Question 1

"Full employment" is said to exist when the actual unemployment rate is zero.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is false?

Accepted Answer

A)  A discouraged worker is counted as an unemployed worker. 
B)  The frictional unemployment rate is greater than the natural unemployment rate. 
C)  The natural unemployment rate is greater than the structural unemployment rate. 
D)  The natural unemployment rate is equal to the sum of the frictional unemployment rate and the structural unemployment rate. 
E)  a and b 
A)  A discouraged worker is counted as an unemployed worker. 
B)  The frictional unemployment rate is greater than the natural unemployment rate. 
C)  The natural unemployment rate is greater than the structural unemployment rate. 
D)  The natural unemployment rate is equal to the sum of the frictional unemployment rate and the structural unemployment rate. 
E)  a and b

Question 3

If the CPI was 196.5 in 2005 and 172.2 in 2000,by what percentage did prices rise during the period 2000-2005?

Accepted Answer

A)  0.10 percent 
B)  6.43 percent 
C)  10 percent 
D)  14.1 percent 
A)  0.10 percent 
B)  6.43 percent 
C)  10 percent 
D)  14.1 percent

Question 4

In year 1 the CPI is 175,and in year 2 the CPI is 189.If Dennis's salary was $82,000 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

Accepted Answer

A)  $83,550 
B)  $92,360 
C)  $85,750 
D)  $88,560 
A)  $83,550 
B)  $92,360 
C)  $85,750 
D)  $88,560

Question 5

Persons who are retired or engaged in own-home housework are considered to be in which of the following categories?

Accepted Answer

A)  in the civilian labor force 
B)  not in the labor force 
C)  employed 
D)  unemployed 
A)  in the civilian labor force 
B)  not in the labor force 
C)  employed 
D)  unemployed

Question 6

-Refer to Exhibit 6-2.The unemployment rate in year 3 is

Accepted Answer

A)  12 1/2 percent. 
B)  33 1/3 percent. 
C)  50 percent. 
D)  66 2/3 percent. 
E)  25 percent. 
A)  12 1/2 percent. 
B)  33 1/3 percent. 
C)  50 percent. 
D)  66 2/3 percent. 
E)  25 percent.

Question 7

At the time of Kelsey's 20 year high school reunion she was earning $50,000 and the CPI was 120.Now that it is time for her to attend her 30 year high school reunion,Kelsey's income has risen to $97,000 and the CPI is 230.At her 30 year reunion,can Kelsey rightfully brag that her real income has risen since the last time she saw her former classmates ten years ago?

Accepted Answer

A)  Yes,Kelsey's real income rose during that 10 year period. 
B)  No,Kelsey's real income fell during that 10 year period. 
C)  No,Kelsey's real income remained constant during that 10 year period. 
D)  It is impossible to determine what happened to Kelsey's real income. 
A)  Yes,Kelsey's real income rose during that 10 year period. 
B)  No,Kelsey's real income fell during that 10 year period. 
C)  No,Kelsey's real income remained constant during that 10 year period. 
D)  It is impossible to determine what happened to Kelsey's real income.

Question 8

If the CPI is 220 and nominal income is $37,000,approximately what does real income equal?

Accepted Answer

A)  $81,400 
B)  $16,818 
C)  $76,500 
D)  $44,118 
A)  $81,400 
B)  $16,818 
C)  $76,500 
D)  $44,118

Question 9

Which of the following statements is false?

Accepted Answer

A)  Changes in technology can lead to changes in the ways in which people are employed. 
B)  Cultural differences may help to explain why some men have difficulty finding jobs in some sectors of the modern economy. 
C)  In recent years,the demand for workers in the manufacturing sector has grown dramatically compared to the demand for workers in the service sector. 
D)  Some people may be at a loss as to what skills are required of them in the current labor market. 
A)  Changes in technology can lead to changes in the ways in which people are employed. 
B)  Cultural differences may help to explain why some men have difficulty finding jobs in some sectors of the modern economy. 
C)  In recent years,the demand for workers in the manufacturing sector has grown dramatically compared to the demand for workers in the service sector. 
D)  Some people may be at a loss as to what skills are required of them in the current labor market.

