Chap 15- Quiz 1

The population of Ectenia is 100 people: 40 work

full-time, 20 work half-time but would prefer to work

full-time, 10 are looking for a job, 10 would like to

work but are so discouraged that they have given up

looking, 10 are not interested in working because

they are full-time students, and 10 are retired. What

is the number of unemployed? What is the size of the labor force?

• 10; 70

• 20; 60

• 30; 50

• 40; 80

The main policy goal of unemployment insurance is

to reduce the

• search effort of the unemployed.

• income uncertainty that workers face.

• role of unions in wage setting.

• amount of frictional unemployment.

One unintended consequence of unemployment

insurance is that it reduces the

• search effort of the unemployed.

• income uncertainty that workers face.

• role of unions in wage setting.

• amount of frictional unemployment.

In a competitive labor market, an increase in the

minimum wage results in a(n) _________ in the

quantity of labor supplied and a(n) _________ in the

quantity of labor demanded.

• increase; increase

• increase; decrease

• decrease; increase

• decrease; decrease

In the United States, unionized workers are

paid about _________ percent more than similar

nonunion workers.

• 2

• 5

• 15

• 40

According to the theory of efficiency wages,

• firms may find it profitable to pay above-

  equilibrium wages.

• an excess supply of labor puts downward pressure

  on wages.

• sectoral shifts are the main source of frictional

  unemployment.

• right-to-work laws reduce the bargaining power of

  unions.

When a firm pays an efficiency wage, it may

• have trouble attracting enough workers.

• have to monitor its workers more closely.

• experience declines in worker quality.

• find that its workers quit less frequently.