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Figure 10-1 Figure 10-1 -Refer to Figure 10-1. If the government imposes a minimum wage of $8, then how many workers will be employed? A) 3000 B) 4000 C) 5000 D) 7000 -Refer to Figure 10-1. If the government imposes a minimum wage of $8, then how many workers will be employed?


A) 3000
B) 4000
C) 5000
D) 7000

E) C) and D)
F) A) and C)

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Sectoral shifts in demand for output


A) create structural unemployment.
B) immediately reduce unemployment.
C) increase unemployment due to job search.
D) do not affect demand for labor.

E) B) and C)
F) A) and D)

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Right-to-work laws


A) guarantee workers the right to form unions.
B) give workers in a unionized firm the right to choose whether to join the union.
C) prevent employers from hiring permanent replacements for workers who are on strike.
D) prevent workers from being fired because of increases in wages brought about by collective bargaining.

E) A) and B)
F) None of the above

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Shannon is a full-time homemaker not currently searching for paid work. Noah is a full-time student who is not looking for a job. Who is included in the labor force by the Bureau of Labor Statistics?


A) only Shannon
B) only Noah
C) both Shannon and Noah
D) neither Shannon nor Noah

E) A) and B)
F) B) and D)

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What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

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According to the theory of efficiency wa...

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The efficiency-wage theory of worker health is


A) more relevant for explaining unemployment in less developed countries than in rich countries.
B) more relevant for explaining unemployment in rich countries than in less developed countries.
C) equally relevant for explaining unemployment in less developed countries and in rich countries.
D) not relevant for explaining unemployment.

E) A) and D)
F) B) and C)

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A typical American worker covered by unemployment insurance receives


A) 50 percent of his former wages for 26 weeks.
B) 50 percent of his former wages for 52 weeks.
C) 100 percent of his former wages for 26 weeks.
D) 100 percent of his former wages for 52 weeks.

E) A) and B)
F) A) and C)

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The unemployment rate never falls to zero.

A) True
B) False

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According to 2009 data on the U.S. population which of the following was correct for people ages 20 and over?


A) Blacks had higher rates of labor-force participation and lower rates of unemployment compared to whites.
B) Blacks had higher rates of labor-force participation and higher rates of unemployment compared to whites.
C) Blacks had similar rates of labor-force participation and lower rates of unemployment compared to whites.
D) Blacks had similar rates of labor-force participation and higher rates of unemployment compared to whites.

E) B) and D)
F) None of the above

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When a union raises the wage above the equilibrium level, it


A) reduces both the quantity of labor supplied and the quantity of labor demanded.
B) reduces the quantity of labor supplied and raises the quantity of labor demanded.
C) raises the quantity of labor supplied and reduces the quantity of labor demanded.
D) raises both the quantity of labor supplied and the quantity of labor demanded.

E) A) and B)
F) All of the above

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Job search


A) and firms paying wages above equilibrium to improve worker health both create frictional unemployment.
B) creates frictional unemployment, while firms paying wages above equilibrium to improve worker health creates structural unemployment.
C) creates structural unemployment, while firms paying wages above equilibrium to improve worker health creates frictional unemployment.
D) and firms paying wages above equilibrium to improve worker health both create structural unemployment.

E) All of the above
F) B) and C)

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Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well-being.

A) True
B) False

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False

The natural unemployment rate includes


A) both frictional and structural unemployment.
B) neither frictional nor structural unemployment.
C) structural, but not frictional unemployment.
D) frictional, but not structural unemployment.

E) B) and C)
F) A) and B)

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Unemployment insurance


A) reduces the hardship of unemployment, but it also increases the amount of unemployment.
B) reduces the incentive for the unemployed to find and take new jobs.
C) causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.
D) All of the above are correct.

E) A) and D)
F) A) and C)

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D

Jouke is on a temporary layoff from his factory job but has not looked for work in the last four weeks. The Bureau of Labor Statistics counts Jouke as


A) unemployed and in the labor force.
B) unemployed and not in the labor force.
C) employed and in the labor force.
D) employed and not in the labor force.

E) A) and C)
F) C) and D)

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The Bureau of Labor Statistics' "unemployed" category includes those who were not employed, were available for work, and had tried to find employment during the previous 4 weeks.

A) True
B) False

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The Bureau of Labor Statistics reported in 2005 that there were 50.40 million people over age 25 whose highest level of education was some college or an associate degree, 33.86 million of whom were employed and 1.27 million of whom were unemployed. What were the labor-force participation rate and the unemployment rate for this group?


A) 69.7% and 2.5%
B) 69.7% and 3.6%
C) 67.2% and 2.5%
D) 67.2% and 3.6%

E) B) and D)
F) A) and C)

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According to the theory of efficiency wages, it may be profitable for firms to keep wages high even in the presence of a surplus of labor.

A) True
B) False

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Minimum-wage laws


A) create frictional unemployment, while firms paying wages above equilibrium to reduce worker turnover creates structural unemployment.
B) create structural unemployment, while firms paying wages above equilibrium to reduce worker turnover creates frictional unemployment.
C) and firms paying wages above equilibrium to reduce worker turnover both create structural unemployment.
D) and firms paying wages above equilibrium to reduce worker turnover both create frictional unemployment.

E) A) and B)
F) B) and C)

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In the early 1900s, Henry Ford introduced


A) a high-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory.
B) a high-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.
C) a low-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory.
D) a low-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.

E) C) and D)
F) All of the above

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A

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