unemployment and whatnot Flashcards
What occurs when the number of workers who are able and willing to work exceeds the number of jobs available?
Unemployment
Unemployment is defined as the situation where the supply of labor exceeds the demand for labor in the labor market.
Define the term ‘Labour Force’.
Those who are employed or willing, able, and actively seeking jobs
This includes individuals who are currently working and those who are looking for work.
What is the ‘Labour Force Participation Rate’ (LFPR)?
The proportion of adult population who are economically active
LFPR is calculated as (Labour Force / Working Age Population) x 100.
Calculate the Unemployment Rate if 20 million are unemployed and the Labour Force is 150 million.
13.33%
Unemployment Rate = (Number of Unemployed / Labour Force) x 100.
What are the four main types of unemployment in an economy?
- Cyclical unemployment
- Structural unemployment
- Frictional unemployment
- Seasonal unemployment
Each type has different causes and implications for the economy.
What causes cyclical unemployment?
Lack of demand for goods and services during economic slowdown
This type of unemployment is directly related to the business cycle.
What is structural unemployment?
Caused by a mismatch of skills of workers required for jobs
This often occurs when industries evolve and require different skill sets.
What is frictional unemployment?
Caused by search time required by workers to enter or change jobs
This type is often temporary as individuals transition between jobs.
What is seasonal unemployment?
Caused by routine changes in the demand for certain kinds of labour
Examples include agricultural workers during harvest seasons.
True or False: The unemployment rate includes discouraged workers who have stopped searching for jobs.
False
Discouraged workers are not counted in the unemployment rate.
List the personal costs of unemployment.
- Loss of income
- Loss of skills
- Low self-esteem
- Psychological stress
These costs can have long-lasting effects on individuals.
Identify a social cost of unemployment.
Rising crime rate
Unemployment can lead to increased social issues, including crime and unrest.
What is one way to reduce unemployment?
Enhance the availability of information
Providing platforms for job seekers to find vacancies can help reduce unemployment.
What does the labour market equilibrium refer to?
The point where labour demand equals labour supply
At this point, there is no excess supply or demand for labor.
Why is the labour supply curve upward sloping?
Higher wages incentivize workers to supply more labour
This reflects the relationship between wage levels and the quantity of labor supplied.
What happens when there is a surplus of labour?
Unemployment arises
This occurs when the quantity of labor supplied exceeds the quantity of labor demanded.
What is labour market equilibrium?
The point where the quantity of labour demanded by firms equals the quantity of labour supplied by workers.
What occurs when there is a labour surplus?
Unemployment arises due to an excess quantity of labour supplied.
What is a tight labour market?
A situation where the quantity of labour demanded exceeds the quantity of labour supplied, leading to a labour shortage.
How do wage rate changes affect the labour market?
They cause a movement along the labour demand or supply curve, or both.
What happens when the wage rate is set at $4?
The quantity of labour demanded by firms exceeds the quantity supplied, creating a tight labour market.
What happens when the wage rate is set at $8?
The quantity of labour supplied exceeds the quantity demanded, resulting in a labour surplus.
What non-wage factors can affect labour demand?
- Rise in consumer demand for products
- Economic downturns leading to reduced production
How can population increases affect labour supply?
An increase in population results in a rightward shift of the labour supply curve.
What is minimum wage?
A legally mandated price floor on hourly wages, effective only if set above the market wage rate.
What is the effect of setting minimum wage above equilibrium wage?
More workers are willing to supply labour than firms are demanding, resulting in unemployment.
What happens to the labour market if there is a shortage of labour due to migration?
The equilibrium wage rate increases and the quantity of labour decreases.
What is full employment?
An economic state where all existing resources are utilized to produce at potential GDP, with no cyclical unemployment.
Does full employment mean zero unemployment?
No, there will always be some frictional and structural unemployment.
What is the natural rate of unemployment?
The level of unemployment that exists even when the economy is at full employment, due to frictional and structural factors.
What are the consequences of operating at point C on the PPF?
- Loss of income
- Skills degradation
- Low self-esteem
- High anxiety and depression
What is cyclical unemployment?
Unemployment that results from economic downturns or recessions.
What is structural unemployment?
Unemployment that arises from a mismatch between skills and job requirements.
What is frictional unemployment?
Short-term unemployment that occurs when people are between jobs or entering the workforce.
What is seasonal unemployment?
Unemployment that occurs at certain times of the year when demand for labour is lower.
What is the formula for the unemployment rate?
Unemployment Rate = (Number of People Unemployed / Labour Force) X 100.
What happens if many cafes close in Singapore?
This reduces labour demand, causing a leftward shift of the labour demand curve.
What is the effect of a policy mandating a minimum wage of $15?
It leads to unemployment as the quantity of workers willing to work exceeds the quantity demanded.
What is the title of the recommended textbook by Parkin?
Macroeconomics 10th Edition
Published by Pearson
Who is the author of ‘Foundations of Economics’?
A. Gillespie
Published by Oxford University Press
What is the title of the second textbook by Parkin?
Economics 10th ed.
Published in the US by Pearson Addison Wesley
What is the focus of the video titled ‘Unemployment’?
Unemployment
Episode 18 from Macro series
What is the main topic of the video ‘Market and Minimum Wage: Econ Concepts in 60 Seconds’?
Market and Minimum Wage
An economics lesson from 2009
What does the video ‘Unemployment and Natural Rate of Unemployment’ cover?
Unemployment and Natural Rate of Unemployment
AP Macro video from 2010
What does the term ‘Demand for Labour’ refer to?
The need for workers by employers
More details can be found on Tutor2u
What does ‘Supply of Labour’ mean?
The availability of workers in the market
Explained on Tutor2u website
What is the focus of Topic 2 in the provided resources?
Business Cycles and Unemployment
Available on the specified website
