Chapter 3R, Problem 15MCQ

To determine

The type of unemployed worker whose services are no longer demanded.

Explanation of Solution

Structural unemployment is the unemployment that results when workers available for work lack the skills required for the job, or when the number of people seeking jobs is more than the jobs available in the labor market at the given wage rate.

So, a worker who is unemployed because his/her skills are no longer required in the labor market is considered a structurally unemployed person.

Option “b” is correct.

The other options such as:

• Unemployment that occurs due to fluctuations in the business cycle (recession or boom period) is considered cyclical unemployment.
• Disguised unemployment is a hidden unemployment in the economy. The marginal productivity of disguisedly unemployed people is usually zero or very low.
• Frictional unemployment reflects the unemployment that occurs during the time workers spend in a job search.<
• Underemployment is a situation when workers are more qualified than the jobs available in the market.

Economics Concept Introduction

An individual is considered unemployed who is not working, but actively looking for a job.

Types of unemployment are:

• Structural unemployment,
• Frictional unemployment,
• Cyclical unemployment,
• Seasonal unemployment, and
• Disguised unemployment.