Deck 9: Employment and Unemployment

Question 1

Which of the following groups of people would be considered unemployed?

A) Workers who experienced a wage cut due to recession
B) Employees working in public sector undertakings
C) Housewives raising kids at home and not looking for jobs
D) Workers who have been looking for jobs for the past 4 weeks

Answer 1

Workers who have been looking for jobs for the past 4 weeks

Question 2

Scenario: 100 people live in Country X, and 60 of these people are working full time. Tara and Jen have been able to find only part-time jobs. John, Peter, and Luna just had to close their coffee shop; and John and Peter are looking for a new business venture. Luna has inherited a large sum of money and feels that she does need to work anymore. Her sister Sara feels the same way. Four people in Country X are living in care facilities. Ten people are full-time students, and two of them currently are hoping to find a job. All other people are retirees or under the age of 16.
Refer to the scenario above.What is the size of the labor force in Country X?

A) 55
B) 64
C) 70
D) 78

Answer 2

64

Question 3

The size of the labor force in a country is equal to the ________.

A) number of employed workers in the country
B) number of unemployed workers in the country
C) number of employed workers plus the number of unemployed workers in the country
D) number of employed workers minus the number of unemployed workers in the country

Answer 3

number of employed workers plus the number of unemployed workers in the country

Question 4

The following table compares labor statistics for two countries.

Refer to the table above.Which category do underemployed workers fall under?

A) Not in labor force
B) Potential workers
C) Unemployed workers
D) All of the above

Question 5

Which of the following groups of people would not be considered employed?

A) Teachers in public schools
B) Housewives raising kids at home
C) Paid workers in the agricultural sector of a country
D) Government representatives earning a fixed salary every month

Question 6

A worker is said to be unemployed if he ________.

A) does not have a job and is not actively looking for a job
B) is working from home and drawing a weekly salary
C) has been working part-time and has been actively looking for full-time work
D) does not have a job, has been actively looking for one in the prior 4 weeks, and is available for work

Question 7

As per the records of the Bureau of Labor Statistics (BLS),which of the following was true of the U.S.economy in 2016?

A) The number of unemployed workers > The number of employed workers > The number of adults out of the labor force
B) The number of employed workers > The number of unemployed workers > The number of adults out of the labor force
C) The number of employed workers > The number of adults out of the labor force > The number of unemployed workers
D) The number of unemployed workers > The number of adults out of the labor force > The number of employed workers

Question 8

The potential adult labor force includes the ________.

A) civilian non-institutional population aged 16 years and older
B) non-institutional population aged 18 years and older
C) non-institutional population aged 16 years and older plus people on active duty in the military
D) non-institutional population aged 13 years and older plus people on active duty in the military

Question 9

Scenario: 100 people live in Country X, and 60 of these people are working full time. Tara and Jen have been able to find only part-time jobs. John, Peter, and Luna just had to close their coffee shop; and John and Peter are looking for a new business venture. Luna has inherited a large sum of money and feels that she does need to work anymore. Her sister Sara feels the same way. Four people in Country X are living in care facilities. Ten people are full-time students, and two of them currently are hoping to find a job. All other people are retirees or under the age of 16.
Refer to the scenario above.How would the Bureau of Labor Statistics classify Luna?

A) Unemployed
B) In the labor force
C) Employed
D) Potential worker

Question 10

Scenario: The unemployment rate in Country Y is 6 percent, and the labor force is equals about 200 million people.
Refer to the scenario above.Who is considered part of the 6 percent of unemployed workers in Country Y?

A) Amanda, who works 20 hours per week at a coffee shop but wants to work full time
B) Peter, an engineer who became a stay-at-home husband after his start-up company went bankrupt, but he wants to find a new engineering job
C) John, who is taking a year off to travel after college
D) All of the above

Question 11

The following table defines some population statistics for two countrries.

If a group of students decided to try to find jobs while they are studying,which of the above rates would change at first? Assume that it takes the students a few months to actually find a job.

A) Only the unemployment rate would increase.
B) Both the labor participation rate and the unemployment rate would increase.
C) Only the labor participation rate would increase.
D) The labor participation rate would increase and the unemployment rate would decrease.

