Suppose that consumers decide to buy more Blu-Ray players and fewer DVD players.As a result,Blu-Ray companies expand production while DVD companies lay off workers.What is this an example of?
A) structural unemployment created by efficiency wages
B) cyclical unemployment created by a recession
C) frictional unemployment created by a sectoral shift in demand
D) frictional unemployment created by a sectoral shift in supply

Question

Quizplus · Accepted Answer

This is an example of frictional unemployment created by a sectoral shift in demand, as the demand for Blu-Ray players increased while the demand for DVD players decreased. This caused workers in the DVD company to lose their jobs, leading to frictional unemployment, which is caused by shifts in demand or supply in specific industries or sectors, and not by overall economic conditions.

Suppose That Consumers Decide to Buy More Blu-Ray Players and Fewer