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(4) Employment and Unemployment Flashcards | StudBud
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(4) Employment and Unemployment
(4) Employment and Unemployment
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Rashid Al-Hmoud
Flashcards
18 cards
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Questions
18
Answers
1
Frictional unemployment
All of the above
Is not impacted by how good or bad the economy is doing
Is caused by downward wage rigidity
Is a long-term unemployment
2
Adult civilians who are not looking for work =
Potential workers - labor force
Population - labor force
Potential workers - employed
Labor force - employed
3
In a frictionless labor market
There is no unemployment
All of the above
Wages are flexible
The market always clears
4
In a frictionless labor market, an economic slowdown
lowers both wages and employment
lowers wages but keep employment unchanged
lowers wages and cause unemployment
keeps wages the same because of downward wage rigidity
5
Last week, the BLS announced the unemployment rate for the month of April 2019 at
3.7%
3.8%
3.9%
3.6%
6
Follow up to Q3 and Q4, if W=$15 an hour for landscaping workers, the landscaping company
is making a profit of $25 from hiring the 3rd worker.
is making a profit of $10 from hiring the 3rd worker
is making a profit of $15 from hiring the 3rd worker
is making a loss of $25 from hiring the 3rd worker.
7
Which of the following DOES NOT increase the demand for home construction workers?
A housing bubble
New machines that replace certain jobs in construction sites
A reduction in the wage rate of construction workers
Economic slowdown
8
Follow up to Q3, if P.MPL of 3rd worker = $25, then the price of maintaining a yard is
not enough information to answer this question
$25
< $25
> $25
9
Which of the following DOES NOT cause wages to be downward rigid?
Managers reduce workers (instead of wages) during recessions
Efficiency wages
Minimum wage law
Matching workers with their jobs takes time
10
If W > P.MP
L
A company profits more by hiring more workers
A company is said to be in equilibrium
A company profits more by firing workers
A company profits less by firing workers
11
The type of unemployment that is caused by downward wage rigidity is known as
none of the above
natural rate of unemployment
cyclical unemployment
frictional unemployment
12
If the actual rate of unemployment is 5.5%, and the natural rate of unemployment is 4%, then
Structural unemployment = 1.5%
Cyclical unemployment = 1.5%
Cyclical unemployment = 9.5%
Frictional unemployment = 5%
13
You heard Jane say "I lost my job at GM because the auto industry is slow due to the economy",
Jane is seasonally unemployed
Jane is structurally unemployed
Jane is cyclically unemployed
Jane is frictionally unemployed
14
You heard John saying "I lost my job because I was replaced by a machine". John is
Structurally unemployed
Cyclically unemployed
Frictionally unemployed
Seasonally unemployed
15
Which of the following unemployment types fluctuates with the economy?
Frictional unemployment
Cyclical unemployment
Structural unemployment
Frictionless unemployment
16
Why does the labor demand curve have a negative slope?
At high wages, the opportunity cost of not working is high
Because when firms hire more workers, wages rise
Because when firms hire more workers, wages fall
Because of diminishing marginal product of labor
17
Why does the labor supply curve have a positive slope
At high wages, the opportunity cost of not working is high
At low wages, the opportunity cost of not working is high
At high wages, the opportunity cost of not working is low
Because of diminishing marginal product of workers
18
If a landscaping company hires a 3rd worker, its output increases from 3 to 4 yards per hour.
It shouldn't hire the 3rd worker
It should hire the 3rd worker
Not enough information to answer this question
It should fire the 2nd worker