Question 12

________ are a part of the potential labor force of a country.

A) Institutionalized people
B) Children aged 15 and younger
C) People on active duty in the military
D) Civilian non-institutionalized people aged 16 years and over

Question 13

Scenario: The unemployment rate in Country Y is 6 percent, and the labor force is equals about 200 million people.
Refer to the scenario above.Which statement is true about Country Y?

A) About 188 million people have a job.
B) About 212 million people are considered potential workers.
C) The labor force participation rate is about 94 percent.
D) There are fewer than 200 million potential workers.

Question 14

Scenario: The unemployment rate in Country Y is 6 percent, and the labor force is equals about 200 million people.
Refer to the scenario above.Why might policy makers in Country Y most likely introduce policies that require unemployed workers to participate in job training programs?

A) Country Y's economy likely suffers a recession.
B) To mitigate the social costs of unemployment.
C) To decrease the labor force.
D) To be able to track unemployment more easily.

Question 15

An employed individual is one who ________.

A) has a full-time or part-time paid job
B) has been actively looking for jobs
C) was previously employed but has quit the job voluntarily
D) has been performing household chores for free

Question 16

The following table compares labor statistics for two countries.

Refer to the table above.Country B is a popular place for people to retire.Consequently,there has about twice as many retirees as there are in Country A.Without these immigrant retirees,________.

A) Country A would likely have more potential workers than Country B
B) Country B's unemployment rate would likely be lower than Country A's unemployment rate
C) Country B's unemployment rate would likely be higher than Country A's unemployment rate
D) Country A would likely have fewer potential workers than Country A

Question 17

The following table compares labor statistics for two countries.

Refer to the table above.What is true about the number of unemployed workers in Country A relative to Country B?

A) There are more unemployed workers in Country A.
B) There are more unemployed workers in Country B.
C) The number of unemployed workers is equal in Countries A and B.
D) It is not possible to determine which country has more unemployed workers without knowing the unemployment rate.

Question 18

Scenario: The unemployment rate in Country Y is 6 percent, and the labor force is equals about 200 million people.
Refer to the scenario above.Who of the people listed below would be considered part of the work force in Country Y?

A) John, who is a stay-at-home dad
B) Mary, who takes care of her sick mother at home
C) Peter, who is currently finishing his degree in economics and has a part-time job
D) All of the above

Question 19

Scenario: 100 people live in Country X, and 60 of these people are working full time. Tara and Jen have been able to find only part-time jobs. John, Peter, and Luna just had to close their coffee shop; and John and Peter are looking for a new business venture. Luna has inherited a large sum of money and feels that she does need to work anymore. Her sister Sara feels the same way. Four people in Country X are living in care facilities. Ten people are full-time students, and two of them currently are hoping to find a job. All other people are retirees or under the age of 16.
Refer to the scenario above.How many people in Country X are not considered to be potential workers?

A) 26
B) 22
C) 36
D) 40

Question 20

Which categories of people are excluded when estimating the number of potential workers in the United States?

Question 21

If the number of potential workers in an economy increases while the size of the labor force remains unchanged,________.

A) the natural rate of unemployment will increase
B) the labor force participation rate will fall
C) the labor force participation rate will increase
D) the labor force participation rate will remain unaffected

Question 22

The unemployment rate is defined as the percentage of the ________ that is unemployed.

A) labor force
B) total population
C) civilian non-institutionalized population aged 12 or older
D) civilian non-institutionalized population aged 14 or older

Question 23

If the number of discouraged workers in a country increases,________.

A) the unemployment rate will increase
B) the unemployment rate will decrease
C) the labor force participation rate will increase
D) the labor force participation rate will decrease

Question 24

Which of the following statements correctly differentiates between unemployed workers and discouraged workers?

A) Unemployed workers do not have a paid job, while discouraged workers have a paid job.
B) Unemployed workers are counted in the labor force, but discouraged workers are excluded from the labor force.
C) Unemployed workers consist of skilled workers who have been laid off, while discouraged workers refer to the unskilled workers who have lost their jobs.
D) The unemployment benefits received by unemployed workers are not capped, while the unemployment benefits received by discouraged workers are capped at a maximum.

Question 25

If the number of employed workers in an economy is 8 million,the number of potential workers in the economy is 12 million,and the number of adults not in the labor force is 1 million,the number of unemployed people in the economy will equal ________.

