Question 1

Persons who do not hold a job, but are actively seeking work are considered:

Accepted Answer

People who are not employed but are actively seeking work are considered unemployed. This is one of the categories used by government agencies to measure unemployment rates.

Question 2

Which of the following individuals are considered officially unemployed?

Accepted Answer

A) Discouraged workers are not currently searching for a job, so they are not considered officially unemployed.
B) An individual who quits their job for personal reasons, such as to raise a child, is considered voluntarily unemployed and is not counted as officially unemployed.
C) Someone who is not looking for a job because they work in the underground economy is still considered to be employed, even if their work is not reported to the government. Therefore, they are not officially unemployed.
D) None of the above individuals are considered officially unemployed. Officially unemployed individuals are those who are currently out of work, actively seeking employment, and available to work.

Question 3

A person who works part-time is considered to be:

Accepted Answer

A person who works part-time is still considered employed, as they are actively working and earning income.

Question 4

In November 1995 the labor force in Aberdeen, South Dakota, was 14,800. There were 14,483 persons employed. The local unemployment rate:

Accepted Answer

To find the unemployment rate, we need to divide the number of unemployed individuals by the labor force and multiply by 100.

Number of unemployed individuals = Labor force - number of employed individuals

Number of unemployed individuals = 14,800 - 14,483 = 317

Unemployment rate = (317/14,800) x 100 = 2.1%

Therefore, the local unemployment rate was 2.1%. Option B is the correct answer.

Question 5

Kathryn chooses to go to college full-time rather than to work. Kathryn:

Accepted Answer

Kathryn's decision to go to college instead of work means she is not currently looking for employment or actively engaged in the labor force, so she is not considered part of it. Therefore, choice A) is the best answer.

Question 6

If the number of employed persons in a country equals 24 million, the number of unemployed persons equals 8 million, and the number of persons over age 16 in the population equals 40 million, the unemployment rate equals:

Accepted Answer

The unemployment rate is calculated as the number of unemployed persons divided by the labor force (employed + unemployed), then multiplied by 100. Here, the labor force is 24 million + 8 million = 32 million. The unemployment rate is (8 million / 32 million) * 100 = 25 percent.

Question 7

Persons who do not hold a job and are not actively seeking work are considered:

Accepted Answer

Persons who are not employed and also not seeking employment are considered to be out of the labor force. They are not counted in the official statistics of unemployment.

Question 8

A college student who is enrolled in school full-time and not seeking employment is considered:

Accepted Answer

A college student who is enrolled in school full-time and not seeking employment is considered out of the labor force because they are not actively seeking employment or available to work, which are the two key criteria to be considered unemployed.

Question 9

A discouraged worker is someone who:

Accepted Answer

A discouraged worker is someone who has given up looking for work and is no longer actively seeking employment. However, they are not considered unemployed because they are not actively looking for a job. Therefore, option D is the correct choice.

Question 10

The unemployment rate in a town in which 65,400 persons are employed and 11,000 are unemployed equals:

Accepted Answer

The unemployment rate is calculated as the number of unemployed persons divided by the labor force (employed + unemployed) times 100. Here, it's (11,000 / (65,400 + 11,000)) * 100 = 14.4%.

Question 11

A discouraged worker is:

Accepted Answer

A discouraged worker is someone who has given up on looking for work because they believe that there are no jobs available for them. This is different from option A, where the person chooses to quit work for a specific reason, such as attending college. Option C may also describe someone who is underemployed, but it does not capture the aspect of giving up on job search.

Question 12

Parts of the unemployment rate which might increase when labor market conditions are better do include:

Accepted Answer

When labor market conditions are better, people become more confident about finding a job and may voluntarily quit their existing jobs to pursue better opportunities. In addition, new graduates and individuals who were previously discouraged from entering the labor force may also begin to look for work, increasing the number of people who are newly entering the labor force. Finally, those who had previously given up on finding employment may begin searching again, leading to an increase in the number of people re-entering the labor force. Therefore, all of the above choices are likely to increase when labor market conditions are better.

Question 13

If the number of employed persons equals 180 million, the number of unemployed persons equals 15 million, and the number of persons over age 16 in the population equals 210 million, the unemployment rate equals ____ and the labor force participation rate equals ____.

Accepted Answer

The answer of If the number of employed persons equals...

Question 14

If a large number of individuals file unemployment claims while working in the underground economy:

Accepted Answer

When individuals file for unemployment claims while still earning income through the underground economy, they are not truly unemployed in the economic sense. This situation leads to an overstatement of the unemployment rate because these individuals are counted as unemployed in official statistics, despite having income sources.

Question 15

Bill looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered:

Accepted Answer

Bill is considered out of the labor force because he is not actively seeking employment and is not currently working.

Question 16

Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking. What would happen to the unemployment rate?

Accepted Answer

The unemployment rate would fall because those who have given up on finding a job are no longer considered part of the labor force, and therefore are not counted as unemployed. This would decrease the number of unemployed individuals and decrease the unemployment rate.

Question 17

A person who works 25 hours per week:

Accepted Answer

A person who works 25 hours per week is considered to be part of the labor force, as they are employed and actively working. They are not considered to be a discouraged worker (A) who has given up on finding employment or unemployed (B) who is actively seeking employment but not currently working.

Question 18

Which of the following groups of people would be included in the official unemployment rate?

Accepted Answer

The official unemployment rate only includes individuals who are actively seeking employment but are unable to find a job. Part-time workers are considered employed, even if they would prefer to work full-time. Discouraged workers have stopped actively seeking work and are thus not considered part of the labor force. However, workers who are temporarily laid off from jobs to which they expect to return are considered unemployed and are included in the official unemployment rate.

Question 19

Which of the following individuals would be considered unemployed?

Accepted Answer

None of the provided options meet the criteria for being considered unemployed. Unemployment requires actively seeking work and not being employed; the scenarios described do not fit this definition.

Question 20

If there are discouraged workers:

Accepted Answer

Discouraged workers are those who have given up on finding work and are no longer actively seeking employment. They are not included in the official count of the unemployed. If they were included, the unemployment rate would be higher and more accurately reflect the true level of unemployment. Therefore, the unemployment rate tends to understate the true level of unemployment when there are discouraged workers.

Quiz 10: Consumer Choice Theory