Chapter 22 / 6

Employment and Unemployment

1) AM22\ D \\Labor Force\1\\ According to official Bureau of Labor Statistics definitions, the labor force includes: (a) the entire population over 18 years of age. (b) the entire population over 15 years of age. (c) employed persons only. (d) military personnel in the U.S. and civilians 16 and older who either have jobs or are unemployed. 2) AM22\ D \\ Labor Force Measures \2\\ Conceptually, the measured labor force of the United States does not include: (a) unemployed civilians. (b) members of U.S. Armed Forces stationed inside the United States. (c) employed civilians. (d) members of U.S. Armed Forces stationed abroad. (e) illegal immigrants who work in the United States. 3) AM22\ A \\Labor Force\2\\ A labor force participation rate [LFPR] is computed as the: (a) percentage of the population being considered who are either employed or unemployed. (b) total number of managers and administrators as a percentage of the work force. (c) people employed as a percentage of the population being considered (d) percentage of all physically-able non-institutionalized adults who are not in school. 4) BM24\B\\ Classical Theory of Unemployment\2\\ The local piano factory closed its doors forever and Paige, a piano tuner, has not landed a position despite job search that has lasted four months. Paiges assertion of involuntary unemployment would be met most skeptically by an advocate of: (a) the labor union movement. (b) classical macroeconomic theory. (c) Marxist analysis. (d) Keynesian theory. (e) Malthusian population theory.

Ralph Byrns

Chapter 22 / 6: Employment and Unemployment

Test Bank One

5) AM22\ D \\ Voluntary Unemployment \2\\ Dana lost a job as an editorial writer because of missed deadlines, frequent absences, and constant whining about low pay and the anti-intellectual environment. Finding a position that pays enough to cover college loans and living expenses appears quite difficult. Danas joblessness is an example of: (a) involuntary unemployment. (b) the discouraged worker effect. (c) fraudulent unemployment. (d) voluntary unemployment. (e) the discouraged employer effect. 6) AM22\ C \\ Voluntary Unemployment \2\\ Carl completed a degree in sociology last semester. Hes been offered a position as the manager of McDonalds, but is holding out for a better offer. Carl is: (a) involuntarily unemployed. (b) structurally unemployed. (c) voluntarily unemployed. (d) cyclically unemployed. (e) seasonally unemployed. Figure A2207

7) AM22\ C \A2207\Excess Supply and Unemployment\2\\ The horizontal distance in the shaded region of this graph represents: (a) surpluses of unemployment and unemployment compensation. (b) unionized employment and the union wage premium. (c) surpluses of labor that result in unemployment. (d) excess profits for firms created by artificially low wages. (e) shortages of labor and the increase in the wage rate.

Test Bank One

8) AM22\ A \A2207\Excess Supply and Unemployment\2\\ If the wage rate is $15 per hour, the rate of unemployment in this market will be: (a) 50 percent. (b) 100 workers. (c) 300 workers. (d) 400 workers. 9) AM22\ D \A2207\Excess Supply and Unemployment\2\\ If this labor market was characterized by high rate of unemployment, reasonable explanations would not include: (a) union contracts that kept wages above the equilibrium that would exist if the market were competitive. (b) an excessive minimum legal wage. (c) a widespread practice of efficiency wage policies by employers. (d) widespread shortages in markets for the outputs these workers produce. 10) AM22\ D \A2207\Cyclical Unemployment\2\\ If this labor market reflects the experience of the economy as a whole and the original demand curve D0 yielded equilibrium at point b, then the unemployment shown between point a and point b would be: (a) normal frictional unemployment. (b) extreme seasonal unemployment. (c) a result of a trade war and international outsourcing. (d) cyclical unemployment characteristic of a deep recession. 11) AM22\ C \A2207\Efficiency Wages\2\\ A wage rate of $15 per hour in this market might reasonably be explained by: (a) lack of competition in the market for output. (b) flexible wages, interest rates, and output prices. (c) employers relying on a strategy of setting efficiency wages. (d) this industry being subjected to significant competition from imports. 12) AM22\ B \A2207\Excess Supply and Unemployment\2\\ Explanations for why the wage rate in this market persists at $15 per hour would not include: (a) a union wage contract. (b) flexible output prices. (c) efficiency wages. (d) a minimum legal wage of $15 per hour. (e) an implicit labor contract.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