A) 1 million
B) 3 million
C) 5 million
D) 7 million

Question 26

The number of adults not in the labor force of a country equals 6 million,and the number of individuals employed is 5 million.If there are 12 million potential adult workers in the economy,what is the current unemployment rate in this country?

A) 12.45 percent
B) 16.67 percent
C) 21 percent
D) 30.55 percent

Question 27

Scenario: Suppose an economy consists of only the following economic agents: 2 million full-time workers, 1 million part-time workers, 1 million people who have been laid off by their employers but are currently looking for employment, 1 million children aged 15 years or younger, and 2 million housewives not looking for jobs.
Refer to the scenario above.What is the number of employed workers in the economy?

A) 1 million
B) 2 million
C) 3 million
D) 4 million

Question 28

If the number of employed people in a country is 21 million and the number of unemployed workers in a country is 10 million,the size of the labor force in the country is equal to ________.

A) 10 million
B) 11 million
C) 21 million
D) 31 million

Question 29

In an economy,the number of potential workers is 60,000,the size of the labor force is 45,000,and the number of employed workers is 39,000.Calculate the unemployment rate and labor force participation rate in the country.

Question 30

If there are 48 million people in a country's labor force and the number of potential adult workers in the country is 80 million,the labor force participation rate in the economy is ________.

A) 48 percent
B) 60 percent
C) 80 percent
D) 90 percent

Question 31

If the labor force participation rate in an economy is 50 percent and there are 100 million potential adult workers in the economy,then the size of the labor force in the economy will equal ________.

A) 2 million
B) 10 million
C) 50 million
D) 100 million

Question 32

Scenario: Suppose an economy consists of only the following economic agents: 2 million full-time workers, 1 million part-time workers, 1 million people who have been laid off by their employers but are currently looking for employment, 1 million children aged 15 years or younger, and 2 million housewives not looking for jobs.
Refer to the scenario above.What is the size of the labor force in the economy?

A) 3 million
B) 4 million
C) 5 million
D) 6 million

Question 33

Which of the following equations is correct?

A) Adults not in the labor force = Unemployed − Employed
B) Adults not in the labor force = Labor force − Unemployed
C) Adults not in the labor force = Potential adult workers
D) Adults not in the labor force = Potential adult workers − Labor force

Question 34

Scenario: Suppose an economy consists of only the following economic agents: 2 million full-time workers, 1 million part-time workers, 1 million people who have been laid off by their employers but are currently looking for employment, 1 million children aged 15 years or younger, and 2 million housewives not looking for jobs.
Refer to the scenario above.What is the number of unemployed workers in the economy?

A) 1 million
B) 2 million
C) 3 million
D) 4 million

Question 35

Which of the following equations is correct?

A) Adults not in labor force = Unemployed workers
B) Adults not in labor force = Unemployed workers − Employed workers
C) Adults not in labor force = Unemployed workers + Employed workers
D) Adults not in the labor force = Potential adult workers − Employed workers − Unemployed workers

Question 36

If the number of potential workers in a country is 25 million and the size of the labor force in the country is 17 million,the number of adults not in the labor force will equal ________.

A) 8 million
B) 17 million
C) 25 million
D) 43 million

Question 37

If the number of unemployed workers in an economy is 4 million and the size of the labor force in the economy is 16 million,then the unemployment rate in the economy is ________.

A) 4 percent
B) 8 percent
C) 25 percent
D) 30 percent

Question 38

Workers who are underemployed are ________.

A) considered employed
B) considered unemployed
C) not counted in the labor force
D) considered discouraged workers

Question 39

Which of the following groups of people is included in the labor force of a country?

A) Retirees
B) Part-time paid workers
C) Adults who are full-time students
D) Disabled workers who can no longer work

Question 40

Workers who are unemployed but are not actively looking for jobs are referred to as ________.

A) laid-off workers
B) unskilled workers
C) abandoned workers
D) discouraged workers

Question 41

Which of the following statements is true of the unemployment rate in an economy?

A) During periods of expansion, the unemployment rate in an economy increases.
B) During periods of contraction, the unemployment rate in an economy decreases.
C) The unemployment rate in most of the developed nations of the world is 0 percent.
D) The rate of unemployment is positive in any well-functioning economy.

