Week five learning Flashcards
How does the government measure unemployment?
By identifying people who are employed, unemployed (actively looking for work), or not in the labor force. The labor force is the sum of employed and unemployed individuals.
What are the main problems with interpreting unemployment data?
It excludes discouraged workers, does not differentiate between full-time and part-time work, and may have misreporting issues. Despite this, it is a useful indicator of labor market health.
How long are the unemployed typically without work?
Most spells of unemployment are short-term, but a significant portion of unemployment observed at any time is long-term.
Most spells of unemployment are short-term, but a significant portion of unemployment observed at any time is long-term.
The normal rate of unemployment around which the unemployment rate fluctuates in the long run.
What is cyclical unemployment?
The deviation of unemployment from its natural rate in the short run.
How does the unemployment rate change in the following scenarios?
A. Hailey loses her job and starts looking for a new one.
B. Josiah gives up looking for work.
C. Karim takes a part-time job while seeking a new position.
A. U-rate increases.
B. U-rate decreases.
C. U-rate remains unchanged
What is classical unemployment?
Unemployment arising when the real wage is above the market-clearing level, often due to minimum wage laws or other market distortions.
What is frictional unemployment?
Unemployment resulting from the time it takes for workers to find jobs that match their skills and preferences. Typically short-term.
What is structural unemployment?
Unemployment arising when the skills of workers do not match the skills demanded by employers. Can be influenced by technological changes and market dynamics.
Which policy would most likely reduce frictional unemployment?
More workers posting resumes on LinkedIn and more employers using LinkedIn to find suitable workers
What determines the demand for labor in the labor market?
The demand for labor is derived from the demand for the goods and services that labor helps to produce, with firms aiming to maximize profits.
How is marginal product of labor (MPL) defined?
MPL is the increase in output from an additional unit of labor, calculated as MPL= ΔL/ΔQ
What is the value of the marginal product (VMPL)?
VMPL is the marginal product of labor multiplied by the price of the output, VMPL=P×MPL.
What factors cause the labor demand curve to shift?
Changes in the output price, technological changes, and the supply of other factors of production.
What influences the supply of labor?
Changes in attitudes towards work, alternative opportunities, immigration, and the trade-off between work and leisure.
