Accepted Answer

A)  understate the effect of a recession on employment because some leave the labor force.
B)  understate the effect of a recession on employment because many enter the labor force.
C)  overstate the effect of a recession on employment because some leave the labor force.
D)  overstate the effect of a recession on employment because many enter the labor force.E) B) and C)
F) B) and D) A

Question 4

Unemployment insurance could affect unemployment:

Accepted Answer

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

Question 5

The Bureau of Labor Statistics counts underemployed persons as those who:

Accepted Answer

A)  are currently working less than they would like to be.
B)  are currently working in a job for which they are overqualified for.
C)  Both of these are true.
D)  Neither of these is true.E) B) and C)
F) None of the above A

Question 6

An example of a policy that affects the level of unemployment is:

Accepted Answer

A)  minimum wage law.
B)  unemployment insurance.
C)  at-will employment policies.
D)  All of these can affect the level of unemployment.E) A) and B)
F) A) and C)

Question 7

When the prevailing market wage is above equilibrium:

Accepted Answer

A)  the surplus of labor is 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.E) A) and B)
F) A) and C)

Question 8

Carol is a coal miner who just got laid off when the last coal mine in the area was shut down.She has looked everywhere for another job as a miner,but cannot find one.Given that Carol is unlikely to find another job as a miner,she would be considered:

Accepted Answer

A)  frictionally unemployed.
B)  structurally unemployed.
C)  real-wage unemployed.
D)  Carol is a discouraged worker.E) A) and C)
F) C) and D)

Question 9

When the economy swings back toward the boom part of a business cycle:

Accepted Answer

A)  labor demand will increase.
B)  cyclical unemployment will decrease.
C)  actual wages will approach the market-clearing level.
D)  All of these are true.E) C) and D)
F) B) and C)

Question 10

In the United States,the working population does not include:

Accepted Answer

A)  anyone in prison.
B)  anyone in the military.
C)  anyone less than 16 years old.
D)  All of these are true.E) A) and D)
F) All of the above

Question 11

When growth goes down,unemployment tends to go:

Accepted Answer

A)  up shortly after,and vice versa.
B)  down shortly after,and vice versa.
C)  up at the same time,and vice versa.
D)  up at the same time,but remains sticky on the way down and lags behind.E) B) and C)
F) A) and D)

Question 12

The labor supply curve:

Accepted Answer

A)  is made up of firms who want to hire workers at each given wage.
B)  is made up of workers who want to work for firms at each given wage.
C)  does not follow the traditional shape of typical supply curves.
D)  Shows that the number of firms who want to hire workers decreases as the wage increases.E) B) and D)
F) None of the above

Question 13

The labor force participation rate:

Accepted Answer

A)  is measured by the labor force divided by the working-age population.
B)  tells us what fraction of the working-age population wants to be working.
C)  typically falls during periods of recession.
D)  All of these are true.E) B) and C)
F) A) and B)

Question 14

If the minimum wage is set at a level above the equilibrium wage:

Accepted Answer

A)  it will have no effect.
B)  it will be a nonbinding minimum wage.
C)  it could cause unemployment.
D)  All of these are true.E) B) and C)
F) None of the above C

Question 15

It is generally more profitable for a firm to pay workers more than the going wage rate:

Accepted Answer

A)  in sectors where skills are scarce.
B)  in industries in which worker motivation really matters.
C)  in areas in which turnover is very costly.
D)  All of these are true.E) A) and D)
F) None of the above

Question 16

Why don't wages fall so that everyone with the skills and desire gets a job?

Accepted Answer

A)  The government might prevent it,through minimum-wage legislation.
B)  Labor unions might prevent it,through bargaining backed by the threat to strike.
C)  Firms themselves might prevent it,by voluntarily choosing to pay higher wages than necessary.
D)  All of these are reasons why wages may not fall to equilibrium.E) B) and C)
F) B) and D)

Question 17

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

Accepted Answer

A)  higher than it was in the 1950s.
B)  about 21 percent of all wage and salary workers.
C)  just under 15 million Americans.
D)  All of these are true.E) A) and D)
F) B) and C)

Question 18

The labor supply curve:

Accepted Answer

A)  shows the relationship between the total quantity of labor supplied by all workers 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 less will want to work when wages are lower.
C)  has a positive slope.
D)  All of these are true.E) B) and C)
F) A) and D)

Question 19

Policies that make it more difficult to fire an employee are likely to:

Accepted Answer

A)  lead to greater unemployment.
B)  lead to less unemployment.
C)  have no impact on unemployment.
D)  affect those frictionally unemployed more profoundly than other unemployed workers.E) A) and D)
F) A) and C)

Question 20

Some people drop out of the labor force during times of recession:

Accepted Answer

A)  to go back to college,because the opportunity cost is lower during a recession.
B)  because they cannot find work and give up trying.
C)  and decide to take early retirement.
D)  All of these are true.E) A) and D)
F) None of the above

Exam 27: Unemployment and the Demand for Labor

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

Correct AnswerverifiedShow Answer

When economists say wages are "sticky," they mean that they:

Correct AnswerverifiedShow Answer

The unemployment rate may:

Correct AnswerverifiedA

Unemployment insurance could affect unemployment:

Correct AnswerverifiedShow Answer

The Bureau of Labor Statistics counts underemployed persons as those who:

Correct AnswerverifiedA

An example of a policy that affects the level of unemployment is:

Correct AnswerverifiedShow Answer

When the prevailing market wage is above equilibrium:

Correct AnswerverifiedShow Answer

Carol is a coal miner who just got laid off when the last coal mine in the area was shut down.She has looked everywhere for another job as a miner,but cannot find one.Given that Carol is unlikely to find another job as a miner,she would be considered:

Correct AnswerverifiedShow Answer

When the economy swings back toward the boom part of a business cycle:

Correct AnswerverifiedShow Answer

In the United States,the working population does not include:

Correct AnswerverifiedShow Answer

When growth goes down,unemployment tends to go:

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The labor supply curve:

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The labor force participation rate:

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If the minimum wage is set at a level above the equilibrium wage:

Correct AnswerverifiedC

It is generally more profitable for a firm to pay workers more than the going wage rate:

Correct AnswerverifiedShow Answer

Why don't wages fall so that everyone with the skills and desire gets a job?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The labor supply curve:

Correct AnswerverifiedShow Answer

Policies that make it more difficult to fire an employee are likely to:

Correct AnswerverifiedShow Answer

Some people drop out of the labor force during times of recession:

Correct AnswerverifiedShow Answer

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C

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