Question 42

Scenario: 100 people live in Country X, and 60 of these people are working full time. Tara and Jen have been able to find only part-time jobs. John, Peter, and Luna just had to close their coffee shop; and John and Peter are looking for a new business venture. Luna has inherited a large sum of money and feels that she does need to work anymore. Her sister Sara feels the same way. Four people in Country X are living in care facilities. Ten people are full-time students, and two of them currently are hoping to find a job. All other people are retirees or under the age of 16.
Refer to the scenario above.What is the labor force participation rate in Country X?

A) 95 percent
B) 86 percent
C) 81 percent
D) 82 percent

Question 43

Scenario: The unemployment rate in Country Y is 6 percent, and the labor force is equals about 200 million people.
Refer to the scenario above.What can we say about the labor force participation rate?

A) It is equal to 94 percent.
B) It is greater than 94 percent if there are no discouraged workers.
C) It is smaller than 94 percent if 80 percent of the 400 people in County Y are considered potential workers.
D) It may be smaller, equal to, or greater than 94 percent if 80 percent of the 400 people in Country Y are considered potential workers.

Question 44

Scenario: 100 people live in Country X, and 60 of these people are working full time. Tara and Jen have been able to find only part-time jobs. John, Peter, and Luna just had to close their coffee shop; and John and Peter are looking for a new business venture. Luna has inherited a large sum of money and feels that she does need to work anymore. Her sister Sara feels the same way. Four people in Country X are living in care facilities. Ten people are full-time students, and two of them currently are hoping to find a job. All other people are retirees or under the age of 16.
Refer to the scenario above.The unemployment rate in Country X indicates that ________.

A) the country is in an economic crisis
B) there is no unemployment
C) unemployment attributes to a well-functioning economy
D) the economy cannot be expanding

Question 45

Which of the following statements is true?

A) The minimum unemployment rate in the U.S. economy has always been 0 percent.
B) The unemployment rate in the United States was the highest ever during the recession of 2007-2009.
C) In the past 30 years, the unemployment rate in the United States has never gone below 3 percent.
D) The unemployment rate in the U.S. economy has been increasing since 1900.

Question 46

The following table compares labor statistics for two countries.

Refer to the table above.In Country B,fewer and fewer high school graduates decide to go to college and instead start to work or look for work right after graduation.What can be said about the two countries' labor force participation rates?

A) Country B's labor force participation rate is likely to surpass Country A's.
B) The difference between the two countries' labor force participation rates is likely to decrease.
C) The difference between the two countries' labor force participation rates is likely to increase.
D) There is not going to be any change to the two countries' labor force participation rates.

Question 47

As a firm hires more and more workers,________.

A) the marginal product of the additional workers remains the same
B) the value of the marginal product of the additional workers remains the same
C) the value of the marginal product of the additional workers eventually increases
D) the value of the marginal product of the additional workers eventually decreases

Question 48

Which of the following statements is true of the unemployment rate in a country?

A) It normally increases during periods of economic expansion and decreases during periods of economic contraction.
B) It normally decreases during periods of economic expansion and increases during periods of economic contraction.
C) It normally decreases during periods of both economic expansion and contraction.
D) It is not correlated with the level of economic activity in a country.

Question 49

Scenario: 100 people live in Country X, and 60 of these people are working full time. Tara and Jen have been able to find only part-time jobs. John, Peter, and Luna just had to close their coffee shop; and John and Peter are looking for a new business venture. Luna has inherited a large sum of money and feels that she does need to work anymore. Her sister Sara feels the same way. Four people in Country X are living in care facilities. Ten people are full-time students, and two of them currently are hoping to find a job. All other people are retirees or under the age of 16.
Refer to the scenario above.How would the unemployment rate change if two more students decide to look for work?

A) It would remain the same, because students are not part of the labor force.
B) It would increase by about 3 percent.
C) It would decrease by about 3 percent.
D) It would increase by more than 3 percent.

Question 50

Scenario: The unemployment rate in Country Y is 6 percent, and the labor force is equals about 200 million people.
Refer to the scenario above.How would the unemployment rate change if Country Y experienced a large increase in immigration of skilled workers?

A) It would likely increase, because some immigrants will be unemployed.
B) It would likely decrease, because the labor force would increase.
C) It may increase or decrease, depending on the availability of skilled jobs.
D) It may increase or decrease, depending on the relative increases in the number of unemployed workers and the size of the labor force.