13) AM22\ B \\Voluntary Unemployment\2\\ People could most reasonably be viewed as voluntarily unemployed if they: (a) have the wrong skills for job vacancies. (b) refuse to work for the minimum wage. (c) do housework instead of seeking a paying job. (d) go to college because jobs requiring only a high school diploma pay inadequately. 14) AM22\ C \\Involuntary Unemployment\2\\ Consider an individual with severely limited aptitude but who is willing and eager to work. Suppose transactions costs facing the individual of commuting to every potential job would exceed the individuals potential value of the marginal product and wage rate for that job. It would be most reasonable to view this potential worker as: (a) frictionally unemployed. (b) structurally unemployed. (c) involuntarily unemployed. (d) cyclically unemployed. (e) marginally unemployed. 15) AM22\ D \\Involuntary Unemployment\2\\ Examples of unemployment that is not voluntary would most reasonably include: (a) Tom the lawyer staying home with the kids despite receiving job offers. (b) Bill refusing to work in the low paying jobs he is offered. (c) Sandy doing non-profit volunteer work because her husband is a highly paid CEO. (d) Kevin being unable to find any work as a cook after Wendys fired him for eating fries on the job. (e) Kelly indecisively considering multiple job offers after graduating from college. 16) AM22\B\\ Classical Theory of Unemployment \2\\ Involuntary unemployment is thought by classical macroeconomists to be impossible because: (a) employers conscientiously hire the best workers. (b) supply creates its own demand and wages, prices, and interest rates are flexible. (c) collective bargaining yields full-employment wages. (d) federal laws forbid wage discrimination. 17) AM22\ B \\ Classical Theory of Unemployment \2\\ Classical macroeconomics concludes that almost all unemployment is voluntary by assuming that: (a) ambitious workers can always find a job that pays a living wage in the long run. (b) job-seekers can find work quickly if they are willing to accept sufficiently low wages. (c) sticky wages increase the number of jobs available. (d) employers universally adopt efficiency wage policies. (e) legal wage floors prevent workers from being exploited in sweat shops.

Test Bank One

18) AM22\ E \\ Involuntary Unemployment \2\\ When the National Hockey League cancelled the 2004-2005 hockey season, professional hockey players under contract to NHL teams temporarily experienced: (a) structural unemployment. (b) seasonal unemployment. (c) frictional underemployment. (d) contingent unemployment. (e) involuntary unemployment. 19) AM22\ B \\Sticky Wages\2\\ Wages that persistently exceed the wage rates that would generate a full employment equilibrium in the labor market are described as: (a) inadequate to attract workers to the industry. (b) sticky. (c) wage ceilings. (d) exploitative. (e) customary wages. 20) AM22\ D \\ Sticky Wages \2\\ Sticky wages are not in part a consequence of: (a) minimum wages laws. (b) long-term labor union contracts. (c) efficiency wage policies by firms. (d) involuntary unemployment. 21) AM22\ A \\ Sticky Wages \2\\ Nominal wages may be less flexible [more sticky] if: (a) workers resist pay cuts because they can expect unemployment compensation if they are laid off. (b) a flood of illegal immigrants increases competition for US citizens jobs. (c) foreign firms increasingly establish assembly plants in the United States. (d) factory workers are increasingly structurally unemployed because of automation. 22) AM22\ A \\Sticky Wages\2\\ Sticky wages during recessions can lead to: (a) involuntary unemployment. (b) faster clearing of the labor market. (c) wage hikes to accommodate falling demands for labor. (d) voluntary unemployment.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