Question 10

In year 1 the CPI is 180,and in year 2 the CPI is 192.From year 1 to year 2,Javier's salary rises from $40,000 to $42,000,and Tom's salary rises from $55,000 to $57,000.Who is "more than keeping up with inflation"?

Accepted Answer

A)  Javier 
B)  Tom 
C)  both Tom and Javier 
D)  neither Tom nor Javier 
A)  Javier 
B)  Tom 
C)  both Tom and Javier 
D)  neither Tom nor Javier

Question 11

Look at the following data: The frictional unemployment rate is 2 percent,the structural unemployment rate is 3.5 percent,and the actual unemployment rate is 9.5 percent.The natural unemployment rate is ____________ percent and the cyclical unemployment rate is __________ percent.

Accepted Answer

A)  1.5; 4 
B)  5.5; 4 
C)  1.5; 6 
D)  6; 15 
A)  1.5; 4 
B)  5.5; 4 
C)  1.5; 6 
D)  6; 15

Question 12

-Refer to Exhibit 6-2.The unemployment rate in year 1 is

Accepted Answer

A)  12 1/2 percent. 
B)  70 percent. 
C)  87 1/2 percent. 
D)  30 percent. 
E)  10 percent. 
A)  12 1/2 percent. 
B)  70 percent. 
C)  87 1/2 percent. 
D)  30 percent. 
E)  10 percent.

Question 13

In year 1 the CPI is 174,and in year 2 the CPI is 185.If Sarah's salary was $49,600 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

Accepted Answer

A)  $54,004 
B)  $51,942 
C)  $50,508 
D)  $52,736 
A)  $54,004 
B)  $51,942 
C)  $50,508 
D)  $52,736

Question 14

Juan lost his job as a nuclear physicist working for a defense contractor.He can not find a job because no firms in the defense industry or any other industry are hiring people with his skills.Juan is ______________ unemployed.

Accepted Answer

A)  frictionally 
B)  cyclically 
C)  structurally 
D)  naturally 
A)  frictionally 
B)  cyclically 
C)  structurally 
D)  naturally

Question 15

Suppose that in an economy the structural unemployment rate is 2.2 percent,the natural unemployment rate is 5.3 percent,and the cyclical unemployment rate is 2 percent.The frictional unemployment rate is _________ percent and the actual unemployment rate (in this economy)is ___________ percent.

Accepted Answer

A)  7.5; 3.3 
B)  4.2; 11.7 
C)  7.3; 3.1 
D)  3.1; 7.3 
A)  7.5; 3.3 
B)  4.2; 11.7 
C)  7.3; 3.1 
D)  3.1; 7.3

Question 16

Look at the following data: The frictional unemployment rate is 1.5 percent,the natural unemployment rate is 4.5 percent,and the cyclical unemployment rate is -1 percent.The structural unemployment rate is _________ percent and the actual unemployment rate (in this economy)is ___________ percent.

Accepted Answer

A)  6; 3.5 
B)  3; 5.5 
C)  3; 3.5 
D)  6; 5.5 
A)  6; 3.5 
B)  3; 5.5 
C)  3; 3.5 
D)  6; 5.5

Question 17

Look at the following data: Total population = 230 million; employed persons = 80 million; unemployed persons = 8 million.The unemployment rate is approximately __________ and the employment rate __________.

Accepted Answer

A)  9.1 percent; cannot be determined 
B)  10 percent; is 90 percent 
C)  8.2 percent; is 34 percent 
D)  11 percent; is 38 percent 
E)  9.1 percent; 90.9 percent 
A)  9.1 percent; cannot be determined 
B)  10 percent; is 90 percent 
C)  8.2 percent; is 34 percent 
D)  11 percent; is 38 percent 
E)  9.1 percent; 90.9 percent

Question 18

At the time of Carol's 10 year high school reunion she was earning $30,000 and the CPI was 90.Now that it is time for her to attend her 20 year high school reunion,Carol's income has risen to $65,000 and the CPI is 200.At her 20 year reunion,can Carol rightfully brag that her real income has risen since the last time she saw her former classmates ten years ago?

