Question 1

How is unemployment depicted on a production possibilities frontier graph?

Accepted Answer

Production is at a point inside the curve, between the curve and the graph's origin, because this indicates that not all resources (including labor) are being fully utilized, which is a characteristic of unemployment.

Question 2

Which of the following is NOT a reason for considering unemployment a problem?

Accepted Answer

Unemployment does not prevent people from going to school. In fact, during periods of high unemployment, individuals may be more likely to seek education or training to improve their employment prospects. The other options (A, B, C) are valid reasons why unemployment is considered a problem, such as reduced national production, financial hardship for households, and the risk of skills becoming obsolete.

Question 3

The labor force consists of:

Accepted Answer

The labor force includes all persons age 16 or older who are classified as either employed (working for pay) or unemployed (not working but seeking work). Choices A, B, and D do not accurately define the labor force because they either include individuals not actively seeking work or set incorrect age or desire criteria.

Question 4

Jonia's population of 500,000 includes 95,000 children below age 16, 80,000 retirees, 20,000 discouraged workers, 228,000 employed persons, and 12,000 unemployed persons. What is the unemployment rate of Jonia?

Accepted Answer

The unemployment rate is calculated as the number of unemployed persons divided by the labor force (employed + unemployed), then multiplied by 100. The labor force is 228,000 (employed) + 12,000 (unemployed) = 240,000. The unemployment rate is (12,000 / 240,000) * 100 = 5.0%.

Question 5

Jonia's population of 500,000 includes 95,000 children below age 16, 80,000 retirees, 20,000 discouraged workers, 228,000 employed persons, and 12,000 unemployed persons. What is the labor force participation rate of Jonia?

Accepted Answer

The labor force participation rate is the percentage of the population that is either employed or unemployed. In this case, the labor force is 228,000 + 12,000 = 240,000. The population is 500,000. So the labor force participation rate is 240,000 / 500,000 * 100 = 48%.

Question 6

Econland's population of 260,000 includes 60,000 children below age 16, 40,000 retirees, 5,000 discouraged workers, 30,000 full-time homemakers, 110,000 employed persons, and 10,000 unemployed persons. What is the unemployment rate of Econland? Round to the nearest whole percentage.

Accepted Answer

The answer of Econland's population of 260,000 includes 60,000 children...

Question 7

Econland's population of 260,000 includes 60,000 children below age 16, 40,000 retirees, 5,000 discouraged workers, 30,000 full-time homemakers, 110,000 employed persons, and 10,000 unemployed persons. What is the labor force participation rate of Econland? Round to the nearest whole percentage.

Accepted Answer

The answer of Econland's population of 260,000 includes 60,000 children...

Question 8

Which one of the following people would NOT be counted as part of the labor force?

Accepted Answer

The labor force includes those who are employed and those who are actively seeking employment. A retiree, who is no longer working or actively seeking work, would not be counted as part of the labor force.

Question 9

In order to be classified as unemployed, a person must meet all the criteria below EXCEPT:

Accepted Answer

To be classified as unemployed, a person must be not working but actively seeking employment and available to work. Having the skills for job openings is not a criterion for being classified as unemployed; rather, the key factors are not working, seeking work, and being available for work.

Question 10

Econia has a population of 1 million. There are 350,000 persons under age 16 and 550,000 persons age 21 or older. There are 400,000 employed persons, 30,000 unemployed persons, 60,000 retired persons, and 30,000 full-time homemakers. What is the U3 unemployment rate in Econia? Round to one decimal place.

Accepted Answer

The U3 unemployment rate is calculated as the number of unemployed persons divided by the labor force, then multiplied by 100 to get a percentage. The labor force includes those who are employed and those who are unemployed but looking for work. In Econia, the labor force is 400,000 (employed) + 30,000 (unemployed) = 430,000. The number of unemployed persons is 30,000. Therefore, the U3 unemployment rate is (30,000 / 430,000) * 100 = 7.0%.

Question 11

Econia has a population of 1 million. Of the total population, 350,000 persons are under age 16. There are 400,000 employed persons and 30,000 unemployed persons. What is the labor force participation rate in Econia? Round the answer to one decimal place.

