Unemployment
Resources
Business Cycle
Wage Determination
Labor Supply
100
What is unemployed?
people who do not have a job, are available to work, and have actively searched for work in the last 4 weeks
100
Marginal Revenue Product measures...
A: amount by which the addition of one more worker increases a firms total revenue
B:Decline in product price that a firm must accept to sell the extra output of one more worker
C: Increase in total resource cost resulting from the hire of one extra unit of a resource
D: increase in total revenue resulting from the production of one more unit of a product
A: amount by which the addition of one more worker increases a firms total revenue
100
The phase of the business cycle in which real GDP declines is called
A recession
100
A recession is a decline in
a:the inflation rate that lasts six months or longer.
b: the unemployment rate that lasts six months or longer.
C: real GDP that lasts six months or longer.
d: potential GDP that lasts six months or longer.
C: real GDP that lasts six months or longer
100
What does the labor supply demonstrate?
◦As wage rate increases, more workers make their labor available for sale
◦Positive relationship between wage rate and quantity of labor supplied
◦Market labor supply curve is upward-sloping
200
What are the three types of unemployment?
Frictional
Structural
Cyclical
200
The MRP curve for labor...
A: intersects the firm's labor demand curve from above
B: is the firms labor demand curve
C: lies below the firms labor demand curve
D: Lies above the firm's labor demand curve
B: is the firms labor demand curve
200
In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?
Expansion
200
if the nominal wages of carpenters rose by 5 percent in 2013 and the price level increased by 3 percent, then the real wages of carpenters
increased by 2%
5-3=2
200
What is real wage?
◦The quantity of goods and services that can be bought with (the purchasing power of) one’s nominal wage.
◦Adjusted for inflation (rising prices)
◦Measured in constant dollars, compared to base year prices
300
If Jane just graduated and is not employed but looking for work, what kind of unemployed is she
Frictional
300
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 80 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is...
48
(80-72)/1=8*6=48
300
3 workers
300
Unemployed 7
Total Population 145
Employed 95
Discouraged Workers 3
The table contains information about the hypothetical economy of Scoob. All figures are in millions. The labor force in Scoob is
102
--Labor force= Employed and Unemployed
300
A profit Maximizing firm’s daily total revenue is 200$ with 6 workers, 230$ with 7 workers, and 280$ with 8 workers. Each employee is paid 40$ an hour. How many workers should the firm hire?
230-200=30<40
280-230=50>40 hire the 7th worker
400
Someone is unemployed because of a fluctuation in economic activity
Cyclical
400
An employer hiring in a competitive labor market should hire additional labor as long as
MRP>wage rate
400
24$
400
What is the equation to calculate CPI?
(Market Value Basket2/Market Value of Basket1)*100
400
Which of the following will not shift the demand curve for labor?
- A change in the wage rate/ resource cost
- An increase in the price of the product that labor is helping to produce
- The labor pool is using more capital
- The adoption of a more efficient method of combining labor and capital in the production process
A change in the wage rate/ resource cost
500
Alice has been looking for work so long that she has simply given up the search - she is what?
Discouraged worker
500
Harry owns a barbershop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. The MP of the second barber is
18 haircuts
MP=change in TP/change in Q
(42-24)/1=18
500
The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are
A: military goods and capital goods
B: services and nondurable consumer goods
C: clothing and education
D: capital goods and durable goods
D: capital goods and durable consumer goods
500
What is the equation to calculate inflation?
Percent change in CPI
(CPInew-CPIold)/CPIold
500
If the wages are 11$ an hour, how many workers should we hire?
Considering that wages are 11$ an hour, and all other costs total to 150$, How much profit is the firm making?
MRP: --, 15, 12, 10
We should hire 2 workers because MRP>=MRC
- Profit= Revenue-costs
- Costs: 11x2=22+ 150= 172$
- Revenue= 27$ for three workers
- 27-172=-142