23) AM22\ A \\Sticky Wages\2\\ The argument that all employment is voluntary ignores the existence of: (a) wage stickiness beyond the control of individual workers. (b) variations in the skills of workers. (c) flexible output prices. (d) economic scarcity. (e) supply and demand curves. 24) AM22 \ D \\ Efficiency Wages \ 2 \\ The theory of efficiency wages is predicated on the idea that: (a) wage structures reflect differences in the costs of accumulating human capital. (b) minimum wage laws reduce the incentives of workers to be productive. (c) agricultural wages are less stable than salaries paid by industrial firms. (d) employees work harder if paid wages that exceed the market-clearing wage rate. (e) worker productivity increases when the capital-to-labor ratio increases. 25) AM22\A\\Efficiency Wages\2\\ If in attempts to secure diligent performance, employers pay efficiency wages that exceed employees opportunity costs: (a) wages will tend to be sticky. (b) total costs are inevitably higher than when wages equal the workers opportunity costs. (c) worker morale is reduced. (d) the most efficient approach is a profit sharing system. (e) workers are more likely to join a union. 26) AM22\D\\Efficiency Wages\2\\ Firing a worker who regularly goofs off and calls in sick may be an ineffective technique for providing incentives to deal with a moral hazard problem if: (a) the worker sues the firm. (b) the unemployment rate is high. (c) worker productivity is low. (d) labor markets are perfectly competitive. 27) AM22\ B \\Efficiency Wages\2\\ All employees will tend to be more conscientious and diligent if an employer: (a) uses a top-down approach to management. (b) pays higher wages than the workers could expect in any alternative jobs. (c) uses a strict seniority system to determine raises and promotions. (d) uses fixed instead of variable interval performance evaluation techniques. (e) establishes wage ceilings for top managers.

Test Bank One

28) AM22\ A \\Efficiency Wages\2\\ The theory of efficiency wages concludes that: (a) paying higher wages boosts worker diligence and productivity. (b) only high-tech firms pay wages that are efficient. (c) minimum wage laws boost industrial productivity. (d) salary caps for top executives boost subordinates productivity. 29) AM22\ A \\ Efficiency Wages and Shirking \2\\ Reduced shirking by employees and increased labor productivity may be among the predictable results of: (a) increasingly widespread adoption of efficiency wage policies by employers. (b) the wage-price flexibility assumed in classical macroeconomic models. (c) reduced real wages caused when price inflation exceeds wage inflation. (d) top-down decision making in vertically integrated bureaucracies. (e) greater membership in labor unions. 30) AM22\ D \\Labor Force Measures\2\\ The rate of unemployment and other statistics on the labor force are assembled by the federal: (a) Bureau of Economic Analysis, which is part of the Department of Commerce. (b) Bureau of Records, which is part of the Congressional Budget Office. (c) Bureau of Vital Statistics, which is part of the Department of the Interior. (d) Bureau of Labor Statistics, which is part of the Department of Labor. 31) AM22\ D \\ Measured Unemployment \1\\ The unemployment rate is defined as the number of: (a) employed as a percentage of the labor force. (b) voluntarily employed as a percentage of the labor force. (c) involuntarily unemployed as a percentage of the labor force. (d) unemployed as a percentage of the labor force. 32) AM22\ C \\ Measured Unemployment \2\\ A city has a population of 76,000 people over the age of 16 (the legal age for employment.) Among this population, 12,550 people are unemployed, and 58,420 people are employed in the labor force. The unemployment rate for this city is: (a) roughly 14.8%. (b) roughly 15.6%. (c) roughly 16.5%. (d) roughly 17.7%. (e) roughly 21.5%.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

