Question 1

Which of the following is not a commonly-cited explanation for the dramatically increasing labor-force participation rates for women from 1950 to the present?

Accepted Answer

While the other options are commonly cited explanations for the increasing labor-force participation rates for women, supporting parents is not typically cited as a primary reason for the trend.

Question 2

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

Accepted Answer

The answer of Most spells of unemployment are short,and most...

Question 3

The table below uses data for the year 2003 provided by the Bureau of Labor Statistics and adjusted to be comparable to U.S.data.All values are in thousands.Fill in the blank entries in the table.

Accepted Answer

The answer of The table below uses data for the...

Question 4

Which of the following raises a country's standard of living?

Accepted Answer

(i) Increasing productivity and efficiency leads to higher output levels and therefore higher incomes for workers, which in turn raises the standard of living. 
(ii) Investment in physical capital such as infrastructure and technology can lead to increases in productivity and efficiency. 
(iii) Investment in education and human capital can lead to improvements in skills and knowledge, which can also increase productivity and efficiency, and ultimately raise the standard of living.

Question 5

Why might a favorable change in the economy,such as technological improvement or a decrease in the price of imported oil,be associated with an increase in frictional unemployment?

Accepted Answer

The answer of Why might a favorable change in the...

Question 6

Refer to Scenario 28-1.What is the labor-force participation rate?

Accepted Answer

The answer of Refer to Scenario 28-1.What is the labor-force...

Question 7

A firm might offer efficiency wages in order to reduce shirking.

Accepted Answer

Efficiency wages are higher than market wages and are offered by firms to motivate workers to be more productive and avoid shirking. If workers know they can earn higher wages by being productive, they may be less likely to shirk on the job.

Question 8

Teenage unemployment is higher than unemployment of people ages 20 and over.Explain why economists would attribute at least part of this difference to minimum-wage laws.

Accepted Answer

The answer of Teenage unemployment is higher than unemployment of...

Question 9

Since unemployment rates are consistently higher in Canada and some Western European countries than in the United States,it appears that the natural rate of unemployment is lower in the United States.What might explain this difference?

Accepted Answer

The answer of Since unemployment rates are consistently higher in...

Question 10

Why have labor-force participation rates for women in the United States increased since World War II while labor-force participation rates for men have decreased?

Accepted Answer

The answer of Why have labor-force participation rates for women...

Question 11

Following the recession of 2001,there was a month in which employment and the unemployment rate both rose.Assuming the computations were correct,how is it possible for both to have increased?

Accepted Answer

The answer of Following the recession of 2001,there was a...

Question 12

Suppose that a well-respected study published in Child Psychology Today finds that a very high proportion of children raised by stay-at-home fathers are accepted to Harvard University.If a large number of previously working fathers quit their jobs and become stay-at-home dads,which of the following will occur,all else equal?

Accepted Answer

(i) is not necessarily true because the study only found a correlation between being raised by stay-at-home fathers and being accepted to Harvard — it did not establish causation. Thus, it is possible that other factors, such as the income or education level of the father, or the child's own abilities and motivation, contributed to the child's acceptance to Harvard.

(iii) is not necessarily true because the study does not establish that all children raised by stay-at-home fathers will be accepted to Harvard, only that a very high proportion of them are accepted. There will still be individual variation and factors other than parenting that contribute to a child's academic success.

(ii) is likely to occur because if a large number of fathers quit their jobs to become stay-at-home dads, there may be a significant loss of income for those families, which could have negative effects on their financial stability and well-being.

(iv) is also likely to occur because if a large number of fathers transition to being stay-at-home dads, there may be a shift in societal norms and expectations around gender roles and caregiving responsibilities. This could have implications for workplace policies, gender equity, and social attitudes toward parenting and work.

Question 13

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

Accepted Answer

The answer of What is the theory of efficiency wages?...

Question 14

All else equal,which of the following would increase the unemployment rate?

Accepted Answer

(i) A decrease in the birth rate would decrease the labor force participation rate, but it wouldn't necessarily increase the unemployment rate.
(ii) An increase in the minimum wage would increase the cost of labor for firms, causing them to hire fewer workers and lay off others, which would increase the unemployment rate.
(iii) A recession would cause firms to produce fewer goods and services, resulting in a decline in the demand for labor, which would increase the unemployment rate.
(iv) An increase in the number of young people staying in school would decrease the labor force participation rate, but it wouldn't necessarily increase the unemployment rate.

Question 15

Refer to Scenario 28-1.What is the total labor force?

Accepted Answer

The total labor force includes both the employed and the unemployed. In this scenario, 10 million people are unemployed and 18 million people are employed. Therefore, the total labor force is 28 million (10 million unemployed + 18 million employed). Option B is the closest number to this.

Question 16

Which of the following is not a commonly-cited explanation for the decreasing labor-force participation rates for men from 1950 to the present?

Accepted Answer

The answer of Which of the following is not a...

Question 17

Refer to Scenario 28-1.What is the unemployment rate?

Accepted Answer

The answer of Refer to Scenario 28-1.What is the unemployment...

Question 18

Refer to Scenario 28-1.How many people are unemployed?

Accepted Answer

According to the scenario, there are 3 million people who are unemployed.

Question 19

In 1914,Henry Ford began paying his workers $5 per day,about twice the going wage.As a result,turnover and absenteeism fell and productivity and profits rose.

Accepted Answer

This statement is true. Henry Ford did start paying his workers $5 per day, which was about twice the going wage at the time, and it did lead to a decrease in turnover and absenteeism, as well as an increase in productivity and profits.

Question 20

Suppose that there is an excess supply of economics professors.Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Accepted Answer

The answer of Suppose that there is an excess supply...

Quiz 28: Unemployment