Question 1

Yohanna,the CEO of a corporation operating in Ethiopia,decides to raise the wages of her workers,even though she faces an excess supply of labour.Which of the following is an expected result from her decision?

Accepted Answer

A)   It will increase productivity,according to the efficiency wage theory.
B)   It will help eliminate the excess supply of labour if she raises it sufficiently.
C)   It will attract a larger pool of workers to fill vacancies but of lesser quality.
D)   It will decrease profits,according to the efficiency wage theory.E) A) and C)
F) None of the above

Question 2

What does the theory of efficiency wages explain?

Accepted Answer

A)   why setting wages at the equilibrium level may increase unemployment
B)   why it may be in the best interest of firms to offer wages that are above the equilibrium level
C)   why the most efficient way to pay workers is to pay them according to their skills
D)   why it is efficient for firms to set wages at the equilibrium levelE) A) and B)
F) A) and C)

Question 3

Where is the unemployment rate more likely higher?

Accepted Answer

A)   where minimum wages are lower,because people don't take low-paid jobs
B)   in the public sector,because less workers are unionized
C)   where EI benefits are higher,because people have less incentive to find jobs
D)   in the private sector,because minimum wages are higherE) B) and D)
F) All of the above

Question 4

Which cause of unemployment is NOT associated with a wage rate above the equilibrium level?

Accepted Answer

A)   unions
B)   efficiency wages
C)   employment insurance
D)   minimum-wage lawsE) A) and C)
F) B) and D)

Question 5

Most spells of unemployment are short,and most unemployment observed at any given time is long term.How can this be?

Accepted Answer

Most unemployed people in the economy ar...

Question 6

Table 9-1
This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. 
-Refer to Table 9-1.What is the adult female population in Bolivar?

Accepted Answer

A)   35 million
B)   40 million
C)   95 million
D)   105 millionE) All of the above
F) A) and C)

Question 7

Table 9-1
This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. 
-Refer to the Table 9-1.What is the adult male labour-force participation rate in Bolivar?

Accepted Answer

A)   7.40 percent
B)   33.33 percent
C)   37.03 percent
D)   65.22 percentE) C) and D)
F) None of the above

Question 8

Suppose that there is an excess supply of economics professors.Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Accepted Answer

Standard economic theory suggests that i...

Question 9

Government policy can do nothing about the natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 10

How does Statistics Canada define the unemployment rate?

Accepted Answer

A)   as the percentage of those unemployed relative to the percentage employed
B)   as the percentage of the labour force that is unemployed
C)   as the percentage of the adult population that is unemployed
D)   as the percentage of the labour force without full-time employmentE) None of the above
F) C) and D)

Question 11

Figure 9-2 
-Refer to the Figure 9-2.If the minimum wage is $5 or $6,what is the number of people unemployed,respectively?

Accepted Answer

A)   40 and 0
B)   20 and 20
C)   40 and 20
D)   0 and 0E) A) and B)
F) A) and C)

Question 12

Figure 9-2 
-Refer to the Figure 9-2.If the minimum wage rose from $5 to $7,what would happen to unemployment?

Accepted Answer

A)   It would rise by 40.
B)   It would rise by 20.
C)   It would fall by 20.
D)   It would fall by 40.E) A) and D)
F) A) and B)

Question 13

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

Accepted Answer

A) True 
 B)False

Question 14

Unemployment due to job search is best classified as structural unemployment.

Accepted Answer

A) True 
 B)False

Question 15

When a union bargains successfully with an employer,what happens to unemployment and wages in that industry?

Accepted Answer

A)   unemployment and wages increase
B)   unemployment and wages decrease
C)   unemployment decreases and wages increase
D)   unemployment increases and wages decreaseE) B) and C)
F) A) and B)

Question 16

Regarding the categories of unemployment,how does a minimum-wage law compare to firms paying higher-than-equilibrium wages?

Accepted Answer

A)   The minimum wage creates frictional unemployment,while firms paying wages above equilibrium create structural unemployment.
B)   The minimum wage creates structural unemployment,while firms paying wages above equilibrium create frictional unemployment.
C)   The minimum wage and firms paying wages above equilibrium both create structural unemployment.
D)   The minimum wage and firms paying wages above equilibrium both create frictional unemployment.E) None of the above
F) A) and B)

Question 17

Which of the following best defines gross job destruction?

Accepted Answer

A)   the sum of job losses across all firms,either by firms reducing their employment or going out of business,in a given year
B)   the number of jobs created by new firms less jobs lost in established firms in a given year
C)   the number of job losses due to firms reducing their employment in a given year
D)   the number of job losses due to firms going out of business in a given yearE) A) and B)
F) C) and D)

Question 18

Cynthia is collecting unemployment insurance benefits.To continue to receive her benefits,she must be looking for work; however,she only applies at places where she is unlikely to be hired because she doesn't really want to work.People like Cynthia make the reported unemployment rate less than the true rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 19

Which condition causes structural unemployment?