33) AM22\D\\Measured Unemployment\2\\ Official unemployment data are based on Bureau of Labor Statistics surveys of: (a) all firms in the country. (b) all households in the country. (c) all workers in the country. (d) a sample of households in the country. 34) AM22\ E \\ Measured Unemployment\2\\ Biases in measured unemployment rates are least attributable to instances when people: (a) do not want a period of unemployment to appear on their resumes so they claim to be consultants but lack any paid work. (b) dishonestly claim to be looking for work even though they do not want jobs. (c) work part-time but would like to find full-time positions. (d) would like jobs but have quit searching for work because they are so pessimistic about their employment prospects. (e) are employed even though they would not normally be counted as in the labor force because they are less than 16 years old. 35) AM22\ B \\ Measured Unemployment\2\\ Discrepancies between conceptual unemployment and official unemployment statistics are not aggravated when: (a) Jim, a skilled magician, stops looking for gigs because he has been unable to book any shows in months. (b) Jess hates her job as a ditch digger and intends to quit soon. (c) Clem channel surfs all day and collects unemployment checks even though he doesnt really want a job. (d) Amy took a job as a waitress for 10 hours a week, but wants a full time job. 36) AM22\ D \\ Measured Unemployment\2\\ You would be statistically counted as unemployed if you were: (a) temporarily out of work because of a labor union strike. (b) on vacation. (c) not looking for a job during the preceding month. (d) waiting for recall to a job from which you were recently laid off. 37) AM22\ A \\ Measured Employment \1\\ An ex-convict who secures a job as a college president by fraudulently claiming a Ph.D. in Marketing is officially classified by the Bureau of Labor Statistics as: (a) employed. (b) unemployed. (c) unreliable. (d) overemployed.

Test Bank One

38) AM22\ A \\Measured Employment\2\\ Black market employment (off-the-books work) does NOT result in: (a) increases in employment statistics. (b) upwardly biased unemployment data. (c) increased actual employment. (d) reduced actual unemployment. 39) AM22\ D \\ Discouraged Workers \1\\ Discouraged workers are workers who are: (a) disenchanted with their jobs. (b) employed in jobs that underutilize their skills. (c) unhappy because search hasnt generated an acceptable job. (d) so pessimistic about job prospects that they quit looking for work. 40) AM22\ B \\ Discouraged Workers \2\\ If many workers who have looked for jobs for a long time give up their search, but are still willing and able to work, this: (a) increases real unemployment. (b) reduces measured unemployment. (c) increases the labor force. (d) promotes inflation. 41) AM22\ B \\ Discouraged Workers \2\\ The discouraged worker effect is likely to be strongest in: (a) periods of low unemployment rates. (b) economically depressed regions. (c) periods when high unemployment tends to be of short duration. (d) the services sector. 42) AM22\ A \\ Discouraged Workers \2\\ People who have quit actively seeking employment following fruitless attempts to find jobs but who are willing and eager to work for a wage commensurate with their skills are known as: (a) discouraged workers. (b) disemployed workers. (c) contingency workers. (d) alienated workers. (e) disgruntled workers.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

43) AM22\ D \\ Discouraged Workers \2\\ People who fit a reasonable economic definition of unemployment, but who are not counted as unemployed according to official measures of the labor force include: (a) dishonest non-workers. (b) all part-time workers. (c) full time students. (d) discouraged workers. 44) AM22\ A \\ Post-Industrial Economics\2\\ Roughly 80 percent of employed American workers: (a) provide services. (b) are directly engaged in export industries. (c) directly produce tangible commodities. (d) are college graduates. (e) experience an extended period of unemployment in an average year. 45) AM22\ A \\ Casual Labor \ 1 \\ Workers who rely on daily employment without regular hours or a wage contract supply their services as: (a) casual labor. (b) informal workers. (c) sharecroppers. (d) underemployed workers. (e) the contingency work force. 46) AM22\ E \\ Contingency Labor Force \ 1 \\ People who work only part time or who misidentify themselves as self-employed consultants but would actually like full time employment and are willing to work for wages commensurate with their skills and diligence comprise the: (a) reserve army of the unemployed. (b) excess supply of labor. (c) migratory work force. (d) casual labor sector. (e) contingency labor force. 47) AM22\ E \\ Categories of Unemployment \2\\ Broad economic categories of unemployment do not conventionally include a category called: (a) frictional unemployment. (b) structural unemployment. (c) induced unemployment. (d) cyclical unemployment. (e) rational unemployment.

