If the labor-force participation rate is 82% and the total population 16 years of age or older is

1million people, the labor force is

180,000 people
740,000 people
820,000 people (82 x 100M)
910,000 people

People who are unemployed because wages are, for some reason, set above the level that brings
labor supply and demand into equilibrium are best classified as
Fictionally unemployed
Discourage workers
Structurally unemployed
Cyclically unemployed

If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7
percent, then by definition there is
Cyclically unemployment amounting to 0.5 percent of labor force
Structural unemployment amounting to 0.5 percent of labor force
Fictional unemployed amounting to 0.5 percent of the labor force
Search unemployed amounting to 0.5 percent of the labor force

Eva owns business. Eva is

Employed and not in the labor force
Unemployed and not in the labor force
Employed and in the labor force
Unemployed and in the labor force

The theory of efficiency wages explains why

It may be in the best interest of firms to offer wages that are above the equilibrium
level
The most efficient way to pay workers is to pay them according to their skills
It is efficient for firms to set wages at the equilibrium level
Setting wages at the equilibrium level may increase unemployment

Which of the following is not correct?

Unions will cause an increase in wages
When a union is present in a labor market wages are not determined by the equilibrium of
supply and demand
The process by which unions and firms agree on the terms of employment is called a
strike
Like any cartel a union is a group of seller acting together in the hope of exerting
their joint market power

A person who is not employed and claims to be trying hard to find a job but really is not trying hard
to find a job.
Is counted as out of the labor force but should be counted as unemployed
Is counted as unemployed but should be counted as out of the labor force
Is correctly counted as out of the labor force
Is correctly counted as unemployed
To be counted as employed in the U.S labor force statistics a person
Does not have to be working for pay if they are working for a family business but
must be employed fulltime
Does not have to be working for pay if they are working for a family business and
does not have to be working fulltime
Must be working for pay, but does not have to be working fulltime
Must be working for pay and be working fulltime

Rene is the CEO of a corporation that hires nonunion labor. According to the theory of efficiency
wages. If she decides to pay her works more that the competitive equilibrium wage, then
The profits of the firm may increase
The turnover of her workers may increase
She will face a shortage of labor
The higher wages will induce her workers to shirk

According to the theory of efficiency wages if a firm stops paying efficiency wages it is likely to see
A decrease in the number of job applicants and a decrease in how long workers stay on the
job
Increase in the number of job applicants and a decrease in how long workers stay on the job
An increase in the number of job applicants and an increase in how long workers stay on the
job
A decrease in the number of job applicants and an increase in how long workers stay on the
job

Unemployment that results because it takes time for workers to search for the job that suit their
taste and kills
The natural rate of unemployment
fictional unemployment
cyclical unemployment
structural unemployment

cyrus
cts of unionization on wages in the sectors of the economy that are unionize causes the supply of
labor in other sectors of the economy to
decrease, raising wages in industries that are not unionize
Increase, raising wages in industries that are not unionize
Increase, reducing wages in industries that are not unionize
decrease, reducing wages in industries that are not unionize

The introduction of a union into an industry

Lowers wages and raises employment in that industry
Raises wages and employment in that industry
Lowers wages and employment in that industry
Raises wages and lowers employment in that industry

Efficiency wages
Increase productivity but increase unemployment
Decrease productivity but reduce unemployment
Increase productivity but reduce unemployment
Decrease productivity but increase unemployment
Which of the following is explanation for the existence of frictional unemployment?
efficiency wages
Minimum- wage laws
Job search
Unions

Wages in excess of their equilibrium level help explain

The natural rate of unemployment but not structural unemployment
Structural unemployment but not the natural rate of unemployment
Both structural unemployment and the natural rate of unemployment
Neither structural unemployment nor the natural rate of unemployment

When a minimum wage law forces that wage to remain above the level that balances supply and
demand it.
Reduces the quantity of labor supplied and reduces the quantity of labor demanded
compared to the equilibrium level.
Raises the quantity of labor supplied and raises the quantity of labor demanded compared
to the equilibrium level
Raises the quantity of labor supplied and reduces the quantity of labor demanded
compared to the equilibrium level
Reduces the quantity of labor supplied and raises the quantity of labor demanded
compared to the equilibrium level

Minimum wages that create unemployment in markets where they create a

Surplus of labor, unemployment of this type is called structural
Shortage of labor, unemployment of this type is called frictional
Shortage of labor, unemployment of this type is called structural
Surplus of labor, unemployment of this type is called frictional

The efficiency- wage theory of worker turnover suggests that firms with higher turnover will have
Higher production costs and lower profits
Lower production costs and lower profits
Higher production costs and higher profits
Lower production costs and higher profits

A firm may pay efficiency wages in an attempt to

All are correct
Reduce turnover
Attract a well-qualified pool of applicants
Reduce incentives to shirk

The deviation of unemployment from its natural safe is called

Fluctuating unemployment
Cyclical unemployment
Deviant unemployment
The normal rate of unemployment

Suppose that neither textile workers nor shoemakers are unionized. If textile workers unionize, then
the supply of shoemakers will
Rise and their wages will fall
Fall and their wages will fall
 Rise and their wages will rise
Fall and their wages will rise

The union bargains successfully with employers, in that industry

The quantity of labor demanded increases and the quantity of labor supplied decreases
Both the quantity of labor supplied and the quantity of labor demanded increase
Both the quantity of labor supplied and the quantity of labor demanded decrease
The quantity of labor supplied increases and the quantity of labor demanded decreases

If the wage is kept above the equilibrium wage for any reason, the result is
Structural unemployment
Frictional unemployment
Cyclical unemployment
Seasonal unemployment

Which of the following is correct?

unemployment rate= number of unemployed adult population x 100
unemployment rate=number of unemployed/(number of employed +number of
unemployed) x 100
labor force= number of employed
labor force= population –number of unemployed

Mary worked part-time for her mother’s business without pay. Larry was absent from work because
he had a flu. Who is counted as employed by the BLS?
Neither Larry nor mary
Mary but not larry
Larry but not mary
Both mary and larry

Cyrus, has just finished high school and started looking for his first job, but has not yet found one.
Other things the same, the unemployment rate
Is unaffected and the labor- force participation rate increases
And the labor force participation rate are both unaffected
Increases and the labor force participation rate is unaffected
And the labor-force participation rate both increase

An increase in the minimum wage

Increases the quantity of labor demanded but decreases the quantity of labor supplied
Decreases both the quantity demanded and the quantity supplied of labor
Increases both the quantity demanded and the quantity supplied of labor
Decreases the quantity of labor demanded but increases the quantity of labor supplied

The labor-force participation rate measures the percentage of the

Total adult population that is employed
Labor force that is employed
Total adult population that is in the labor force
Labor force that is either employed or unemployed.