Unit 1 Exam Review

Question 1

Working-age population

Answer 1

those age 16 or older who are not in the military or institutionalized

Question 2

Employed

Answer 2

working-age people who are working

Question 3

Unemployed

Answer 3

working-age people without jobs who are trying to get jobs

Question 4

Labor force

Answer 4

the employed + the unemployed

Question 5

Not in the labor force

Answer 5

those in the working age population who are neither employed not unemployed

Question 6

Labor force participation rate

Answer 6

LFPR = employed + unemployed/working-age population x 100

Question 7

Unemployment rate

Answer 7

unemployment rate = unemployed/labor force x 100

Question 8

Equilibrium unemployment rate

Answer 8

the long-run unemployment rate to the whole economy tends to return

Question 9

Long-term unemployed

Answer 9

people who have been unemployed for more than 6 consecutive months

Question 10

Marginally attached

Answer 10

someone who wants a job and who has looked for a job within the past year, but who isn’t counted as unemployed because they aren’t currently looking for work

Question 11

Underemployed

Answer 11

someone who has some work but wants more hours, or whose job isn’t adequately using their skills

Question 12

Involuntary part time

Answer 12

someone who wants full-time work and is working part time because they haven’t found a full-time job

Question 13

Frictional unemployment

Answer 13

unemployment due to the time it takes for employers to search for workers and for workers for search for jobs

Question 14

structural unemployment

Answer 14

unemployment that occurs because wages don’t fall due to labor demand and supply into equilibrium

Question 15

Cyclical unemployment

Answer 15

Unemployment that is due to temporary downturn in the economy

Question 16

Hysteresis

Answer 16

when a period of high unemployment leads to a higher equilibrium unemployment rate

Question 17

Efficiency wage

Answer 17

a wage above the prevailing market wage to encourage worker productivity

Question 18

Gains from trade

Answer 18

the benefits that come from reallocating resources, goods, and services

Question 19

Absolute advantage

Answer 19

the ability to do a task using fewer inputs

Question 20

Comparative advantage

Answer 20

the ability to do a task at a lower opportunity costIn

Question 21

Internal markets

Answer 21

markets within a company to buy and sell scarce resources

Question 22

Positive statement

Answer 22

attempt to describe the world as it is

Question 23

Normative statement

Answer 23

attempt to describe how the world should be

Question 24

Import

Answer 24

to buy goods or services from foreign sellers

Question 25

Export

Answer 25

to sell goods and services to foregin buyers

Question 26

Trade costs

Answer 26

the extra costs as a result of buying or selling internationally, rather than domestically

Question 27

World market

Answer 27

intersection of world supply and world demand

Question 28

World price

Answer 28

the price that a product sells for in the global market

Question 29

Tariffs

Answer 29

a tax on imported goods

Question 30

Globalization

Answer 30

the increasing economic, political and cultural integration of different countries