Test Bank One

10

48) AM22\ A \\ Frictional Unemployment \2\\ Frictional unemployment facilitates matching workers with jobs that better employ their skills and preferences, a function categorized as a(n): (a) allocative benefit of unemployment. (b) disciplinary benefit of unemployment. (c) frictional benefit of unemployment. (d) maximizing benefit of unemployment. (e) transitional benefit of unemployment. 49) AM22\ A \\Frictional Unemployment\1\\ Unemployment arising because transaction costs are incurred when people switch jobs is called: (a) frictional unemployment. (b) structural unemployment. (c) induced unemployment. (d) cyclical unemployment. 50) AM22\ A \\Frictional Unemployment\3\\ Frictional unemployment is a consequence of: (a) transaction costs [imperfect information and costly mobility]. (b) mismatches between the skills job applicants possess and the skill requirements of vacant jobs. (c) minimum wage laws and the inefficient incentives imbedded in unemployment compensation programs. (d) seasonal variations in the demands for labor. 51) AM22\ A \\Frictional Unemployment \2\\ When Jane moves to another city and spends time looking for a new job, her unemployment would be classified as: (a) frictional unemployment. (b) structural unemployment. (c) seasonal unemployment. (d) cyclical unemployment. 52) AM22\D\\Frictional Unemployment\2\\ Unemployment because workers have not yet found jobs with personally satisfactory wages is: (a) structural unemployment. (b) demand-deficiency unemployment. (c) the discouraged-worker effect. (d) frictional unemployment.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

11

53) AM22\ D \\Frictional Unemployment \2\\ A synonym for frictional unemployment is: (a) structural unemployment. (b) induced unemployment. (c) cyclical unemployment. (d) search unemployment. (e) seasonal unemployment. 54) AM22\ B \\ Structural Unemployment \2\\ Structural unemployment occurs primarily because: (a) of seasonal weather patterns or holidays, etc. (b) many people lack skills demanded in labor markets. (c) job seekers incur transaction costs. (d) some firms fail because of poor planning. (e) our economy follows boom-bust cycles. 55) AM22\ C \\ Structural Unemployment \2\\ Printers who are unemployed because their skills have been replaced by technological changes in typesetting and printing are examples of: (a) demand-deficiency unemployment. (b) frictional unemployment. (c) structural unemployment. (d) discouraged workers. 56) AM22\ D \\Structural Unemployment \2\\ After the pet rock fad is long gone, a professional rock walker would be likely to experience: (a) seasonal unemployment. (b) voluntary unemployment. (c) excess demand for their services. (d) structural unemployment. 57) AM22\A\ \ Structural Unemployment \2\\ A deposed dictator willing to return to his previous job at his previous income would be suffering from: (a) structural unemployment. (b) seasonal unemployment. (c) search unemployment. (d) cyclical unemployment. (e) frictional unemployment.

Test Bank One

12

58) AM22\ B \\Seasonal Unemployment\2\\ An example of seasonal sources of unemployment would NOT include: (a) tax preparers in late April. (b) hamburger fryers at the local diner. (c) Christmas help at a department store. (d) lifeguards at the local pool. 59) AM22\ A \\Seasonal Unemployment \2\\ Seasonal unemployment generally results from: (a) regular patterns in such things as weather, holidays, and school attendance. (b) fluctuations in Aggregate Demand. (c) general business recessions. (d) inadequate macroeconomic policies. 60) AM22\A \\Seasonal Unemployment \1\ Seasonal unemployment: (a) varies because of weather, production cycles, and other regular changes over the course of a year. (b) rises for teenagers during winter. (c) arises during general business recessions. (d) is the focus of government fiscal and monetary policies. (e) is frictional in nature. 61) AM22\ A \\ Induced Unemployment\2\\ Induced unemployment is LEAST relevant for a: (a) machinist laid off by automation. (b) person drawing unemployment compensation to help pay the costs of looking for a perfect job. (c) teenager who could provide work worth $3.00 per hour, but not enough to cover the minimum wage of $5.15 per hour. (d) welfare recipient who would lose all benefits by accepting a minimum wage job. 62) AM22\ B \\ Induced Unemployment \2\\ Measured unemployment rates tend to be overstated by the activities of: (a) discouraged workers. (b) dishonest non-workers. (c) part time workers. (d) voluntarily unemployed workers.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