Accepted Answer

A)  Yes,Carol's real income rose during that 10 year period. 
B)  No,Carol's real income fell during that 10 year period. 
C)  No,Carol's real income remained constant during that 10 year period. 
D)  It is impossible to determine what happened to Carol's real income. 
A)  Yes,Carol's real income rose during that 10 year period. 
B)  No,Carol's real income fell during that 10 year period. 
C)  No,Carol's real income remained constant during that 10 year period. 
D)  It is impossible to determine what happened to Carol's real income.

Question 19

Valerie works 23 unpaid hours per week at her parent's restaurant,therefore the Bureau of Labor Statistics would count her as employed.

Accepted Answer

A) True 
 B)False

Question 20

-Refer to Exhibit 6-2.How many unemployed persons are there in year 4?

Accepted Answer

A)  80 million 
B)  100 million 
C)  150 million 
D)  350 million 
E)  400 million 
A)  80 million 
B)  100 million 
C)  150 million 
D)  350 million 
E)  400 million

Exam 6: Elasticity

"Full employment" is said to exist when the actual unemployment rate is zero.

Which of the following statements is false?

If the CPI was 196.5 in 2005 and 172.2 in 2000,by what percentage did prices rise during the period 2000-2005?

In year 1 the CPI is 175,and in year 2 the CPI is 189.If Dennis's salary was $82,000 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

Persons who are retired or engaged in own-home housework are considered to be in which of the following categories?

-Refer to Exhibit 6-2.The unemployment rate in year 3 is

If the CPI is 220 and nominal income is $37,000,approximately what does real income equal?

Which of the following statements is false?

In year 1 the CPI is 180,and in year 2 the CPI is 192.From year 1 to year 2,Javier's salary rises from $40,000 to $42,000,and Tom's salary rises from $55,000 to $57,000.Who is "more than keeping up with inflation"?

Look at the following data: The frictional unemployment rate is 2 percent,the structural unemployment rate is 3.5 percent,and the actual unemployment rate is 9.5 percent.The natural unemployment rate is ____________ percent and the cyclical unemployment rate is __________ percent.

-Refer to Exhibit 6-2.The unemployment rate in year 1 is

In year 1 the CPI is 174,and in year 2 the CPI is 185.If Sarah's salary was $49,600 in year 1,what is the minimum salary he must earn in year 2 to "keep up with inflation"?

Juan lost his job as a nuclear physicist working for a defense contractor.He can not find a job because no firms in the defense industry or any other industry are hiring people with his skills.Juan is ______________ unemployed.

Suppose that in an economy the structural unemployment rate is 2.2 percent,the natural unemployment rate is 5.3 percent,and the cyclical unemployment rate is 2 percent.The frictional unemployment rate is _________ percent and the actual unemployment rate (in this economy)is ___________ percent.

Look at the following data: The frictional unemployment rate is 1.5 percent,the natural unemployment rate is 4.5 percent,and the cyclical unemployment rate is -1 percent.The structural unemployment rate is _________ percent and the actual unemployment rate (in this economy)is ___________ percent.

Look at the following data: Total population = 230 million; employed persons = 80 million; unemployed persons = 8 million.The unemployment rate is approximately __________ and the employment rate __________.

Valerie works 23 unpaid hours per week at her parent's restaurant,therefore the Bureau of Labor Statistics would count her as employed.

-Refer to Exhibit 6-2.How many unemployed persons are there in year 4?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

Look at the following data: The frictional unemployment rate is 2 percent,the structural unemployment rate is 3.5 percent,and the actual unemployment rate is 9.5 percent.The natural unemployment rate is __ percent and the cyclical unemployment rate is percent.

Suppose that in an economy the structural unemployment rate is 2.2 percent,the natural unemployment rate is 5.3 percent,and the cyclical unemployment rate is 2 percent.The frictional unemployment rate is _ percent and the actual unemployment rate (in this economy)is ___ percent.

Look at the following data: The frictional unemployment rate is 1.5 percent,the natural unemployment rate is 4.5 percent,and the cyclical unemployment rate is -1 percent.The structural unemployment rate is _ percent and the actual unemployment rate (in this economy)is ___ percent.

Look at the following data: Total population = 230 million; employed persons = 80 million; unemployed persons = 8 million.The unemployment rate is approximately and the employment rate .