Question 1

Juanita earned a B.S. in engineering and went to work for a large defense contractor in a small town in California. When the government cut spending, Juanita and 99 others were laid off. The only other business in the town is growing grapes to be made into raisins, but the growers refuse to hire laid-off engineers, knowing they will leave at the first opportunity. The unemployment Juanita is experiencing is:

Accepted Answer

Juanita's unemployment is due to structural factors, meaning there is a mismatch between her skills and the job openings available in the area. The growers are unwilling to hire engineers due to the assumption that they will leave as soon as another engineering job becomes available. This is not a cyclical, permanent, frictional, or voluntary type of unemployment.

Question 2

Unemployment that results from fundamental technological changes in production, or from the substitution of new goods for customary ones, is:

Accepted Answer

Unemployment that results from fundamental technological changes or from the substitution of new goods for customary ones is known as structural unemployment. This type of unemployment is caused by a mismatch between the skills or location of workers and the requirements or location of available jobs, and is often considered a long-term or permanent phenomenon rather than a cyclical or temporary one.

Question 3

Bob is unemployed because his skills have become obsolete due to technological advances. This is ____ unemployment.

Accepted Answer

Structural unemployment refers to unemployment caused by changes in the structure of the economy, such as technological advances or outsourcing, that make some skills obsolete while creating demand for new ones. In this scenario, Bob is unemployed because his skills are no longer in demand due to technological advances, making it an example of structural unemployment.

Question 4

Sharon was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Sharon experienced:

Accepted Answer

Sharon's unemployment is classified as frictional unemployment, which is the temporary unemployment that occurs when an individual is transitioning between jobs.

Question 5

Consider a broom factory that permanently closes because of foreign competition. If the broom factory's workers cannot find new jobs because their skills are no longer marketable, then they are classified as:

Accepted Answer

Structural unemployment refers to a situation where a worker's skills are no longer in demand because of changes in the economy, such as foreign competition or technological advances. In this scenario, the broom factory workers are no longer marketable due to foreign competition, making them structurally unemployed. Seasonal unemployment occurs when workers are only employed for part of the year, frictional unemployment occurs when workers are between jobs and searching for new employment opportunities, and cyclical unemployment occurs due to fluctuations in the overall economy.

Question 6

Structural unemployment is frequently caused by:

Accepted Answer

Structural unemployment occurs when technological changes or shifts in the economy make certain job skills obsolete, leading to a mismatch between the skills workers possess and the skills needed by employers.

Question 7

An example of structural unemployment is a(n):

Accepted Answer

Structural unemployment occurs when workers' skills do not match the jobs available, often due to technological advancements or changes in the industry, as in the case of the engineer.

Question 8

Unemployment that is caused by a mismatch of the demand for workers with certain skills and the skills of unemployed workers is:

Accepted Answer

Structural unemployment occurs when the skills of unemployed workers do not match the skills required for available job opportunities. This results in a mismatch between the demand for workers and the skills of available workers, leading to unemployment. This is different from frictional unemployment, which occurs when workers are in between jobs or searching for better opportunities, and cyclical unemployment, which occurs as a result of fluctuations in the business cycle. Mismatch unemployment is not a recognized term in economics.

Question 9

A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in:

Accepted Answer

Structural unemployment is caused by a mismatch between the skills of unemployed workers and the skills needed by employers with job openings. This type of unemployment is long-term and can be difficult to address because it involves significant changes in industries and job markets.

Question 10

When people become unemployed because of a higher minimum wage, this type of unemployment is called:

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills and qualifications of workers and the requirements of the available jobs. If the minimum wage is increased significantly, employers may no longer be able to afford to hire as many low-skilled workers, leading to structural unemployment.

Question 11

Which of the following offers an example of structural unemployment?

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills of available workers and the skill requirements of available jobs. In this case, the development of automobiles led to a decline in the demand for horse-and-buggy transportation, resulting in a long-term shift away from jobs in that industry. The workers in that industry may not have the necessary skills to transition to jobs in the automobile industry, leading to unemployment that persists even beyond short-term economic fluctuations.

Question 12

Structural unemployment is unemployment caused by:

Accepted Answer

Structural unemployment refers to a mismatch between the skills that workers in the economy can offer and the skills demanded of workers by employers. This can occur due to changes in technology or changes in the structure of the economy, leaving workers without the necessary skills to fill available jobs.

Question 13

Sam is a musician who is out of work because electronic equipment replaced live musicians. This is an example of:

Accepted Answer

Sam's unemployment is due to the shift in the structure of the music industry, in which electronic equipment has replaced live musicians. This is an example of structural unemployment.

Question 14

Unemployment that occurs from fundamental technological changes in the production, or from the substitution of new goods for customary ones, is known as:

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills and qualifications of workers and the requirements of available jobs, caused by fundamental technological changes or the substitution of new goods for old ones.

Question 15

A mismatch of the skills of unemployed workers and the skills required for existing jobs is defined as:

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills of unemployed workers and the skills required for existing jobs. This type of unemployment is often long-term and may require retraining or education for affected workers to find employment in a different sector.

Question 16

Louise is unemployed due to a decrease in the demand for workers with a knowledge of a certain word processing language. This is an example of:

Accepted Answer

Structural unemployment occurs due to a mismatch between the skills and qualifications of workers and the requirements of available jobs in the economy. The decrease in demand for workers with a particular skill set has resulted in Louise's unemployment, which is a classic example of structural unemployment.

Question 17

Althea, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top 10 universities in her field. The type of unemployment she is experiencing is:

Accepted Answer

Althea's unemployment is not due to a lack of available jobs or a mismatch of skills, but rather her strategic decision to hold out for a specific type of job. This fits the definition of frictional unemployment, which occurs when people are between jobs or searching for new ones.

Question 18

Unemployment caused by people voluntarily quitting work in order to seek more attractive employment is called:

Accepted Answer

Frictional unemployment occurs when workers voluntarily quit their jobs in search of better opportunities or when they are transitioning from one job to another. This type of unemployment is temporary and is considered a normal part of the labor market.

Question 19

When individuals are unemployed because they lack the qualifications to fill available jobs, this is called:

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills and qualifications of workers and the requirements of available jobs. This can lead to unemployment for certain individuals who may not have the necessary education or training to qualify for certain jobs in their field.

Question 20

Workers who may be between jobs are considered:

Accepted Answer

Frictional unemployment refers to the temporary unemployment that occurs during the transition period when workers are between jobs. These workers are actively searching for new jobs and may take some time to find suitable employment.

Quiz 6: Business Cycles and Unemployment