unemployment.
a.
True
b.
False
160. Unemployment insurance is designed to offer workers full protection against job loss.
a.
True
b.
False
161. The unemployed who quit their jobs, were fired for cause, or just entered the labor force are not eligible for
unemployment insurance.
a.
True
b.
False
162. The unemployed who quit their jobs, were fired for cause, or just entered the labor force are eligible for
unemployment insurance.
a.
True
b.
False
163. A typical American worker covered by unemployment insurance receives 50 percent of his former wages for 52
weeks.
a.
True
b.
False
164. Unemployment insurance reduces the incentive for the unemployed to find and take new jobs.
a.
True
b.
False
165. Unemployment insurance causes workers to be less likely to seek guarantees of job security when they negotiate with
employers over the terms of employment.
a.
True
b.
False
166. Studies have shown that the design of the unemployment insurance system reduces the job search effort of the
unemployed.
a.
True
b.
False
167. Some economists have argued that unemployment insurance improves the ability of the economy to match each
worker with the most appropriate job.
a.
True
b.
False
168. Most economists agree that eliminating unemployment insurance would increase the amount of unemployment in the
economy.
a.
True
b.
False
169. Most economists agree that eliminating unemployment insurance would increase the nation’s overall level of well-
being.
a.
True
b.
False
170. Other things the same, countries that offer more generous and longer-lasting unemployment insurance benefits are
likely to have higher unemployment rates.
a.
True
b.
False
171. Structural unemployment results when the number of jobs is insufficient for the number of workers.
a.
True
b.
False
172. Minimum wages are the predominant reason for unemployment in the U.S. economy.
a.
True
b.
False
173. When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity
of labor supplied is higher and the quantity demanded of labor is lower than at the equilibrium wage.
a.
True
b.
False
174. When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity
of labor supplied is lower and the quantity of labor demand is higher than at the equilibrium wage.
a.
True
b.
False
175. When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the result is
a surplus of labor.
a.
True
b.
False
176. When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the result is
a shortage of labor.
a.
True
b.
False
177. When a minimum-wage law forces the wage to remain above the level that balances supply and demand, there are
more workers willing to work than there are jobs, so some workers are unemployed.
a.
True
b.
False
178. A minimum wage that is below the equilibrium wage rate does not raise unemployment.
a.
True
b.
False
179. Minimum wage laws help explain the natural rate of unemployment if they create a surplus in any labor market.
a.
True
b.
False
180. Minimum-wage laws are one reason there is always some unemployment in the U.S. economy.
a.
True
b.
False
181. Minimum-wage laws affect all workers.
a.
True
b.
False
182. Most U.S. workers have wages well above the legal minimum, so minimum-wage laws do not prevent the wage from
adjusting to balance supply and demand.
a.
True
b.
False
183. Minimum-wage laws matter most for the least skilled and least experienced members of the labor force, such as
teenagers.
a.
True
b.
False
184. It is only among the least skilled and least experienced members of the labor force that minimum-wage laws cause
unemployment.
a.
True
b.
False
185. U.S. Department of Labor data show that minimum-wage workers tend to be young, less educated, more likely to be
working part time, and concentrated in the leisure and hospitality industry.
a.
True
b.
False
186. If the wage is kept above the equilibrium level for any reason, the result is unemployment.
a.
True
b.
False
187. If the wage is kept above the equilibrium wage for any reason, the result is structural unemployment.
a.
True
b.
False
188. If the wage is kept above the equilibrium level because of minimum-wage laws, then the result is unemployment; if
the wage is kept above the equilibrium level for some other reason, the result need not be unemployment.
a.
True
b.
False
189. When job search is the explanation for unemployment, workers are searching for the jobs that best suit their tastes
and skills, but when the wage is above the equilibrium level, the quantity of labor supplied exceeds the quantity of labor
demanded, and workers are unemployed because they are waiting for jobs to open up.
a.
True
b.
False
190. In the 1940s and 1950s, about one-third of U.S. workers belonged to unions, but today, only about one–fifth of U.S.
workers belong to unions.
a.
True
b.
