Chapter 8

Question 1

Natalia worked part-time for her mother’s business without pay. Tabitha was absent from work because she had strep throat. Who is counted as “employed” by the Bureau of Labor

Answer 1

Both Natalia and Tabitha

Question 2

Suppose that the adult population in the country of Atlantis is 140 million. If 90 million people are employed and 10 million are unemployed, then

Answer 2

40 million are not in the labor force.

Question 3

Matilda loses her job and decides to sit on the beach rather than look for work during the next few months. Other things the same, the unemployment rate

Answer 3

increases, and the labor-force participation rate decreases.

Question 4

Suppose that the Bureau of Labor Statistics reported that there were 62 million people over age 25 whose highest level of education was some college or an associate degree. Of these, 45.3 million were employed and 3.6 million were unemployed. What were the labor-force participation rate and the unemployment rate for this group?

Answer 4

78.9% and 7.4%

Question 5

If the natural rate of unemployment is 4.7 percent and the actual rate of unemployment is 5.5 percent, then by definition there is

Answer 5

cyclical unemployment amounting to 0.8 percent of the labor force.

Question 6

The demand for workers often rises in one region of the U.S. and falls in another. This illustrates

Answer 6

frictional unemployment created by sectoral shifts.

Question 7

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

Answer 7

both wages and unemployment increase.

Question 8

Which of the following is an example of an efficiency wage?

Answer 8

An above-equilibrium wage paid by a firm to reduce turnover costs

Question 9

Evidence from research studies by economists

Answer 9

shows that increased unemployment benefits decrease the job search efforts of the unemployed.