Accepted Answer

The labor force participation rate is calculated as the labor force divided by the working-age population (those aged 16 and above) times 100. In Econia, the labor force is the sum of employed and unemployed persons, which is 400,000 + 30,000 = 430,000. The working-age population is the total population minus those under age 16, which is 1,000,000 - 350,000 = 650,000. Therefore, the labor force participation rate is (430,000 / 650,000) * 100 = 66.2%.

Question 12

What has happened to the U.S. labor force participation rate since the Great Recession of 2007 to 2009?

Accepted Answer

The U.S. labor force participation rate has declined since the Great Recession of 2007 to 2009, primarily due to demographic changes such as the aging of the baby boomer generation, along with other economic factors.

Question 13

A country has a population of 11 million. There are 3 million persons under age 16 and 7 million persons age 21 or older. There are 6 million employed persons, 1 million unemployed persons, 500,000 retired persons, and 500,000 full-time homemakers. What is the U3 unemployment rate? Round to one decimal place.

Accepted Answer

The answer of A country has a population of 11...

Question 14

A country has a population of 11 million. There are 3 million persons under age 16 and 7 million persons age 21 or older. There are 6 million employed persons, 1 million unemployed persons, 500,000 retired persons, and 500,000 full-time homemakers. What is the labor force participation rate? Round to one decimal place.

Accepted Answer

The labor force participation rate is calculated as the labor force divided by the working-age population, then multiplied by 100 to get a percentage. The labor force includes both employed and unemployed persons, totaling 6 million + 1 million = 7 million. The working-age population excludes those under 16 and those who are retired or homemakers, leaving 11 million - 3 million - 0.5 million - 0.5 million = 7 million. Therefore, the labor force participation rate is (7 million / 7 million) * 100 = 100%. However, the correct interpretation of the given options and the calculation mistake leads to a reconsideration that the intended correct answer might be misstated, reflecting a misunderstanding in the calculation process.

Question 15

A country has a population of 326 million. There are 68 million persons under age 16. There are 156.5 million employed persons and 6.5 million unemployed persons. What is the unemployment rate? Round to the nearest whole percentage.

Accepted Answer

The unemployment rate is calculated as the number of unemployed persons divided by the labor force (employed + unemployed), then multiplied by 100. The labor force is 156.5 million + 6.5 million = 163 million. The unemployment rate is (6.5 million / 163 million) * 100 = 3.99%, which rounds to 4%.

Question 16

A country has a population of 326 million. There are 68 million persons under age 16. There are 156.5 million employed persons and 6.5 million unemployed persons. What is the labor force participation rate? Round to the nearest whole percentage.

Accepted Answer

The labor force participation rate is calculated by dividing the labor force (the sum of employed and unemployed persons) by the working-age population (total population minus those under age 16) and then multiplying by 100 to get a percentage. Here, the labor force is 156.5 million (employed) + 6.5 million (unemployed) = 163 million. The working-age population is 326 million (total population) - 68 million (under age 16) = 258 million. Thus, the labor force participation rate is (163 / 258) * 100 = 63.18%, which rounds to 63%.

Question 17

Which of the following statements is NOT true regarding recent economic data in the United States?

Accepted Answer

Recent economic data typically shows that the unemployment rate for bachelor's degree holders is indeed lower than for those with only a high school diploma, that whites generally have lower unemployment rates than African Americans and Hispanics, and that adults have lower unemployment rates than teenagers. However, the statement that the female unemployment rate is considerably higher than the male unemployment rate is not true; in many recent periods, the unemployment rates between genders have been relatively close, with the gap not being considerably high.

Question 18

Which of the following is NOT an example of a way that people become unemployed?

Accepted Answer

Jose retiring and beginning to receive a pension each month is not an example of becoming unemployed, as retirement is typically a voluntary exit from the workforce rather than a loss of employment seeking another job.

Question 19

An unemployed man will no longer be classified as unemployed if either of what two things happens to him?

Accepted Answer

An unemployed person is no longer classified as unemployed if they either exit the labor force (stop looking for work) or if they get a job. These actions change their status in labor force surveys and unemployment statistics.

Question 20

A government program that temporarily provides unemployed persons who have lost a job with transfer payments to replace part of their lost income is called:

Accepted Answer

Unemployment insurance is the program designed to provide temporary financial assistance to workers who have lost their jobs through no fault of their own, helping to replace part of their lost income.

Quiz 21: Unemployment and the Business Cycle