Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 21, Problem 35CTQ
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In which of the following cases will we observe unemployment?
the quantity of labor demanded is greater than the quantity of labor supplied at the going wage rate.
the wage is below the level that balances supply and demand for labor.
there is a shortage of workers.
the quantity of labor demanded is less than the quantity of labor supplied at the going wage rate.
The rate of job separations in the economy is 0.013 (1.3 percent) and rate of job finding is 0.25 (25 percent). a) If the economy has 500 workers in the labor force, calculate the unemployment rate and the number of unemployed in the steady state. b) If the rate of job separations is 1 percent, what happens to the unemployment rate and the number of unemployed in the steady state? c) If labor force suddenly increases by 20 workers who are seeking work (and the rate of job separations remains at 1 percent), what is the immediate change in the unemployment rate? What is the new steady-state unemployment rate? Draw a graph on how unemployment rate evolves in time.
Describe how a rise in the wage rate might cause unemployment.
Chapter 21 Solutions
Principles of Economics 2e
Ch. 21 - Suppose the adult population over the age of 16 is...Ch. 21 - Using the above data, what is the unemployment...Ch. 21 - Over the long term, has the U.S. unemployment rate...Ch. 21 - Whose unemployment rates are commonly higher in...Ch. 21 - Beginning in the 1970s and continuing for three...Ch. 21 - Is the increase in labor force participation rates...Ch. 21 - Many college students graduate from college before...Ch. 21 - What is the difference between being unemployed...Ch. 21 - How do you calculate the unemployment rate? How do...Ch. 21 - Are all adults who do not hold jobs counted as...
Ch. 21 - If you an? out of school but working part time,...Ch. 21 - What happens to the unemployment rate when...Ch. 21 - What happens to the labor force participation rate...Ch. 21 - What are some of the problems with using the...Ch. 21 - What criteria do the BLS use to count someone as...Ch. 21 - Assess whether the following would be counted as...Ch. 21 - Are U.S. unemployment rates typically higher,...Ch. 21 - Are U.S. unemployment rates distributed evenly...Ch. 21 - When would you expect cyclical unemployment to be...Ch. 21 - Why is there unemployment in a labor market with...Ch. 21 - Name and explain some of the reasons why wages are...Ch. 21 - What term describes the remaining level of...Ch. 21 - What forces create the natural rate of...Ch. 21 - Would you expect the natural rate of unemployment...Ch. 21 - Would you expect the natural rate of unemployment...Ch. 21 - What is frictional unemployment? Give examples of...Ch. 21 - What is structural unemployment? Give examples of...Ch. 21 - After several years of economic growth, would you...Ch. 21 - What type of unemployment (cyclical, frictional,...Ch. 21 - Using the definition of the unemployment rate, is...Ch. 21 - Is a decrease in the unemployment rate necessarily...Ch. 21 - If many workers become discouraged from looking...Ch. 21 - Would you expect hidden unemployment to be higher,...Ch. 21 - Is the higher unemployment rates for minority...Ch. 21 - While unemployment is highly negatively correlated...Ch. 21 - Why do you think that unemployment rates are lower...Ch. 21 - Do you think it is rational for workers to prefer...Ch. 21 - Under what condition would a decrease in...Ch. 21 - Under what condition would an increase in the...Ch. 21 - As the baby boom generation retires, the ratio of...Ch. 21 - Unemployment rates have been higher in many...Ch. 21 - Is it desirable to pursue a goal of zero...Ch. 21 - Is it desirable to eliminate natural unemployment?...Ch. 21 - The U.S. unemployment rate increased from 4.6 in...Ch. 21 - A country with a population of eight million...Ch. 21 - A government passes a family-friendly law that no...Ch. 21 - As the baby boomer generation retires, what should...
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- Suppose that a country experiences a reduction in productivity – that is, an adverse shock to the production function.A) What happens to the labor demand curve? Show the change on the graph.B) How would this change in productivity affect the unemployment rate if the labor market is always in equilibrium?Explain your answer referring to the graph.arrow_forwardFrictional unemployment seem to depend on the age distribution of the population. Describe why this is so.arrow_forwardStructural Unemployment occurs when wage is kept above equilibrium. There are three reasons for this. Explain.arrow_forward
- In March 2016 American employers added 215,000 positions to their payrolls, bringing the average job increase for the year to more than 200,000 per month. At the same time, though, the official unemployment rate actually went up, from 4.9% to 5.0%. What is a likely explanation? The labor force has decreased “Discouraged workers” re-entered the labor force The number of people working part-time has increased The number of volunteering positions in the U.S. economy has decreasedarrow_forwardSuppose that there is a recession similar to the one in 2008. What would happen to the equilibrium wage if the unemployment rate increased to 10%? Show this first on the labor discipline graph (nominal wage), then on the wage-setting curve graph (real wage).arrow_forwardDescribe the natural rate of unemploymentarrow_forward
- Hi, I need help solving Part 5 of this Macroeconomics question (outlined in red). The feedback given with my incorrect response was: "The answer you entered for the new labor force participation rate is not correct. How are discouraged workers taken into account in the labor force participation rate? Remember to multiply by 100 in order to obtain the percentage."arrow_forwardIn 2007, the first generation of the iPhone sold for $499. The average cost of an iPhone today is $999. At a press conference just outside a telephone museum in Cle Elum, WA, the CEO of Apple, Tim Cook, stated that the rise in cost is purely due to inflation. Use the Consumer Price Index to either verify or falsify Cooks’s statement. Is he correct or wrong? Work must be shown to support your answer or no credit. Use the CPI values from January of each year.arrow_forwardSome Firms Struggle to Hire Despite High Unemployment Matching people with available jobs is always diffi- cult after a recession as the economy remakes itself. But Labor Department data suggest the disconnect is particularly acute this time. Since the recovery began in mid-2009, the number of job openings has risen more than twice as fast as actual hires. If the job mar- ket were working normally, openings would be get- ting filled as they appear. Some five million more would be employed and the unemployment rate would be 6.8%, instead of 9.5%. Source: The Wall Street Journal, August 9, 2010 9. If the labor market is working properly, why would there be any unemployment at all?arrow_forward
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