Question 1

A firm might offer efficiency wages in order to attract a better pool of applicants.

Accepted Answer

Efficiency wages are wages that are higher than the going market wage rate, offered by a firm in order to attract a better pool of applicants who are more productive and motivated. This can lead to cost savings for the firm in the long run, as more productive workers can increase output and reduce turnover costs.

Question 2

Almost half of all spells of unemployment end when the unemployed person .

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Question 3

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

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Question 4

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

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Question 5

Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

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Question 6

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

Accepted Answer

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Question 7

What problems arise in interpreting unemployment data?

Accepted Answer

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Question 8

Why have labor-force participation rates for women in the United States increased since World War II while labor- force participation rates for men have decreased?

Accepted Answer

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Question 9

Why might a favorable change in the economy, such as technological improvement or a decrease in the price of imported oil, be associated with an increase in frictional unemployment?

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Question 10

Teenage unemployment is higher than unemployment of people ages 20 and over. Explain why economists would attribute at least part of this difference to minimum-wage laws.

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Question 11

Following the recession of 2001, there was a month in which employment and the unemployment rate both rose. Assuming the computations were correct, how is it possible for both to have increased?

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Question 12

A firm might offer efficiency wages in order to reduce shirking.

Accepted Answer

Efficiency wages are higher than market wages and are offered to workers in order to reduce shirking, increase motivation and in turn increase productivity. The higher wage acts as an incentive for workers to perform better and also reduces the possibility of the worker leaving the job as they value the higher wage.

Question 13

How does the government measure the economy's rate of unemployment?

Accepted Answer

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Question 14

Define the natural rate of unemployment and cyclical unemployment.

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Question 15

Discuss the labor-force participation trends for men and women since 1950.

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Question 16

In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a result, turnover and absenteeism fell and productivity and profits rose.

Accepted Answer

This statement is true. Henry Ford did indeed begin paying his workers $5 per day in 1914, which was about double the going wage at the time. The decision had a positive impact on the company, as turnover and absenteeism rates decreased, while productivity and profits rose.

Question 17

An important determinant of a country's standard of living is the amount of it typically experiences.

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Question 18

Some degree of unemployment is in a complex economy.

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Question 19

Compare the 2012 unemployment rates and labor-force participation rates of whites, blacks, adults of prime working age (ages 25-54), and teenagers (ages 16-19).

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Question 20

Since unemployment rates are consistently higher in Canada and some Western European countries than in the United States, it appears that the natural rate of unemployment is lower in the United States. What might explain this difference?

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Quiz 28: Unemployment

A firm might offer efficiency wages in order to attract a better pool of applicants.

Almost half of all spells of unemployment end when the unemployed person .

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?

Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages.

What problems arise in interpreting unemployment data?

Why have labor-force participation rates for women in the United States increased since World War II while labor- force participation rates for men have decreased?

Why might a favorable change in the economy, such as technological improvement or a decrease in the price of imported oil, be associated with an increase in frictional unemployment?

Teenage unemployment is higher than unemployment of people ages 20 and over. Explain why economists would attribute at least part of this difference to minimum-wage laws.

Following the recession of 2001, there was a month in which employment and the unemployment rate both rose. Assuming the computations were correct, how is it possible for both to have increased?

A firm might offer efficiency wages in order to reduce shirking.

How does the government measure the economy's rate of unemployment?

Define the natural rate of unemployment and cyclical unemployment.

Discuss the labor-force participation trends for men and women since 1950.

In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a result, turnover and absenteeism fell and productivity and profits rose.

An important determinant of a country's standard of living is the amount of it typically experiences.

Some degree of unemployment is in a complex economy.

Compare the 2012 unemployment rates and labor-force participation rates of whites, blacks, adults of prime working age (ages 25-54), and teenagers (ages 16-19).

Since unemployment rates are consistently higher in Canada and some Western European countries than in the United States, it appears that the natural rate of unemployment is lower in the United States. What might explain this difference?