EBK EXPLORING ECONOMICS
EBK EXPLORING ECONOMICS
7th Edition
ISBN: 9780100544772
Author: Sexton
Publisher: YUZU
Question
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Chapter 18, Problem 2P
To determine

(a)

To compute:

The labor force participation and the unemployment rate.

Expert Solution
Check Mark

Answer to Problem 2P

The labor force participation rate is 80% and the unemployment rate is 12.5%.

Explanation of Solution

Given information:

Non-intuitional population is 200million

Labor force is 160million.

Therefore,labor Force participation rate is,

  LaborForceParticipation=LaborforceTotaladultpopulation×100=160million200million×100=80

Now, unemployment rate can be calculated by first calculating the unemployed number of workers.

Given,

Non-intuitional population is 200million,

labor force is 160million,

And 140million people were employed.

As we know,labor force is the total employed and unemployed workers. That is,

LaborForce=Employed+Unemployed

Substitute the value to calculate unemployed workers,

LaborForce=Employed+Unemployed160million=140million+UnemployedUnemployed=160million140million=20million

Substitute the values in the formula,

Unemploymentrate=UnemployedLaborforce×100=20million160million×100=12.5%

Therefore, the labor Force participation rate is 80% and the unemployment rate is 12.5%.

Economics Concept Introduction

Labor force participation:

It refers to that percentage of current total population that is willing to work or is working; which means the labor force in total adult population.

Laborforceparticipation=LaborforceTotaladultpopulation×100

Unemployment rate: It refers to the percentage of the people who are unemployed in the total labor force.

Unemploymentrate=UnemployedLaborforce×100

To determine

(b)

To compute:

The new labor force participation and the unemployment rate.

Expert Solution
Check Mark

Answer to Problem 2P

The labor force participation is 90% and unemployment rate is 16.6%.

Explanation of Solution

Given

New jobs 10million, That means increase of employed worker from 140to150million.

Also addition of 20million in labor force, So new labor force would be 180million

The new employed workers number would be:-

LaborForce=Employed+Unemployed180=150+UnemployedUnemployed=180150Unemployed=30million

Now substitute the values in the formula to obtain labor force participation:-

LaborForceParticipation=laborforceTotalAdultpopulation×100=180200×100=90%

Now, substitute the value to obtain unemployment rate

Unemploymentrate=unemployedlaborforce×100=30180×100=16.6%

Thus, the Labor Force participation is 90% and unemployment rate is 16.6%.

Economics Concept Introduction

Labor force participation:

It refers to that percentage of current total population that is willing to work or is working; which means the labor force in total adult population.

Laborforceparticipation=LaborforceTotaladultpopulation×100

Unemployment rate: It refers to the percentage of the people who are unemployed in the total labor force.

Unemploymentrate=UnemployedLaborforce×100

To determine

(c)

To compute:

The new labor force participation and the unemployment rate.

Expert Solution
Check Mark

Answer to Problem 2P

The labor force participation is 75% and unemployment rate is 6.7%

Explanation of Solution

Non-intuitional population is 200million,

labor force is 160million, and

140million People were employed.

If 10million people stop looking for job: The new labor force would be 160million10million=150million.

Calculate the labor force participation rate:

Laborforceparticipation=LaborforceTotaladultpopulation×100=150million200million×100=75%

Now, to calculate unemployment rate, first calculate total number of unemployed:

Laborforce=Employed+Unemployed150million=140million+UnemployedUnemployed=150million140million=10million

Substitute the values to find the unemployment rate,

Unemploymentrate=UnemployedLaborforce×100=10million150million×100=6.67%

Economics Concept Introduction

Labor force participation:

It refers to that percentage of current total population that is willing to work or is working; which means the labor force in total adult population.

Laborforceparticipation=LaborforceTotaladultpopulation×100

Unemployment rate: It refers to the percentage of the people who are unemployed in the total labor force.

Unemploymentrate=UnemployedLaborforce×100

To determine

(d)

To compute:

The new labor force participation and the unemployment rate.

Expert Solution
Check Mark

Answer to Problem 2P

The labor force participation is 75% and the unemployment rate is 6.67%

Explanation of Solution

Non-intuitional population is 200million,

labor force is 160million, and

140million people were employed.

If 10million people retire,the new labor force would be 160million10million=150million

Calculation of the labor force participation rate:

  Laborforceparticipation=LaborforceTotaladultpopulation×100=150million200million×100=75%

Now, to calculate unemployment rate, first calculate total number of unemployed:

LaborForce=Employed+Unemployed150million=140million+UnemployedUnemployed=150million140million=10million

Substitute the valuesto find the unemployment rate,

Unemploymentrate=UnemployedLaborforce×100=10million150million×100=6.67%

Economics Concept Introduction

Labor force participation:

It refers to that percentage of current total population that is willing to work or is working; which means the labor force in total adult population.

Laborforceparticipation=LaborforceTotaladultpopulation×100

Unemployment rate: It refers to the percentage of the people who are unemployed in the total labor force.

Unemploymentrate=UnemployedLaborforce×100

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