Question 51

The following table defines some population and employment statistics for two countries.

Refer to the table above.Assume there are 150 million students,elderly,or children in Sweet Country.There are about 11 million unemployed people.How many people are discouraged or are not looking for work even though they do not have a job and could work?

A) About 6 million people
B) About 23 million people
C) About 50 million people
D) About 10 million people

Question 52

Which of the following statements is true?

A) As an economy experiences growth in GDP, the rate of unemployment is expected to decrease.
B) As an economy experiences growth in GDP, the rate of unemployment is expected to increase.
C) The unemployment rate in a country always remains constant.
D) The unemployment rate in a country is not correlated with the level of economic activity in the country.

Question 53

The following table defines some population and employment statistics for two countries.

Refer to the table above.If two-thirds of the population in both countries are considered to be potential workers,how many people are unemployed?

A) About 20 million in Sweet Country and 25 million in Spicy Country
B) About 18 million Sweet Country and 20 million Spicy Country
C) About 16 million in Sweet Country and 19 million in Spicy Country
D) About 11 million in Sweet Country and 13 million in Spicy Country

Question 54

The following table defines some population and employment statistics for two countries.

Refer to the table above.If coal mines across Sweet Country were closed suddenly,and most laid-off workers felt that their skills would not allow them to find new jobs,what is likely to happen?

A) The unemployment rate would increase.
B) The labor participation rate would increase.
C) Both the unemployment rate and the labor participation rate would increase.
D) Neither the unemployment rate nor the labor participation rate would increase.

Question 55

The following table compares labor statistics for two countries.

Refer to the table above.Country A's unemployment rate is about ________,and Country B's unemployment rate is about ________.

A) 5 percent; 7 percent
B) 6 percent; 5 percent
C) 7 percent; 5 percent
D) 3 percent; 8 percent

Question 56

The following table defines some population and employment statistics for two countries.

Refer to the table above.The labor force is bigger in which country?

A) Sweet Country, by about 22 million workers
B) Spicy Country, by about 10 million workers
C) Cannot be determined without knowing how many unemployed workers there are
D) Cannot be determined without knowing the size of the potential work force

Question 57

A profit-maximizing firm will pay a worker ________.

A) the revenue that it earns by selling one unit of the product
B) the value of the worker's marginal product
C) less than the value of the worker's marginal product
D) more than the value of the average revenue of the firm

Question 58

The following table defines some population and employment statistics for two countries.

Refer to the table above.Due to technological changes,older workers have

A) The unemployment rate will decrease.
B) The labor participation rate will increase.
C) The number of people not in the labor force will decrease.
D) The number of unemployed workers will increase.

Question 59

In an economy,out of 221.6 million potential workers,180.65 million are employed.If the labor force in the economy is 200.5 million,calculate:
a)The number of unemployed workers
b)The unemployment rate
c)The labor force participation rate
d)The number of potential workers who are not a part of the labor force

Question 60

The following table compares labor statistics for two countries.

Refer to the table above.How would an increase in the unemployment rate of 1 percent affect the labor force in Country A?

A) It would increase it to 303 million workers.
B) It would decrease it to 297 million workers.
C) It would decrease it by less than 1 million workers.
D) It would not affect the size of the labor force in Country A.

Question 61

Scenario: Suppose that professors pay their teaching assistants $10 an hour to grade papers for their classes, and then the professors sell the graded papers back to the students in their classes for $.75 a paper. The following table shows the number of papers graded in a given number of hours.

Refer to the scenario above.What is the value of the marginal productivity of labor of the fifth hour of labor?

A) $5.25
B) $9.00
C) $10.50
D) $15.50

Question 62

Why is the labor demand curve downward-sloping?

Question 63

Scenario: Suppose that professors pay their teaching assistants $10 an hour to grade papers for their classes, and then the professors sell the graded papers back to the students in their classes for $.75 a paper. The following table shows the number of papers graded in a given number of hours.

Refer to the scenario above.How many hours of labor should the professors employ to maximize their profits?

A) 2
B) 3
C) 4
D) 5

Question 64

The value of the marginal product of the tenth worker hired by a firm is $50.What is the maximum wage that should be paid to the worker?

