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Unemployment 6913
28.
Wanda quit her job because she was unhappy at work. Arnold was fired from his landscaping job
because his
company was downsizing. Who is eligible for unemployment insurance benefits?
a.
both Wanda and Arnold
b.
Wanda but not Arnold
c.
Arnold but not Wanda
d.
neither Wanda nor Arnold
29.
A typical American worker covered by unemployment insurance receives
a.
50 percent of his former wages for 26 weeks.
b.
50 percent of his former wages for 52 weeks.
c.
100 percent of his former wages for 26 weeks.
d.
100 percent of his former wages for 52 weeks.
30.
Unemployment insurance
a.
reduces search effort which raises unemployment.
b.
reduces search effort which lowers unemployment.
c.
increases search effort which raises unemployment.
d.
increases search effort which decreases unemployment.
31.
Evidence from research studies by economists
a.
shows that increased unemployment benefits decrease the job search efforts of the
unemployed.
b.
shows that increased unemployment benefits have virtually no effect on the job search efforts
of the
unemployed.
c.
shows that increased unemployment benefits increase the job search efforts of the
unemployed.
d.
is conflicting on what increased unemployment benefits do to the job search efforts of the
unemployed.
32.
More generous unemployment insurance would
a.
raise structural unemployment.
b.
raise frictional unemployment.
c.
lower structural unemployment.
d.
lower frictional unemployment.
33.
Economists would predict that, other things the same, the more generous unemployment
compensation a country has,
the
a.
shorter the duration of each spell of unemployment and the higher the unemployment rate.
b.
shorter the duration of each spell of unemployment and the lower the unemployment rate.
c.
longer the duration of each spell of unemployment and the higher the unemployment rate.
d.
longer the duration of each spell of unemployment and the lower the unemployment rate.
34.
Unemployment insurance
a.
reduces the hardship of unemployment, but it also increases the amount of unemployment.
b.
reduces the incentive for the unemployed to find and take new jobs.
c.
causes workers to be less likely to seek guarantees of job security when they negotiate with
employers over
the terms of employment.
d.
All of the above are correct.
35.
Unemployment insurance
a.
may improve the ability of the economy to match workers with appropriate jobs.
b.
reduces the job search efforts of the unemployed.
c.
increases the amount of frictional unemployment in the economy.
d.
All of the above are correct.
36.
In the 1990’s Ireland made unemployment benefits less generous. This change would likely have
reduced
a.
both structural unemployment and the natural rate of unemployment.
b.
structural unemployment but not the natural rate of unemployment.
c.
both frictional unemployment and the natural rate of unemployment.
d.
frictional unemployment but not the natural rate of unemployment.
37.
Which of the following is correct?
a.
Unemployment insurance raises structural unemployment because it reduces the job search
efforts of the
unemployed.
b.
Most economists are skeptical of the value of unemployment insurance primarily because they
believe that it
results in a poorer match between workers and jobs.
c.
Studies show that when the unemployed become ineligible for benefits, the probability of their
finding a job
rises markedly.
d.
All of the above are correct.
38.
Frictional unemployment is
a.
not inevitable; rather, it can be reduced to zero by well-designed public policies.
b.
not inevitable; rather, it could be reduced to zero if by the elimination of unemployment
insurance.
c.
inevitable, because at any given time, jobs are being created in some firms and destroyed in
other firms.
d.
inevitable, because in some industries, wages are always set above the level that brings supply
and demand
into equilibrium.
39.
An economist claims that changes in information technology and unemployment insurance have
reduced
unemployment. Which of these changes affect frictional unemployment?
a.
both the changes in information technology and unemployment insurance
b.
only the changes in information technology
c.
only the changes in unemployment insurance
d.
neither the changes in information technology nor the changes in unemployment insurance
40.
Which of the following is not a cause of frictional unemployment?
a.
the destruction of manufacturing jobs
b.
a worker leaving a job to find one with better benefits
c.
minimum-wage laws
d.
unemployment insurance
41.
If changing consumer preferences increase the demand for satellite radios and decrease the
demand for video
cassette recorders, the economy will likely exhibit
a.
an increase in the natural rate of unemployment.
b.
a decrease in the natural rate of unemployment.
c.
frictional unemployment.
d.
efficiency wages.
42.
Which of the following is not correct?
a.
The unemployment rate is an imperfect measure of a nation’s overall level of economic
well-being.
b.
Most job search in the U.S. economy takes place without intervention by the government.
c.
Most economists agree that eliminating unemployment insurance would increase the nation’s
overall level of well-being.
d.
Other things the same, countries that offer more generous and longer-lasting unemployment
insurance benefits
are likely to have higher unemployment rates.
43.
Unemployment insurance tends to
a.
decrease structural unemployment.
b.
decrease cyclical unemployment.
c.
increase frictional unemployment.
d.
increase the number of discouraged workers.
44.
The growth rate for the American economy is
a.
lower in the 21st century than for the previous 250 years.
b.
higher in the 21st century than for the previous 250 years and increasing rapidly.
c.
higher in the 21st century than for the previous 250 years but increasing slowly.
d.
approximately equal in the 21st century and in the previous 250 years.
45.
The main explanation for the lower growth rate for the American economy in the 21st century
compared to the
previous 250 years is
a.
higher minimum wages.
b.
that although Americans are working more, they are more distracted by technology and
therefore are less
productive at work.
c.
that Americans are working less.
d.
the increasing labor-force participation rates of women with young children.
46.
Access to which of the following explains the lower growth rate for the American economy in the
21st century
compared to the previous 250 years?
a.
food stamps
b.
Social Security disability payments
c.
Pell grants
d.
All of the above are correct.
Multiple Choice – Section 03: Minimum-Wage Laws
1.
Which of the following is not correct?
a.
Frictional unemployment results from the process of matching workers and jobs.
b.
Structural unemployment results when the number of jobs is insufficient for the number of
workers.
c.
Minimum wages are the predominant reason for unemployment in the U.S. economy.
d.
When a minimum-wage law forces the wage to remain above the level that balances supply and
demand, it
raises the quantity of labor supplied and reduces the quantity of labor demanded
compared to the equilibrium
level.
2.
Minimum-wage laws
a.
create unemployment.
b.
do not apply in states with right-to-work laws.
c.
affect highly-educated workers more than high school dropouts.
d.
cause labor shortages, which further raise wages above equilibrium.
3.
Minimum-wage laws
a.
reduce unemployment.
b.
cause labor shortages, which further raise wages above equilibrium.
c.
affect highly-educated workers more than high school dropouts.
d.
None of the above is correct.
4.
Minimum wages create unemployment in markets where they create a
a.
shortage of labor. Unemployment of this type is called frictional.
b.
shortage of labor. Unemployment of this type is called structural.
c.
surplus of labor. Unemployment of this type is called frictional.
d.
surplus of labor. Unemployment of this type is called structural.
5.
Minimum wages create unemployment in markets where they create a
a.
shortage of labor. Minimum wage laws are not the predominant reason for unemployment in the
U.S.
b.
shortage of labor. Minimum wage laws are the predominant reason for unemployment in the
U.S.
c.
surplus of labor. Minimum wage laws are not the predominant reason for unemployment in the
U.S.
d.
surplus of labor. Minimum wage laws are the predominant reason for unemployment in the U.S.
6.
When a minimum-wage law forces the wage to remain above the equilibrium level, it
a.
raises both the quantity of labor supplied and the quantity of labor demanded compared to the
equilibrium
level.
b.
raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the
equilibrium
level.
c.
reduces the quantity of labor supplied and raises the quantity of labor demanded compared to the
equilibrium
level.
d.
reduces both the quantity of labor supplied and the quantity of labor demanded compared to the
equilibrium
level.
7.
When a minimum-wage law forces the wage to remain above the equilibrium level, the result is
a.
both a shortage of labor and a shortage of jobs.
b.
a shortage of labor and a surplus of jobs.
c.
a surplus of labor and a shortage of jobs.
d.
both surplus of labor and a surplus of jobs.
8.
Minimum-wage laws can keep wages
a.
above equilibrium and cause a surplus of labor.
b.
above equilibrium and cause a shortage of labor.
c.
below equilibrium and cause a surplus of labor.
d.
below equilibrium and cause a shortage of labor.
9.
An increase in the minimum wage
a.
increases both the quantity demanded and the quantity supplied of labor.
b.
decreases both the quantity demanded and the quantity supplied of labor.
c.
increases the quantity of labor demanded but decreases the quantity of labor supplied.
d.
decreases the quantity of labor demanded but increases the quantity of labor supplied.
10.
An increase in the minimum wage
a.
reduces structural unemployment.
b.
reduces frictional unemployment,
c.
increases structural unemployment.
d.
increases frictional unemployment.
11.
If the minimum wage is currently above the equilibrium wage, then a decrease in the minimum
wage
a.
increases both the quantity demanded and the quantity supplied of labor.
b.
decreases both the quantity demanded and the quantity supplied of labor.
c.
increases the quantity of labor demanded but decreases the quantity of labor supplied.
d.
decreases the quantity of labor demanded but increases the quantity of labor supplied.
12.
If the minimum wage were currently above the equilibrium wage, then a decrease in the minimum
wage that kept it
above the equilibrium wage would
a.
increase the surplus of labor.
b.
reduce the surplus of labor.
c.
increase the shortage of labor.
d.
reduce the shortage of labor,
6928 Unemployment
Table 28-7
Below is data about the labor market in the city of Productionville.
Wage
Quantity Demanded
Quantity Supplied
$8
6,000
16,000
$7
9,000
14,000
$6
12,000
12,000
$5
15,000
10,000
$4
18,000
8,000
13.
Refer to Table 28-7. If the local government imposed a minimum wage of $4 in Productionville,
how many people
would be unemployed?
a.
0
b. 2,000
c. 3,000
d. 10,000
14.
Refer to Table 28-7. If the local government imposed a minimum wage of $5 in Productionville,
how many people
would be unemployed?
a.
0
b. 2,000
c. 3,000
d. 5,000
15.
Refer to Table 28-7. If the local government imposed a minimum wage of $6 in Productionville,
how many people
would be unemployed?
a.
0
b. 2,000
c. 3,000
d. 5,000
16.
Refer to Table 28-7. If the local government imposed a minimum wage of $7 in Productionville,
how many people
would be unemployed?
a.
0
b. 2,000
c. 5,000
d. 10,000
17.
Refer to Table 28-7. If the local government imposed a minimum wage of $8 in Productionville,
how many people
would be unemployed?
a. 0
b.
2,000
c.
5,000
d.
10,000
Table 28-8
Below is data about the labor market in the state of Northwoods.
Wage
Quantity Demanded
Quantity Supplied
$10
80,000
120,000
$9
90,000
110,000
$8
100,000
100,000
$7
110,000
90,000
$6
120,000
80,000
18.
Refer to Table 28-8. If the state government imposed a minimum wage of $8, how many people
would be
unemployed?
a. 0
b.
10,000
c.
20,000
d.
40,000
19.
Refer to Table 28-8. If the state government imposed a minimum wage of $9, how many people
would be
unemployed?
a. 0
b.
10,000
c.
20,000
d.
40,000
20.
Refer to Table 28-8. If the state government imposed a minimum wage of $10, how many
people would be
unemployed?
a. 0
b.
10,000
c.
20,000
d.
40,000
6932 Unemployment
Figure 28-3
21.
Refer to Figure 28-3. At the equilibrium wage, how many workers are unemployed?
a. 0
b.
4,000
c.
5,000
d.
8,000
22.
Refer to Figure 28-3. At the equilibrium wage, how many workers are employed?
a. 0
b.
1,000
c.
5,000
d.
9,000
