Question 1

A reservation wage is the

Accepted Answer

A)  maximum wage the firm is willing to pay.
B)  tip necessary to get a waiter to reserve a table.
C)  minimum wage the worker is willing to accept.
D)  competitive equilibrium wage.E) None of the above
F) A) and D)

Question 2

Which of the following types of unemployment will exist even if the wage is at the competitive equilibrium?

Accepted Answer

A)  Unemployment due to unions.
B)  Unemployment due to efficiency wages.
C)  Frictional unemployment.
D)  Unemployment due to minimum wage laws.E) A) and B)
F) A) and D)

Question 3

Some frictional unemployment is inevitable because

Accepted Answer

A)  of minimum wage laws.
B)  there are changes in the demand for labour among different firms.
C)  of unions.
D)  All of these answers.
E)  efficiency wages may hold the wage above the equilibrium wage.F) A) and E)
G) C) and D)

Question 4

Which one of the following types of unemployment results from the wage being held above the competitive equilibrium wage?

Accepted Answer

A)  Structural unemployment.
B)  Cyclical unemployment.
C)  Frictional unemployment.
D)  None of these answers.E) A) and B)
F) A) and C) A

Question 5

Table 2.The figures in the table below are taken from the statistics office in a fictional country called Exland.
  Number of workers employed8,400Frictional unemployment250Structural unemployment350Cyclical unemployment600Discouraged workers400Adult population12,000\begin{array}{llcc} 	ext {Number of workers employed} &8,400\ 	ext {Frictional unemployment} &250\ 	ext {Structural unemployment} &350\ 	ext {Cyclical unemployment} &600\ 	ext {Discouraged workers} &400\ 	ext {Adult population} &12,000\\end{array}Number of workers employedFrictional unemploymentStructural unemploymentCyclical unemploymentDiscouraged workersAdult population​8,40025035060040012,000​

-Refer to Table 2.What is the unemployment rate in Exland?

Accepted Answer

A)  12.5 per cent.
B)  15 per cent.
C)  16 per cent.
D)  24 per cent. E) A) and B)
F) A) and C)

Question 6

Why have labour force participation rates for women in Europe increased while labour force participation rates for men have decreased?

Accepted Answer

Causes of the increase in the women's labour force participation rate over the past several decades include new technologies that have reduced the amount of time required to complete routine household tasks, improved birth control, and changing political and social attitudes.Causes of the decline in the men's labour force participation rate over the past several decades include young men now staying in school longer than their fathers and grandfathers did, older men now retiring earlier and living longer, and more fathers now staying at home to raise their children.

Question 7

Table 1: Statistics from a fictional country
   Nurnbers in millions  Total population 195.4 Adult population 139.7 Number of urnerriployed 5.7 Number of employed 92.3\begin{array} { | l | c | } \hline & 	ext { Nurnbers in millions } \\hline 	ext { Total population } & 195.4 \\hline 	ext { Adult population } & 139.7 \\hline 	ext { Number of urnerriployed } & 5.7 \\hline 	ext { Number of employed } & 92.3 \\hline\end{array} Total population  Adult population  Number of urnerriployed  Number of employed ​ Nurnbers in millions 195.4139.75.792.3​​ 
-Refer to Table 1.The unemployment rate is

Accepted Answer

A)  3.2 per cent.
B)  5.7 per cent.
C)  5.8 per cent.
D)  6.2 per cent.
E)  Not enough information is available to answer. F) A) and C)
G) D) and E)

Question 8

To negotiate a higher wage rate, a union cannot

Accepted Answer

A)  start with a strike and then work to reach a contract to end the strike.
B)  negotiate in good faith and expect to hold its bargaining power.
C)  expect to maintain the same level of employment.
D)  offer a supply curve of labour that is horizontal.E) None of the above
F) B) and D)

Question 9

A union is a labour cartel.

Accepted Answer

A) True 
 B)False

Question 10

Why does unemployment impose a cost to the economy and society as a whole?

Accepted Answer

Unemployment clearly affects individuals...

Question 11

Which of the following causes of unemployment is associated with a wage rate above the market equilibrium level?

Accepted Answer

A)  Minimum wage laws.
B)  Unions.
C)  Efficiency wages.
D)  All of the above are correct.E) A) and B)
F) B) and C)

Question 12

Consider two labour markets in which jobs are equally attractive in all respects other than the wage rate.All workers are equally able to do either job.Initially, both labour markets are perfectly competitive.If a union organizes workers in one of the markets, then the wage rates will tend to

Accepted Answer

A)  rise in both markets.
B)  fall in both markets.
C)  rise for the union jobs, but remain unchanged for the non-union jobs.
D)  rise for the union jobs and fall for the non-union jobs.E) B) and C)
F) B) and D)

Question 13

Most spells of unemployment are short, and most unemployment observed at any given time is long term.How can this be?

Accepted Answer

Most unemployed people in the economy ar...

Question 14

If the number of people in work rises we can be certain that the unemployment rate falls.

Accepted Answer

A) True 
 B)False  False

Question 15

Which of the following statements about efficiency wage theory is true?