A) $5
B) $50
C) $0.20
D) $500

Question 65

If a firm hires a worker by paying her a wage lower than the value of the marginal product of the worker,it implies that ________.

A) the firm is earning zero economic profit
B) the firm is making an optimum decision
C) the firm should reduce its employee strength to maximize profits
D) the firm should hire more workers to increase profits

Question 66

The following figure shows labor supply and demand curves.

Refer to the figure above.What is the appropriate label for the y-axis?

A) Labor demanded
B) Quantity of labor
C) Labor supplied
D) Wage rate

Question 67

Scenario: Suppose that professors pay their teaching assistants $10 an hour to grade papers for their classes, and then the professors sell the graded papers back to the students in their classes for $.75 a paper. The following table shows the number of papers graded in a given number of hours.

Refer to the scenario above.What is the marginal productivity of labor of the fifth hour of labor?

A) 7 papers
B) 12 papers
C) 19 papers
D) 22 papers

Question 68

The following figure shows labor supply and demand curves.

Refer to the figure above.What is the appropriate label for the x-axis?

A) Labor demanded
B) Quantity of labor
C) Labor supplied
D) Wage rate

Question 69

Which of the following equations is true of a profit-maximizing firm?

A) Wage = A worker's total product
B) Wage = The average product of all workers
C) Wage = A worker's marginal product
D) Wage = The value of a worker's marginal product

Question 70

The labor demand curve represents the relationship between the quantity of labor demanded and the ________.

A) wage
B) price of the good that uses labor as an input
C) number of workers available in the market
D) average product of labor

Question 71

The following figure shows labor supply and demand curves.

Refer to the figure above.What is the appropriate label for curve A?

A) Labor demand curve
B) Quantity of labor
C) Labor supply curve
D) Wage rate

Question 72

How is the wage to be paid to a worker determined by a profit-maximizing firm? If a marginal worker creates 8 units of a product in a month that is sold for $5 per unit,calculate the maximum wage that should be paid to him.

Question 73

What causes the labor demand curve to shift? List three factors that can cause the labor demand curve to shift right.

Question 74

The value of a worker's marginal product ________.

A) is the additional revenue that the worker brings in to a firm
B) is always equal to the maximum price at which the product produced by the worker can be sold in a market
C) is the increment in the total cost of a firm when the worker is hired
D) equals the average product of a firm that hires the worker divided by the marginal product of the worker

Question 75

The labor demand curve is ________.

A) horizontal
B) vertical
C) upward-sloping
D) downward-sloping

Question 76

Scenario: Suppose that professors pay their teaching assistants $10 an hour to grade papers for their classes, and then the professors sell the graded papers back to the students in their classes for $.75 a paper. The following table shows the number of papers graded in a given number of hours.

Refer to the scenario above.If the teaching assistants' hourly rate increases to $15,then how many hours of labor should the professors employ to maximize their profits?

A) 2
B) 3
C) 4
D) 5

Question 77

The slope of the labor demand curve can be attributed to the law of ________.

A) decreasing opportunity cost
B) increasing opportunity cost
C) increasing marginal productivity of labor
D) diminishing marginal productivity of labor

Question 78

Scenario: Suppose that professors pay their teaching assistants $10 an hour to grade papers for their classes, and then the professors sell the graded papers back to the students in their classes for $.75 a paper. The following table shows the number of papers graded in a given number of hours.

Refer to the scenario above.What is the average productivity of labor over the full 7 hours of labor?

A) 5 papers/hour
B) 14 papers/hour
C) 22 papers/hour
D) 40 papers/hour

Question 79

If a firm hires a worker by paying him a wage higher than the value of the marginal product of the worker,________.

A) the firm is making an optimum decision
B) firing the worker will reduce the firm's profits
C) firing the worker will increase the firm's profits
D) the firm will earn higher profits

Question 80

Scenario: Suppose that professors pay their teaching assistants $10 an hour to grade papers for their classes, and then the professors sell the graded papers back to the students in their classes for $.75 a paper. The following table shows the number of papers graded in a given number of hours.

Refer to the scenario above.If the professors then raise the price of papers to $1.50,how many hours of labor should the professors employ to maximize their profits?

A) 2
B) 3
C) 4
D) 5