Question 1

Labor unions are groups of:

Accepted Answer

A)   employees who join together to bargain with their employer(s)  over salaries and work conditions.
B)   employers who join together to create fair employment packages for employees within a certain geographical area.
C)   employers who petition the government to regulate the safety conditions of certain industries.
D)   employees who petition the government to oversee the employment conditions of employees who work for major corporations.E) B) and C)
F) C) and D)

Question 2

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) B) and D)
F) A) and D)

Question 3

Giving people income through unemployment insurance:

Accepted Answer

A)   allows people to prolong their unemployment until they find a better match.
B)   reduces seasonal employment because people find good matches, and change jobs less often.
C)   creates one effect positive on unemployment.
D)   All of these are true.E) A) and B)
F) A) and C)

Question 4

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)   shows number of firms who are willing and able to hire workers at each given wage.
D)   shows that the number of firms who want to hire workers decreases as the wage increases.E) A) and D)
F) C) and D)

Question 5

Sue just quit her job as a librarian to pursue her lifelong dream of getting a job as a teacher. Sue would be considered:

Accepted Answer

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

Question 6

Which type of unemployment does not contribute to the natural rate of unemployment?

Accepted Answer

A)   Frictional
B)   Structural
C)   Real-wage
D)   CyclicalE) B) and D)
F) All of the above

Question 7

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) C) and D)

Question 8

Jake just quit his job as a shoe salesman and is looking for work as an accountant, which is what his college degree is in. Jake would be considered:

Accepted Answer

A)   frictionally unemployed.
B)   structurally unemployed
C)   cyclically unemployed.
D)   Jake is not in the labor force.E) All of the above
F) A) and D)

Question 9

When governments provide information to unemployed people about which professions are experiencing rising demand for labor, they are trying to minimize the effects of which kind of unemployment?

Accepted Answer

A)   Frictional unemployment
B)   Structural unemployment
C)   Seasonal unemployment
D)   Cyclical unemploymentE) B) and C)
F) A) and D)

Question 10

If minimum wage legislation does cause unemployment, then:

Accepted Answer

A)   those who are lucky enough to land jobs benefit.
B)   those who become unemployed as a result lose.
C)   firms will not bear the entire burden of the higher cost of employment.
D)   All of these are true.E) A) and B)
F) A) and C)

Question 11

Which of the following is not the result of wage stickiness in an economic downturn?

Accepted Answer

A)   Actual wages are temporarily above the market-clearing level.
B)   Cyclical unemployment.
C)   A surplus of labor.
D)   A shortage of labor.E) A) and B)
F) A) and C)

Question 12

Classical unemployment can be caused by which of the following?

Accepted Answer

A)   Minimum wage laws
B)   Bargaining by unions
C)   Efficiency wages
D)   All these create classical unemployment.E) C) and D)
F) None of the above

Question 13

If we wanted to describe unemployment in terms of supply and demand, we could say:

Accepted Answer

A)   there is a surplus of labor.
B)   at the prevailing wage, the demand is greater than the supply of labor.
C)   the quantity of those demanding labor is greater than those supplying labor.
D)   All of these are true.E) B) and D)
F) B) and C)

Question 14

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)   has useful skills that are not being used.E) All of the above
F) A) and B)

Question 15

Marc is a high school graduate and currently works as a corrections officer at a local prison. He would like to go back to school to train to become a police officer someday. The best way to describe Marc is to say he is:

Accepted Answer

A)   a discouraged worker.
B)   unemployed.
C)   underemployed.
D)   employed.E) All of the above
F) B) and D)

Question 16

The business cycle matters for unemployment because:

Accepted Answer

A)   it affects the demand for labor.
B)   it affects the supply of labor.
C)   Both of these are true.
D)   Neither of these is true.E) A) and B)
F) A) and C)

Question 17

Policies designed to protect workers:

Accepted Answer

A)   include minimum wage laws.
B)   include unionization laws.
C)   can lead to unemployment.
D)   All of these are true.E) B) and D)
F) C) and D)

Question 18

Fred was working as a sales rep for a firm, and just completed an MBA by taking courses at night. Fred quits his job to pursue a management position. Fred would be considered:

Accepted Answer

A)   underemployed.
B)   frictionally unemployed.
C)   structurally unemployed.
D)   classically unemployed.E) C) and D)
F) A) and B)

Question 19

Bob just graduated from college and has just landed his first job with a local accounting firm that will start in three months. Bob plans to use that time to find a place to live, and adjust to the new area. Bob would be considered:

Accepted Answer

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

Question 20

Someone who is underemployed is someone who:

Accepted Answer

A)   is working part-time, but wants full-time employment.
B)   is working in a job for which he is overqualified.
C)   could be contributing more output to society by either working more, or by working using more advanced skills he possesses but doesn't currently use.
D)   All of these describe someone who is underemployed.E) A) and B)
F) None of the above

Exam 9: Unemployment and the Labor Market

If minimum wage legislation does cause unemployment, then:

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The labor supply curve:

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Marc is a high school graduate and currently works as a corrections officer at a local prison. He would like to go back to school to train to become a police officer someday. The best way to describe Marc is to say he is:

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Unemployment occurs when someone:

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Policies designed to protect workers:

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Which of the following is not the result of wage stickiness in an economic downturn?

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Giving people income through unemployment insurance:

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If we wanted to describe unemployment in terms of supply and demand, we could say:

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Jake just quit his job as a shoe salesman and is looking for work as an accountant, which is what his college degree is in. Jake would be considered:

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Bob just graduated from college and has just landed his first job with a local accounting firm that will start in three months. Bob plans to use that time to find a place to live, and adjust to the new area. Bob would be considered:

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Sue just quit her job as a librarian to pursue her lifelong dream of getting a job as a teacher. Sue would be considered:

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Labor unions are groups of:

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

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The business cycle matters for unemployment because:

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

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Which type of unemployment does not contribute to the natural rate of unemployment?

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Fred was working as a sales rep for a firm, and just completed an MBA by taking courses at night. Fred quits his job to pursue a management position. Fred would be considered:

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When governments provide information to unemployed people about which professions are experiencing rising demand for labor, they are trying to minimize the effects of which kind of unemployment?

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Someone who is underemployed is someone who:

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Classical unemployment can be caused by which of the following?

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