Accepted Answer

A)  Paying above the competitive equilibrium wage tends to cause workers to shirk their responsibilities.
B)  Firms do not have a choice about whether they pay efficiency wages or not because law does determine these wages.
C)  Paying the lowest possible wage is always the most efficient (profitable) .
D)  Paying above the competitive equilibrium wage may improve worker health, lower worker turnover, improve worker quality, and increase worker effort.E) A) and B)
F) A) and C)

Question 16

Unions might increase efficiency in the case where they

Accepted Answer

A)  raise the wage for insiders above the competitive equilibrium.
B)  lower the wage of local outsiders.
C)  offset the market power of a large firm that is the dominant employer in a region.
D)  threaten a strike but don't actually follow through so there are no lost hours of work.E) A) and B)
F) C) and D)

Question 17

Efficiency wages are

Accepted Answer

A)  lower than market wages paid by employers to increase profitability.
B)  higher than market wages paid by employers to increase productivity.
C)  government determined minimum wages set to protect workers from unfair employers.
D)  negotiated by unions when officials are interested in trimming work forces.E) A) and B)
F) A) and C)

Question 18

Unemployment insurance

Accepted Answer

A)  tends to increase unemployment by decreasing the cost of being unemployed.
B)  tends to decrease unemployment by providing limited resources to the unemployed.
C)  increases the hardships associated with unemployment.
D)  increases the amount of job security demanded by employees.E) C) and D)
F) All of the above

Question 19

Which of the following is not a reason economies experience structural unemployment?

Accepted Answer

A)  Job search.
B)  Unions.
C)  Minimum wage laws.
D)  Efficiency wages.E) C) and D)
F) B) and D)

Question 20

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

Accepted Answer

According to the theory of efficiency wa...

Exam 6: Unemployment

A reservation wage is the

Correct Answer
verified

Which of the following types of unemployment will exist even if the wage is at the competitive equilibrium?

Correct Answer
verified

Some frictional unemployment is inevitable because

Correct Answer
verified

Which one of the following types of unemployment results from the wage being held above the competitive equilibrium wage?

Correct Answer
verified
A

Correct Answer
verified

Why have labour force participation rates for women in Europe increased while labour force participation rates for men have decreased?

Correct Answer
verified

To negotiate a higher wage rate, a union cannot

Correct Answer
verified

A union is a labour cartel.

Correct Answer
verified

Why does unemployment impose a cost to the economy and society as a whole?

Correct Answer
verified
Unemployment clearly affects individuals...
View Answer

Which of the following causes of unemployment is associated with a wage rate above the market equilibrium level?

Correct Answer
verified

Consider two labour markets in which jobs are equally attractive in all respects other than the wage rate.All workers are equally able to do either job.Initially, both labour markets are perfectly competitive.If a union organizes workers in one of the markets, then the wage rates will tend to

Correct Answer
verified

Most spells of unemployment are short, and most unemployment observed at any given time is long term.How can this be?

Correct Answer
verified
Most unemployed people in the economy ar...
View Answer

If the number of people in work rises we can be certain that the unemployment rate falls.

Correct Answer
verified
False

Which of the following statements about efficiency wage theory is true?

Correct Answer
verified

Unions might increase efficiency in the case where they

Correct Answer
verified

Efficiency wages are

Correct Answer
verified

Unemployment insurance

Correct Answer
verified

Which of the following is not a reason economies experience structural unemployment?

Correct Answer
verified

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

Correct Answer
verified
According to the theory of efficiency wa...
View Answer

Exam 6: Unemployment

A reservation wage is the

Correct AnswerverifiedShow Answer

Which of the following types of unemployment will exist even if the wage is at the competitive equilibrium?

Correct AnswerverifiedShow Answer

Some frictional unemployment is inevitable because

Correct AnswerverifiedShow Answer

Which one of the following types of unemployment results from the wage being held above the competitive equilibrium wage?

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

Why have labour force participation rates for women in Europe increased while labour force participation rates for men have decreased?

Correct AnswerverifiedShow Answer

To negotiate a higher wage rate, a union cannot

Correct AnswerverifiedShow Answer

A union is a labour cartel.

Correct AnswerverifiedShow Answer

Why does unemployment impose a cost to the economy and society as a whole?

Correct AnswerverifiedUnemployment clearly affects individuals...View AnswerShow Answer

Which of the following causes of unemployment is associated with a wage rate above the market equilibrium level?

Correct AnswerverifiedShow Answer

Consider two labour markets in which jobs are equally attractive in all respects other than the wage rate.All workers are equally able to do either job.Initially, both labour markets are perfectly competitive.If a union organizes workers in one of the markets, then the wage rates will tend to

Correct AnswerverifiedShow Answer

Most spells of unemployment are short, and most unemployment observed at any given time is long term.How can this be?

Correct AnswerverifiedMost unemployed people in the economy ar...View AnswerShow Answer

If the number of people in work rises we can be certain that the unemployment rate falls.

Correct AnswerverifiedFalse

Which of the following statements about efficiency wage theory is true?

Correct AnswerverifiedShow Answer

Unions might increase efficiency in the case where they

Correct AnswerverifiedShow Answer

Efficiency wages are

Correct AnswerverifiedShow Answer

Unemployment insurance

Correct AnswerverifiedShow Answer

Which of the following is not a reason economies experience structural unemployment?

Correct AnswerverifiedShow Answer

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

Correct AnswerverifiedAccording to the theory of efficiency wa...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Unemployment clearly affects individuals...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Most unemployed people in the economy ar...
View Answer

Correct Answer
verified
False

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
According to the theory of efficiency wa...
View Answer