13

63) AM22\ B \\Induced Unemployment\2\\ If the number of weeks an unemployed worker can draw unemployment compensation were reduced, the type of unemployment likely to fall most sharply would be: (a) structural unemployment. (b) induced unemployment. (c) cyclical unemployment. (d) frictional unemployment. (e) seasonal unemployment. 64) AM22\ C \\Induced Unemployment \2\\ Induced unemployment is created by: (a) black markets that arent included in employment figures. (b) reduction of minimum wages. (c) programs that reduce the opportunity cost of being unemployed. (d) the elimination of handouts. 65) AM22\ B \\ Induced Unemployment \3\\ Induced unemployment is least likely to increase as a consequence of: (a) laws requiring payment of higher minimum wages. (b) low-skill jobs previously done by Americans being outsourced to foreign countries. (c) lowering the earned income ceilings that disqualify poor people from eligibility for welfare payments. (d) higher payments of unemployment compensation. 66) AM22\ C \\ Induced Unemployment \2\\ Naomi works at fast food restaurant. Her boss has recently told her that a new minimum wage law means that she will be laid off. She responds, But I am willing to work for much less than that! Naomi is a victim of: (a) structural unemployment. (b) frictional unemployment. (c) induced unemployment. (d) cyclical unemployment. (e) unfair unemployment. 67) AM22\ D \\ Induced Unemployment \2\\ Induced unemployment is most likely the problem when: (a) a typist accustomed to typewriters is replaced because computers are more efficient. (b) a Christmas tree harvester is laid off on December 25. (c) the price of coal falls and coal miners are laid off. (d) an unskilled immigrant willing to work below the minimum wage cannot find a job. (e) a car salesman paid strictly on commission makes no sales during a recession.

Test Bank One

14

68) AM22\ B \\Cyclical Unemployment\1\\ A downturn in the level of macroeconomic activity tends to drive up the rate of: (a) induced unemployment. (b) cyclical unemployment. (c) structural unemployment. (d) recessionary unemployment. (e) part-time unemployment. 69) AM22\ C \\ Cyclical Unemployment \2\\ If a severe recession has reduced the demand for labor so that Chris, a recent college graduate, cannot find a starting job, then Chris is experiencing: (a) structural unemployment. (b) induced unemployment. (c) cyclical unemployment. (d) frictional unemployment. (e) situational unemployment. 70) AM22\ D \\Cyclical Unemployment\2\\ An example of cyclical unemployment would be Joe losing his job: (a) on the farm after the end of the harvest. (b) because of disability caused by a car wreck. (c) at the candle factory because of the advent of light bulbs. (d) at the auto plant because of low sales during a recession. 71) AM22\ C \\Cyclical Unemployment \2\\ A cyclical downturn would probably have the LEAST impact on workers in: (a) construction. (b) manufacturing. (c) medical services. (d) sales. 72) AM22\ E \\ Cyclical Unemployment \2\\ Predictable consequences of extremely high cyclical unemployment include greater than average rates of: (a) international conflict. (b) sustained labor force participation by older workers. (c) marriages and divorces. (d) galloping inflation. (e) losses of reelection by incumbent politicians.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

15

73) AM22\ A \\Cyclical Unemployment: History \2\\ Unemployment rates were at their highest in the United States during the: (a) 1930s. (b) 1950s. (c) 1970s. (d) 1980s. (d) 1990s. 74) AM22\ B \\ Cyclical Unemployment \3\\ Unemployment rates in the United States dropped to an all-time low of 1.2 percent during the: (a) early 1930s. (b) early 1940s. (c) late 1960s. (d) mid-1970s. (e) late 1990s. 75) AM22\ D \\Cyclical Unemployment: History \2\\ The highest U.S. unemployment rate since the Great Depression occurred during the: (a) post Korean War (1954-60) era. (b) post Vietnam War (1971-73) era. (c) stagflation of 1974-75. (d) recession of 1981-83. (e) depression of 2001-2003. 76) AM22\C \\Cyclical Unemployment \2\ Cyclical unemployment: (a) seldom results from a general business recession. (b) is not one of the governments concerns. (c) affects different groups of workers in different ways. (d) tends to equalize the income distribution. 77) AM22\ D \\Costs of Unemployment\2\\ Two broad categories of costs associated with unemployment are: (a) monetary and intangible costs. (b) physical and potential costs. (c) theoretical and actual costs. (d) lost income and social costs.

