Question 1

Which of the following individuals would be considered unemployed?

Accepted Answer

A)  an individual who works only part-time
B)  an individual who works full-time in a family business,but is not paid
C)  an individual who is not working and is not looking for work
D)  all of the above
E)  none of the aboveF) A) and B)
G) B) and E)

Question 2

Suppose we wish to examine the determinants of the equilibrium real wage and equilibrium level of employment (N) .In a graph with the real wage on the vertical axis,and the level of employment on the horizontal axis,the price-setting relation will now be

Accepted Answer

A)  a vertical line.
B)  a horizontal line.
C)  an upward sloping line.
D)  a downward sloping line.
E)  kinked at the natural rate of unemployment.F) B) and C)
G) A) and B)

Question 3

Based on price setting behavior,we know that an increase in the unemployment rate will cause

Accepted Answer

A)  no change in the real wage.
B)  a reduction in the real wage.
C)  an increase in the real wage.
D)  an upward shift of the PS curve.E) B) and C)
F) A) and C)

Question 4

The participation rate in the U.S.has increased steadily over time.First,explain what the participation rate represents.Second,explain why the participation rate has increased.

Accepted Answer

The participation rate is the ratio of t...

Question 5

Graphically illustrate (using the WS and PS relations)and explain the effects of a reduction in the minimum wage on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Accepted Answer

A reduction in the minimum wage will cau...

Question 6

The natural level of employment (N) will increase when which of the following occurs?

Accepted Answer

A)  an increase in the markup of prices over costs
B)  a reduction in unemployment benefits
C)  an increase in the actual unemployment rate
D)  all of the above
E)  none of the aboveF) C) and D)
G) None of the above

Question 7

When the unemployment rate is low,we would expect that

Accepted Answer

A)  the probability of losing a job is high.
B)  the probability of losing a job is low.
C)  the probability an unemployed individual will find another job is low.
D)  the separation rate will increase.E) C) and D)
F) All of the above

Question 8

Graphically illustrate (using the WS and PS relations)and explain the effects of a reduction in the markup on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Accepted Answer

A reduction in the markup will cause fir...

Question 9

A reduction in the minimum wage will tend to cause which of the following?

Accepted Answer

A)  an upward shift in the WS curve
B)  a downward shift in the WS curve
C)  an upward shift in the PS curve
D)  a downward shift in the PS curve
E)  none of the aboveF) C) and D)
G) A) and D)

Question 10

Data on labor-force flows show that

Accepted Answer

A)  in any given month,almost none of the unemployed gets jobs.
B)  in any given month,almost all of the unemployed gets jobs.
C)  the average duration of unemployment is about 2 weeks.
D)  the average duration of unemployment is about 2 years.
E)  in any given month,about one-fourth of the unemployed get jobs.F) D) and E)
G) B) and D)

Question 11

Suppose that increased international trade makes product markets more competitive in the U.S.Given this information,we would expect to observe which of the following?

Accepted Answer

A)  an upward shift in the WS curve
B)  a downward shift in the WS curve
C)  an upward shift in the PS curve
D)  a downward shift in the PS curve
E)  none of the aboveF) C) and E)
G) B) and C)

Question 12

Based on price setting behavior,we know that a reduction in the unemployment rate will cause

Accepted Answer

A)  no change in the real wage.
B)  a reduction in the real wage.
C)  an increase in the real wage.
D)  an upward shift of the PS curve.E) C) and D)
F) A) and C)

Question 13

The natural level of output is the level of output that occurs when

Accepted Answer

A)  the goods market and financial markets are in equilibrium.
B)  the economy is operating at the unemployment rate consistent with both the wage-setting and price-setting equations.
C)  the markup (m) is zero.
D)  the unemployment rate is zero.
E)  there are no discouraged workers in the economy.F) C) and E)
G) C) and D)

Question 14

The two labor markets in the "dual labor market" are

Accepted Answer

A)  southern versus northern.
B)  western versus eastern.
C)  English speaking versus non-English speaking.
D)  domestic versus foreign.
E)  none of the aboveF) All of the above
G) None of the above

Question 15

In the United States,how many workers become unemployed,on average,every day?

