Chapter 28

Who of the following is not included in the Bureau of Labor Statistics' "employed" category?

• Those who worked in their own business

  
  

• Those who worked as unpaid workers in a family member's business

• Those waiting to be recalled to a job from which they had been laid off

• Those who were temporarily absent from work because of vacation

Noah is a full time college student, who is not working or looking for a job. The Bureau of Labor Statistics counts Noah as

• Employed

• Unemployed

• Not in the Labor Force

• Marginally Attached Worker

What is the definition for unemployment?

• The market value of all final goods and services produced in a nation during a period of time, usually a year.

• The increase of general prices over time.

• When people do not have jobs and are actively looking for one.

Which of the following best illustrates adverse selection?

• A person adds risky stock to their portfolio.

• A person knows that they have lost a lot of jewelry in the past buys special insurance when she buys a new set of expensive earrings

• A person is unwilling to buy a stock when she believes its price has an equal chance of rising or falling $10.

• A person gets homeowners insurance and then checks their smoke detector batteries less frequently.

What is the percentage of the labor force that are unemployed?

• unemployment rate

• labor force participation rate

• employment rate

• discouraged worker rate

What is the formula for the unemployment rate?

• Number of unemployed ÷ Labor Force

• Labor Force ÷ Adult Population

• Number of employed × Labor Force

• Number of unemployed ÷ Adult Population

If you want to know how much $200 would be worth in 10 years with an interest rate of 8%, what equation would you use?

• 200(1 + 0.08)¹⁰

• 200 ÷ (1 + 0.08)¹⁰

• 1(200 + 0.08)¹⁰

• 1 ÷ (200 + 0.08)¹⁰

Frictional unemployment is

• not inevitable; rather, it can be reduced to zero by well-designed public policies.

• not inevitable; rather, it could be reduced to zero if by the elimination of unemployment insurance.

• inevitable, because at any given time, jobs are being created in some firms and destroyed in other firms.

• inevitable, because in some industries, wages are always set above the level that brings supply and demand into equilibrium.

Collective bargaining refers to

• the process by which the government sets exemptions from the minimum wage law.

• setting the same wage for all employees to prevent conflict among workers.

• firms colluding to set the wages of employees below equilibrium.

• the process by which unions and firms agree on the terms of employment.

Which of the following is an example of an efficiency wage?

• A higher wage paid to a more experienced worker

• A below-equilibrium wage paid by a small business exempt from minimum-wage laws

• An above-equilibrium wage paid by a firm to reduce turnover costs

• A wage tied to participation in a government-sponsored job training program