Test Bank One

16

78) AM22\ D \\Costs of Unemployment\1\\ Factors that tend to spread the personal costs to unemployed workers across the rest of society do NOT include: (a) unemployment compensation. (b) food stamp programs. (c) job retraining programs. (d) personal savings for a rainy day. 79) AM22\ C \\ Lost-Income Costs of Unemployment\2\\ Unemployment: (a) harms only those who are unemployed. (b) isnt bad because all unemployment is voluntary. (c) causes losses of output to society. (d) rises when inflationary pressure grows. 80) AM22\ B \\ Social Costs of Unemployment \1\\ Social costs of unemployment do NOT include: (a) disruptions to family structures. (b) the value that the workers could have produced. (c) loss of self confidence by workers laid off. (d) increases in disease and suicide rates. 81) AM22\ D \\ Social Costs of Unemployment \1\\ Negative relationships exist between unemployment rates and rates of: (a) illegitimate births. (b) heart attacks and other stress-related illnesses. (c) suicide. (d) both marriages and divorces. (e) property crime. 82) AM22\ B \\ Social Costs of Unemployment \2\\ If, after a protracted recession, there is an upswing in the business cycle, there is likely to be increases the rates of: (a) price deflation. (b) both marriage and divorce. (c) involuntary unemployment. (d) property crime. (e) early retirement.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

17

83) AM22\A\\Social Costs of Unemployment \2\\ The social and psychic costs of unemployment include: (a) declines in the self esteem of unemployed breadwinners. (b) the value of loot from more frequent bank robberies. (c) transaction costs incurred by job seekers. (d) output not produced because of inefficiency. (e) menu and distortion costs. 84) AM22\ C \\ Allocative Benefits of Unemployment\2\\ Unemployment can generate allocative benefits for the job market. These benefits do NOT include the fact that: (a) searching for better jobs is facilitated while people are unemployed. (b) firms can choose from larger pools of unemployed workers. (c) potential lay-offs may curb wage demands. (d) jobs and employees are likely to become better matched. 85) AM22\ A \\ Allocative Benefits of Unemployment\2\\ Matching workers with positions that they are relatively suited to fill is among the: (a) allocative benefits of frictional unemployment. (b) social costs of cyclical unemployment. (c) disciplinary benefits of structural unemployment. (d) social benefits of induced unemployment. (e) frictional benefits of labor force turnover. 86) AM22\ A \\ Allocative Benefits of Unemployment \2\\ Krispy Kreme is looking for a new doughnut chef. Numerous applicants are available for the position, so Krispy Kreme hires a highly qualified chef. This is an example of a/an: (a) allocative benefit of unemployment. (b) social benefit of unemployment. (c) disciplinary benefit of unemployment. (d) convenience benefit of unemployment. 87) AM22\ C \\Disciplinary Benefits of Unemployment \2\\ Workers who become increasingly diligent and productive during recessions because they fear being laid off or fired provide examples of: (a) induced employment. (b) the allocative benefits of unemployment. (c) the disciplinary benefits of unemployment. (d) unfair employment practices.

Test Bank One

18

88) AM22\ C \\ Disciplinary Benefits of Unemployment \2\\ Unemployment can generate disciplinary benefits in the sense that: (a) searching for better jobs is facilitated while people are unemployed. (b) firms can choose from larger pools of unemployed workers. (c) potential layoffs may curb wage demands. (d) allocative benefits apply only to inflation.

Ralph Byrns

Chapter 24: Employment and Unemployment

Test Bank One

19