False
191. A union is an employer association that bargains with workers over wages, benefits, and working conditions.
a.
True
b.
False
192. Today, unions play a larger role in Europe than they do in the U.S.
a.
True
b.
False
193. When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand.
a.
True
b.
False
194. A union is a type of cartel.
a.
True
b.
False
195. Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.
a.
True
b.
False
196. The process by which unions and firms agree on the terms of employment is called collective bargaining.
a.
True
b.
False
197. If a union and a firm cannot reach an agreement on the terms of employment, then the union can organize a
withdrawal of labor from the firm, called a strike.
a.
True
b.
False
198. Economists have found that union workers earn about 30 to 40 percent more than similar workers who do not belong
to unions.
a.
True
b.
False
199. When a union raises the wage above the equilibrium level, it reduces the quantity of labor supplied and raises the
quantity of labor demanded, resulting in unemployment.
a.
True
b.
False
200. The introduction of a union into a firm benefits all of that firm’s workers.
a.
True
b.
False
201. Some of a firm’s workers are made worse off by the introduction of a union.
a.
True
b.
False
202. Unions are often thought to cause conflict between different groups of workers — between the insiders who benefit
from high union wages and the outsiders who do not get the union jobs.
a.
True
b.
False
203. Unemployment generated by the existence of labor unions is structural unemployment and so contributes to the
natural rate of unemployment.
a.
True
b.
False
204. When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy,
which reduces wages in industries that are not unionized.
a.
True
b.
False
205. Workers in unions reap the benefit of collective bargaining, while workers not in unions bear some of the cost.
a.
True
b.
False
206. Unions are exempt from U.S. antitrust laws.
a.
True
b.
False
207. In the U.S., it is illegal for employers to interfere when workers try to organize unions.
a.
True
b.
False
208. In the U.S., the National Labor Relations Board is the government agency that enforces workers’ right to unionize.
a.
True
b.
False
209. Right-to-work laws give workers in a unionized firm the right to choose whether to join the union.
a.
True
b.
False
210. Right-to-work laws allow striking union members to be permanently replaced.
a.
True
b.
False
211. Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable.
a.
True
b.
False
212. Advocates of unions contend that unions are a necessary antidote to the market power of the firms that hire workers
and that unions are important for helping firms respond efficiently to workers’ concerns.
a.
True
b.
False
213. Most economists believe unions are bad for the economy as a whole.
a.
True
b.
False
214. According to the theory of efficiency wages, firms operate more efficiently if wages are above the equilibrium level.
a.
True
b.
False
215. According to the theory of efficiency wages, firms operate more efficiently if wages are below the equilibrium level.
a.
True
b.
False
216. According to the theory of efficiency wages, it may be profitable for firms to keep wages high even in the presence
of a surplus of labor.
a.
True
b.
False
217. Efficiency wages create structural unemployment.
a.
True
b.
False
218. A firm might offer efficiency wages so its workers will eat a more nutritious diet and therefore be healthier and more
productive.
a.
True
b.
False
219. The efficiency-wage theory of worker health is more relevant for less developed countries than rich countries.
a.
True
b.
False
220. A firm might offer efficiency wages to reduce worker turnover and thereby reduce production costs.
a.
True
b.
False
221. A firm might offer efficiency wages in order to attract a better pool of applicants.
a.
True
b.
False
222. A firm might offer efficiency wages in order to reduce shirking.
a.
True
b.
False
223. 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.
a.
True
b.
False
224. The rate of unemployment in a country is unrelated to its level of GDP.
a.
True
b.
False
225. If the number of people employed rises by 180,000 and the number of people unemployed falls by 200,000 while the
adult population stays the same, then the labor force participation rate rises.
a.
True
b.
False
226. The Bureau of Labor Statistics produces data on unemployment by using data on claims filed for unemployment
insurance.
a.
True
b.
False
227. Between 2002 and 2014 the number of workers employed in construction fell while the number of workers employed
in food services rose.
a.
True
b.
False
228. Changes in the products for which a nation has a comparative advantage create sectoral shocks leading to an increase
in frictional unemployment.
a.
True
b.
False
