Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 24, Problem 7MCQ
To determine
To select:
The option that correctly explains about job rationing.
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An increase in the supply of labor will ________ wages and ________ employment.A.decrease; decreaseB.increase; increaseC.increase; decreaseD.decrease; increase
If the wage is above the equilibrium wage because of a binding minimum wage, the result
cyclical unemployment
O structural unemployment
O seasonal unemployment
O frictional unemployment
Figure 15-12
Price level
LRAS, LRAS₂
B
*
$10
104
100
Thr
AD₁
11 11.3
SRAS,
SRAS₂
AD₂
Real GDP
Refer to Figure 15-12. In the dynamic AD-AS model, if the
economy is at point A in year 1 and is expected to go to
point B in year 2, and the Federal Reserve pursues no policy,
then at point B
Chapter 24 Solutions
Foundations of Economics (8th Edition)
Ch. 24 - Prob. 1SPPACh. 24 - Prob. 2SPPACh. 24 - Prob. 3SPPACh. 24 - Prob. 4SPPACh. 24 - Prob. 5SPPACh. 24 - Prob. 6SPPACh. 24 - Prob. 7SPPACh. 24 - Prob. 8SPPACh. 24 - Prob. 9SPPACh. 24 - Prob. 10SPPA
Ch. 24 - Prob. 11SPPACh. 24 - Prob. 1IAPACh. 24 - Prob. 2IAPACh. 24 - Prob. 3IAPACh. 24 - Prob. 4IAPACh. 24 - Prob. 5IAPACh. 24 - Prob. 6IAPACh. 24 - Prob. 7IAPACh. 24 - Prob. 8IAPACh. 24 - Prob. 9IAPACh. 24 - Prob. 1MCQCh. 24 - Prob. 2MCQCh. 24 - Prob. 3MCQCh. 24 - Prob. 4MCQCh. 24 - Prob. 5MCQCh. 24 - Prob. 6MCQCh. 24 - Prob. 7MCQCh. 24 - Prob. 8MCQ
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- In the figure above, if a minimum wage of $6 per hour has been imposed and the labor demand curve then shifts from Do to D1 the wage rate and the amount of employment A.falls; decreases B.does not change; increases C.does not change; decreases Pay attention that word above is "employment," not"unemployment" D) falls, increasesarrow_forwardReginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered: O underemployed. O unemployed. employed in the underground economy. out of the labor force.arrow_forwardThe 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.arrow_forward
- Describe how a rise in the wage rate might cause unemployment.arrow_forwardPeter is laid off from his job as a bank teller due to the rise of online banking transactions which makes his job redundant. He is experiencing what kind of unemploymentarrow_forwardHow does an increase in the minimum wage affect unemployment levels in a perfectly competitive labor market? A. It has no effect on unemployment levels. B. It decreases unemployment levels. C. It increases unemployment levels. D. It initially increases but eventually decreases unemployment levels.arrow_forward
- According to the theory of efficiency wages,a. firms may find it profitable to pay above-equilibrium wages.b. an excess supply of labor puts downward pressure on wages.c. sectoral shifts are the main source of frictional unemployment.d. right-to-work laws reduce the bargaining power of unionsarrow_forwardAn efficiency wage is A. an above-market wage paid by a firm to maximize worker productivity and reduce turnover that raises the level of structural unemployment. B. an above-market wage paid by a firm to maximize the output of the firm that increases the level of structural unemployment. C. a below-market wage paid by a firm to maximize firm profits and reduce turnover that reduces the natural rate of unemployment. D. an above-market wage paid by a firm to maximize worker productivity and reduce turnover that reduces the level of structural unemployment. E. equal to the market-clearing wage, so that social welfare is maximized while maintaining the level of frictional unemployment.arrow_forwardIf some employed workers exit the labor force, the unemployment rate will be ______arrow_forward
- Full employment means which of the following is zero: O frictional unemployment O cyclical unemployment natural unemployment structural unemploymentarrow_forward3. Why is there unemployment in a labor market with flexible wages? Explain.arrow_forwardGive two reasons why a firm might want to pay workers above the competitive wage and how can this lead to unemployment?arrow_forward
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