Employment and Unemployment (CH 20)

Question 1

Define Unemployed

Answer 1

Those able and willing to work that are not employed.

Question 2

Define Underemployed

Answer 2

Those who have a job, but their labour is not used to it’s full productive potential

Question 3

Ways of measuring of unemployment

Answer 3

• The claimont count
• Labour force surveys

Question 4

What is the claimont count?

Answer 4

• Counts no. people claiming unemployment related benefits like job seeking allowance

They have to prove they are actively looking for work

Question 5

What is the labour force survey?

Answer 5

Asks this criteria:
- Been out of work for 4 weeks
- Able + willing to start work within 2 weeks
- Workers available for 1 hour per week

Question 6

Causes of unemployment

Answer 6

Geographical immobility:
- Family
- Social ties
- Financial cost - living costs

• Occupational immobility
  (might find difficult to change job)
• Technological unemployment
• Demand deficiency

Question 7

Impact of unemployment on consumer

Answer 7

Less disposable income and standards of living may fall as a result

Question 8

Impact of unemployment on firms

Answer 8

Firms have a large supply of labour to employ from which causes wages to fall, helping firms reduce costs

Question 9

Impact of unemployment on workers

Answer 9

Waste of workers resources which could also reduce/lose their existing skills if not fully utilised

Question 10

Impact of unemployment on society

Answer 10

• Opportunity cost to society
  (as workers produce G/S if they’re employed)
• Could be negative externalities in form of crime/vandalism if unemployment rates increase