Accepted Answer

A)  5,000
B)  10,000
C)  50,000
D)  100,000E) A) and B)
F) All of the above

Question 16

Suppose the actual unemployment rate increases.This will cause

Accepted Answer

A)  an upward shift in the WS curve.
B)  a downward shift in the WS curve.
C)  an upward shift in the PS curve.
D)  a movement along the WS and the PS curves.
E)  none of the aboveF) A) and E)
G) A) and B)

Question 17

In the wage-setting relation,the nominal wage tends to decrease when

Accepted Answer

A)  the price level increases.
B)  the unemployment rate decreases.
C)  unemployment benefits decrease.
D)  the minimum wage increases.
E)  all of the aboveF) A) and B)
G) A) and C)

Question 18

Henry Ford's experiment with efficiency wages resulted in

Accepted Answer

A)  a dramatic drop in productivity.
B)  a dramatic increase in the turnover rate.
C)  a reduction in the layoff rate.
D)  new problems with the work force,like drunkenness and reckless driving.
E)  no noticeable effects.F) A) and E)
G) A) and B)

Question 19

With the real wage on the vertical axis and the unemployment rate on the horizontal axis,we know that

Accepted Answer

A)  the WS curve is upward sloping.
B)  the WS curve is downward sloping.
C)  the PS curve is upward sloping.
D)  the PS curve is downward sloping.E) B) and C)
F) A) and C)

Question 20

Based on wage setting behavior,we know that a reduction in the unemployment rate will cause

Accepted Answer

A)  no change in the real wage.
B)  a reduction in the real wage.
C)  an increase in the real wage.
D)  an upward shift of the WS curve.E) A) and B)
F) B) and D)

Exam 6: The Labor Market

The natural level of employment (N) will increase when which of the following occurs?

Correct AnswerverifiedShow Answer

Graphically illustrate (using the WS and PS relations)and explain the effects of a reduction in the markup on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Correct AnswerverifiedA reduction in the markup will cause fir...View AnswerShow Answer

Suppose that increased international trade makes product markets more competitive in the U.S.Given this information,we would expect to observe which of the following?

Correct AnswerverifiedShow Answer

Henry Ford's experiment with efficiency wages resulted in

Correct AnswerverifiedShow Answer

The two labor markets in the "dual labor market" are

Correct AnswerverifiedShow Answer

A reduction in the minimum wage will tend to cause which of the following?

Correct AnswerverifiedShow Answer

The natural level of output is the level of output that occurs when

Correct AnswerverifiedShow Answer

Graphically illustrate (using the WS and PS relations)and explain the effects of a reduction in the minimum wage on the equilibrium real wage,the natural rate of unemployment,the natural level of employment,and the natural level of output.

Correct AnswerverifiedA reduction in the minimum wage will cau...View AnswerShow Answer

Based on price setting behavior,we know that a reduction in the unemployment rate will cause

Correct AnswerverifiedShow Answer

When the unemployment rate is low,we would expect that

Correct AnswerverifiedShow Answer

Based on wage setting behavior,we know that a reduction in the unemployment rate will cause

Correct AnswerverifiedShow Answer

With the real wage on the vertical axis and the unemployment rate on the horizontal axis,we know that

Correct AnswerverifiedShow Answer

Data on labor-force flows show that

Correct AnswerverifiedShow Answer

Based on price setting behavior,we know that an increase in the unemployment rate will cause

Correct AnswerverifiedShow Answer

Suppose we wish to examine the determinants of the equilibrium real wage and equilibrium level of employment (N) .In a graph with the real wage on the vertical axis,and the level of employment on the horizontal axis,the price-setting relation will now be

Correct AnswerverifiedShow Answer

The participation rate in the U.S.has increased steadily over time.First,explain what the participation rate represents.Second,explain why the participation rate has increased.

Correct AnswerverifiedThe participation rate is the ratio of t...View AnswerShow Answer

Which of the following individuals would be considered unemployed?

Correct AnswerverifiedShow Answer

In the wage-setting relation,the nominal wage tends to decrease when

Correct AnswerverifiedShow Answer

In the United States,how many workers become unemployed,on average,every day?

Correct AnswerverifiedShow Answer

Suppose the actual unemployment rate increases.This will cause

Correct AnswerverifiedShow Answer

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A reduction in the markup will cause fir...
View Answer

Correct Answer
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Correct Answer
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A reduction in the minimum wage will cau...
View 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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Correct Answer
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The participation rate is the ratio of t...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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