Accepted Answer

A)   Wages are kept above the equilibrium level.
B)   People choose not to work at the equilibrium wage.
C)   Some wages are below the equilibrium level.
D)   Conditions for unemployment insurance benefits relax.E) A) and B)
F) All of the above

Question 20

Who would be counted as unemployed according to official statistics?

Accepted Answer

A)   Shasta,who is currently not working and is waiting for her new job to start
B)   Mary,who worked only 25 hours last week
C)   Karen,who neither has a job nor is looking for one
D)   Kevin,who is a retireeE) A) and D)
F) B) and C)

Exam 9: Unemployment and Its Natural Rate

Where is the unemployment rate more likely higher?

Correct Answer
verified

How does Statistics Canada define the unemployment rate?

Correct Answer
verified

Yohanna,the CEO of a corporation operating in Ethiopia,decides to raise the wages of her workers,even though she faces an excess supply of labour.Which of the following is an expected result from her decision?

Correct Answer
verified

What does the theory of efficiency wages explain?

Correct Answer
verified

Who would be counted as unemployed according to official statistics?

Correct Answer
verified

Which cause of unemployment is NOT associated with a wage rate above the equilibrium level?

Correct Answer
verified

Government policy can do nothing about the natural rate of unemployment.

Correct Answer
verified

Suppose that there is an excess supply of economics professors.Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Correct Answer
verified
Standard economic theory suggests that i...
View Answer

Correct Answer
verified

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

Correct Answer
verified

Which of the following best defines gross job destruction?

Correct Answer
verified

Regarding the categories of unemployment,how does a minimum-wage law compare to firms paying higher-than-equilibrium wages?

Correct Answer
verified

Table 9-1 This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. -Refer to the Table 9-1.What is the adult male labour-force participation rate in Bolivar?

Correct Answer
verified

Table 9-1 This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. -Refer to Table 9-1.What is the adult female population in Bolivar?

Correct Answer
verified

Figure 9-2 -Refer to the Figure 9-2.If the minimum wage is $5 or $6,what is the number of people unemployed,respectively?

Correct Answer
verified

Which condition causes structural unemployment?

Correct Answer
verified

Most spells of unemployment are short,and most unemployment observed at any given time is long term.How can this be?

Correct Answer
verified
Most unemployed people in the economy ar...
View Answer

When a union bargains successfully with an employer,what happens to unemployment and wages in that industry?

Correct Answer
verified

Figure 9-2 -Refer to the Figure 9-2.If the minimum wage rose from $5 to $7,what would happen to unemployment?

Correct Answer
verified

Unemployment due to job search is best classified as structural unemployment.

Correct Answer
verified

Exam 9: Unemployment and Its Natural Rate

Where is the unemployment rate more likely higher?

Correct AnswerverifiedShow Answer

How does Statistics Canada define the unemployment rate?

Correct AnswerverifiedShow Answer

Yohanna,the CEO of a corporation operating in Ethiopia,decides to raise the wages of her workers,even though she faces an excess supply of labour.Which of the following is an expected result from her decision?

Correct AnswerverifiedShow Answer

What does the theory of efficiency wages explain?

Correct AnswerverifiedShow Answer

Who would be counted as unemployed according to official statistics?

Correct AnswerverifiedShow Answer

Which cause of unemployment is NOT associated with a wage rate above the equilibrium level?

Correct AnswerverifiedShow Answer

Government policy can do nothing about the natural rate of unemployment.

Correct AnswerverifiedShow Answer

Suppose that there is an excess supply of economics professors.Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Correct AnswerverifiedStandard economic theory suggests that i...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

Correct AnswerverifiedShow Answer

Which of the following best defines gross job destruction?

Correct AnswerverifiedShow Answer

Regarding the categories of unemployment,how does a minimum-wage law compare to firms paying higher-than-equilibrium wages?

Correct AnswerverifiedShow Answer

Table 9-1 This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. -Refer to the Table 9-1.What is the adult male labour-force participation rate in Bolivar?

Correct AnswerverifiedShow Answer

Table 9-1 This table shows the 2013 data for males and females aged 15 and over in the country of Bolivar. -Refer to Table 9-1.What is the adult female population in Bolivar?

Correct AnswerverifiedShow Answer

Figure 9-2 -Refer to the Figure 9-2.If the minimum wage is $5 or $6,what is the number of people unemployed,respectively?

Correct AnswerverifiedShow Answer

Which condition causes structural unemployment?

Correct AnswerverifiedShow Answer

Most spells of unemployment are short,and most unemployment observed at any given time is long term.How can this be?

Correct AnswerverifiedMost unemployed people in the economy ar...View AnswerShow Answer

When a union bargains successfully with an employer,what happens to unemployment and wages in that industry?

Correct AnswerverifiedShow Answer

Figure 9-2 -Refer to the Figure 9-2.If the minimum wage rose from $5 to $7,what would happen to unemployment?

Correct AnswerverifiedShow Answer

Unemployment due to job search is best classified as structural unemployment.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Standard economic theory suggests that i...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Most unemployed people in the economy ar...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified