Question 1

What does it mean to conduct a sequential search?

Accepted Answer

A sequential search involves determining an acceptable wage and then accepting the first job offer that meets that wage or exceeds it. This differs from option A, which involves continuously searching for jobs while already employed, option B, which involves accepting a job offer but still searching for a better offer, and option C, which involves accepting the first job offered regardless of wage or fit. Option D involves applying to all job openings, which may not be feasible or effective for all job seekers.

Question 2

James is currently unemployed.He is disappointed every Sunday when none of the job advertisements in the newspaper are for workers with his particular skill set.What type of unemployment is James experiencing?

Accepted Answer

James is experiencing structural unemployment, which occurs when there is a mismatch between the skills and qualifications of workers and the requirements of available jobs. In this case, there are no job advertisements for workers with his particular skill set, indicating that his skills may not be in demand in the current job market.

Question 3

What is the best description of unemployment insurance benefits in the United States?

Accepted Answer

Unemployment benefits in the United States are typically calculated as a percentage of a worker's previous earnings, with a maximum weekly benefit amount set by each state. However, this percentage varies depending on the worker's previous wages, with lower-wage workers receiving a greater percentage of their earnings in benefits. Therefore, option E is the best choice.

Question 4

Anna works on a farm every spring during planting season and every fall during the harvest season.The farm fails to employ Anna during the summer or the winter.What type of unemployment does Anna experience?

Accepted Answer

Anna experiences seasonal unemployment, as she is only employed during specific seasons of the year due to the nature of agricultural work.

Question 5

How are unemployment rates in the United States related to education?

Accepted Answer

Studies consistently show that higher levels of education are associated with lower rates of unemployment. In 2019, the unemployment rate for individuals with a bachelor's degree was 2.2%, compared to 3.7% for high school graduates and 5.2% for individuals without a high school diploma. However, these rates may have shifted due to the impact of the COVID-19 pandemic on the job market.

Question 6

Why is frictional unemployment considered to be productive?

Accepted Answer

Frictional unemployment is considered productive because it encourages workers and firms to engage in search activities that improve the allocation of resources. For example, workers may search for better job opportunities that fit their skills and preferences, while firms may search for the most qualified candidates for job openings. This process can improve the efficiency of the labor market and ultimately lead to better matching between workers and jobs.

Question 7

What is the general relationship between race and unemployment rates in the United States?

Accepted Answer

The general relationship between race and unemployment rates in the United States is that whites have the lowest rate of unemployment, while blacks have the highest rate of unemployment. According to data from the Bureau of Labor Statistics, in August 2021, the unemployment rate for whites was 4.5%, while the rate for blacks was 8.8%. The unemployment rate for Hispanics was 6.4%, which falls in between the rates for whites and blacks. Therefore, option B is the correct answer.

Question 8

In the United States, the average replacement ratio associated with unemployment insurance benefits is

Accepted Answer

The answer of In the United States, the average replacement...

Question 9

Which one of the following statements regarding the intertemporal substitution hypothesis is false?

Accepted Answer

The statement "Wages and hours of leisure will tend to move together over the course of the life-cycle" is a misconception of the intertemporal substitution hypothesis. The hypothesis states that individuals may choose to work more when the real wage is high and less when it is low, regardless of their age or stage in the life-cycle. Therefore, there is no necessary relationship between wages and hours of leisure over the life-cycle.

Question 10

Consider an economy with a labor force of 100 million people.Each period, 60% of the unemployed population find a job while 15% of the employed population lose their job.What is the steady-state unemployment rate in the economy?

Accepted Answer

The answer of Consider an economy with a labor force...

Question 11

Consider an economy with a labor force of 200 million people-180 million are employed while 20 million are unemployed.Each period, 45% of the unemployed population finds a job.If the economy is in a steady-state of unemployment, what percent of the employed population lose their job each period?

Accepted Answer

The answer of Consider an economy with a labor force...

Question 12

Which of the following would not increase the asking wage?

Accepted Answer

The answer of Which of the following would not increase...

Question 13

What best describes unemployment spells in the United States?

Accepted Answer

Most unemployment spells are short, but the majority of unemployment weeks are due to a smaller number of long-term unemployed individuals.

Question 14

The sectoral shifts hypothesis claims that

Accepted Answer

The sectoral shifts hypothesis claims that certain industries or sectors of the economy may experience a decline in demand for labor, causing unemployment among workers with specific skills. These workers may have difficulty finding new jobs because their skills do not match those that employers are looking for. This results in long spells of unemployment, which is known as structural unemployment. Therefore, the best choice is E.

Question 15

How does the asking wage depend on the unemployment insurance system in the United States?

Accepted Answer

When individuals are receiving unemployment insurance benefits, they may be more willing to accept lower wages than when they are not receiving benefits because they want to avoid exhausting their benefits and facing prolonged periods of unemployment without any income. As a result, the asking wage tends to fall as the unemployed worker gets closer to exhausting his or her UI benefits.

Question 16

Compared to offering no unemployment benefits, the unemployment insurance system of the United States probably

Accepted Answer

Unemployment insurance can increase the unemployment rate by providing financial support, which may reduce the urgency for recipients to find new employment quickly.

Question 17

If the steady-state unemployment rate for an economy is 5%, and each period 2% of employed workers lose their jobs, what percent of unemployed workers find employment each period?

Accepted Answer

The answer of If the steady-state unemployment rate for an...

Question 18

Which age group experiences the highest rates of unemployment in the United States?

Accepted Answer

According to the Bureau of Labor Statistics, the age group with the highest unemployment rate in 2021 was 16 to 24 years-old, at 10.3% as of August 2021.

Question 19

Centerville has 200 unemployed people.Of these 200 people, 35 are unemployed for two weeks before finding a new job, 55 are unemployed for four weeks before finding a new job, 30 are unemployed for six weeks before finding a new job, 15 are unemployed for ten weeks before finding a new job, and 65 are unemployed for fifteen weeks before finding a new job.Approximately what is the average spell of unemployment in Centerville?

Accepted Answer

To find the average spell of unemployment, we need to calculate the total number of weeks of unemployment and then divide by the total number of unemployed people.

Total number of weeks of unemployment = (35 x 2) + (55 x 4) + (30 x 6) + (15 x 10) + (65 x 15)

= 70 + 220 + 180 + 150 + 975

= 1595

Total number of unemployed people = 200

Average spell of unemployment = Total number of weeks of unemployment / Total number of unemployed people

= 1595 / 200

= 7.975

≈ 8 weeks

Therefore, the best choice is C, 8 weeks.

Question 20

In the United States from 1950 to 2005, it is most likely that an unemployed person will

Accepted Answer

The answer of In the United States from 1950 to...

Quiz 12: Unemployment