Name: 
 

Review Quiz 10


Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 
Latoya, an unpaid homemaker who works as a volunteer at the local Red Cross and is currently not looking for a paid job, is counted as
a.
employed and in the labor force.
b.
unemployed and in the labor force.
c.
unemployed but not in the labor force.
d.
not in the labor force.
 
 
Labor Stats
The Labor Market
This table shows the 2003 data for males and females ages 16 and over in the imaginary country of Meditor.

1. Not in labor force
 
a. male: 45 million
 
b. female: 35 million
2. Unemployed
 
a. male: 5 million
 
b. female: 5 million
3. Employed
 
a. male: 85 million
 
b. female: 65 million
 

 2. 
Refer to Labor Stats. What is the adult female unemployment rate in Meditor?
a.
4.76%
b.
7.14%
c.
7.69%
d.
14.29%
 

 3. 
Matt loses his job and decides to sit on the beach rather than looking for work the next few months. Other things the same, the unemployment rate
a.
increases, and the labor-force participation rate is unaffected.
b.
increases, and the labor-force participation rate decreases.
c.
decreases, and the labor-force participation rate increases.
d.
decreases, and the labor-force participation rate decreases.
 

 4. 
Between 2004 and 2005, the country of Aquilonia reported an increase in the number of people who were employed. It also reported an increase in the unemployment rate. Which of the following would best explain the two reports?
a.
There was an increase in the size of the labor force between 2004 and 2005.
b.
There was a decrease in the size of the labor force between 2004 and 2005.
c.
There was an increase in the size of the adult population between 2004 and 2005.
d.
The two reports are contradictory and can't be reconciled.
 

 5. 
Which group has the highest labor-force participation rate?
a.
black females
b.
white females
c.
white males
d.
There are no significant differences in participation rates across these groups.
 

 6. 
The labor-force participation rates among U.S. men since World War II
a.
decreased because of longer schooling, an increase in stay-at-home dads, earlier retirement, and longer lives.
b.
decreased because of longer lives, laws that prevent mandatory retirement, and an increase in stay-at-home dads.
c.
increased because of better unemployment insurance, laws that prevent mandatory retirement, and laws that prevent age discrimination in hiring.
d.
increased because of easier job searches, better training, and laws that prevent mandatory retirement and age discrimination in hiring.
 

 7. 
John is a stockbroker. He has had several job offers, but he has turned them down because he thinks he can find a firm that better matches his tastes and skills. Curtis has looked for work as an accountant for some time. While the demand for accounts doesn’t appear to be falling, there seems to be more people applying than jobs available.
a.
John and Curtis are both frictionally unemployed.
b.
John and Curtis are both structurally unemployed.
c.
John is frictionally unemployed, and Curtis is structurally unemployed.
d.
John is structurally unemployed, and Curtis is frictionally unemployed.
 

 8. 
Consumers decide to buy more computers and fewer typewriters. As a result, computer companies expand production while typewriter companies lay-off workers. This is an example of
a.
structural unemployment created by efficiency wages.
b.
cyclical unemployment created by a recession.
c.
frictional unemployment created by a sectoral shift in demand.
d.
None of the above is correct.
 

 9. 
Frictional unemployment can be the consequence of
a.
workers leaving existing jobs to find ones they like better.
b.
an industry declining while another is growing.
c.
changes in the working conditions offered by competing firms.
d.
All of the above are correct.
 

 10. 
Evidence from research studies by economists
a.
show that increased unemployment benefits decrease the job-search efforts of the unemployed.
b.
show that increased unemployment benefits have virtually no effect on the job-search efforts of the unemployed.
c.
show that increased unemployment benefits increases the job-search effort of the unemployed.
d.
find no clear-cut evidence on what increased unemployment benefits do to job-search efforts.
 

 11. 
Of women earning an hourly wage, about what percent earn a wage at or below the minimum wage?
a.
4%
b.
10%
c.
25%
d.
33%
 

 12. 
Which of the following is correct?
a.
Minimum-wage laws are the predominant cause of unemployment in the U.S.
b.
Right-to-work laws provide programs to train people who have lost their jobs due to sectoral shifts.
c.
There's not much evidence that unemployment insurance reduces search efforts by the unemployed.
d.
If an industry unionizes, it increases wages in that industry while decreasing wages in other industries.
 

 13. 
When employers pay efficiency wages, they pay wages
a.
below equilibrium to increase profitability.
b.
above equilibrium to increase productivity.
c.
set by the government to counter charges of unfair labor practices.
d.
at a level that would prevail in the absence of unions.
 

 14. 
Suppose that in the economy in general efficiency wages become more common. Economists would predict that this would
a.
increase the quantity demanded and decrease the quantity supplied of labor thereby decreasing the natural rate of unemployment.
b.
decrease the quantity demanded and increase the quantity supplied of labor thereby increasing the natural rate of unemployment.
c.
increase the quantity demanded and decrease the quantity supplied of labor thereby increasing the natural rate of unemployment.
d.
decrease the quantity demanded and increase the quantity supplied of labor thereby decreasing the natural rate of unemployment.
 

 15. 
Which of the following causes of unemployment is not associated with a continuing excess supply of labor?
a.
minimum-wage laws
b.
unions
c.
job search
d.
efficiency wages
 



 
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