Exam 15: Unemployment: Part A

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How are discouraged workers counted in the unemployment rate?

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Question 1

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Because discouraged workers are classified as out of the labor force, they are not counted in unemployment statistics.

Define efficiency wages.

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Question 2

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Efficiency wages are above-equilibrium wages paid by firms to increase worker productivity.

Why might a favorable change in the economy,such as technological improvement or a decrease in the price of imported oil,be associated with an increase in frictional unemployment?

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Even generally favorable changes will usually involve some sort of sectoral shock that changes the demand for labor among different firms. For example, a decrease in the price of imported oil would likely reduce the demand for U.S. oil workers and increase the demand for automobile workers. Similarly, technological progress makes some industries decline and others advance, creating frictional unemployment.

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

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Question 4

Define the natural rate of unemployment and cyclical unemployment.

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Question 5

Briefly explain the four rationales for efficiency wages.

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Question 6

List the main employment characteristics over which a labor union negotiates for its workers.

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Question 7

Compare the 2014 unemployment rates and labor-force participation rates of whites,blacks,adults of prime working age (ages 25-54),and teenagers (ages 16-19).

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Question 8

The adult non-institutionalized population in the town of Bedrock is 75 thousand.Within Bedrock,5 thousand are unemployed,and 40 thousand are employed.Calculate the number of people not in the labor force.

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Question 9

Ignoring the differences across states,explain the benefit provided to the typical worker in the United States from unemployment insurance.

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Question 10

Figure 28-7 -Refer to Figure 28-7.If the minimum wage increases from $100 to $125,how many additional workers will be unemployed?

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Question 11

Unemployment insurance __________ the amount of unemployment.

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Question 12

Figure 28-7 -Refer to Figure 28-7.Without a minimum wage,what is the equilibrium level of employment? Explain what happens to the level of employment if the minimum wage is equal to $125.

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Question 13

Most spells of unemployment are short,and most unemployment observed at any given time is long term.How can this be?

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Question 14

Figure 28-7 -Refer to Figure 28-7.At a minimum wage of $125,how much is the surplus of labor?

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Question 15

Explain the effect of right-to-work laws on the collective bargaining power of labor unions.

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Question 16

List the four types of efficiency-wage theory.

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Question 17

Figure 28-6 -Refer to Figure 28-6.What type of unemployment is measured by the differences between lines A and B?

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Question 18

List a few of the characteristics of workers who typically earn at or below the minimum wage.

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Question 19

What problems arise in interpreting unemployment data?

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Question 20

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Exam 15: Unemployment: Part A

How are discouraged workers counted in the unemployment rate?

Define efficiency wages.

Why might a favorable change in the economy,such as technological improvement or a decrease in the price of imported oil,be associated with an increase in frictional unemployment?

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Define the natural rate of unemployment and cyclical unemployment.

Briefly explain the four rationales for efficiency wages.

List the main employment characteristics over which a labor union negotiates for its workers.

Compare the 2014 unemployment rates and labor-force participation rates of whites,blacks,adults of prime working age (ages 25-54),and teenagers (ages 16-19).

The adult non-institutionalized population in the town of Bedrock is 75 thousand.Within Bedrock,5 thousand are unemployed,and 40 thousand are employed.Calculate the number of people not in the labor force.

Ignoring the differences across states,explain the benefit provided to the typical worker in the United States from unemployment insurance.

Figure 28-7 -Refer to Figure 28-7.If the minimum wage increases from $100 to $125,how many additional workers will be unemployed?

Unemployment insurance __________ the amount of unemployment.

Figure 28-7 -Refer to Figure 28-7.Without a minimum wage,what is the equilibrium level of employment? Explain what happens to the level of employment if the minimum wage is equal to $125.

Most spells of unemployment are short,and most unemployment observed at any given time is long term.How can this be?

Figure 28-7 -Refer to Figure 28-7.At a minimum wage of $125,how much is the surplus of labor?

Explain the effect of right-to-work laws on the collective bargaining power of labor unions.

List the four types of efficiency-wage theory.

Figure 28-6 -Refer to Figure 28-6.What type of unemployment is measured by the differences between lines A and B?

List a few of the characteristics of workers who typically earn at or below the minimum wage.

What problems arise in interpreting unemployment data?

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion