TUTORIAL 4
Unemployment
Quiz
1. The unemployment rate is the:
a. percentage of the total population that is jobless
b. ratio of unemployed to employed workers
c. percentage of the adult population that is unemployed
d. percentage of the labor force that is out of work
2. The labor force participation rate equals:
a. the ratio of the adult population to the total population
b. the ratio of the labor force to the total population
c. (Number of the employed + Number of the unemployed)/Adult population
d. the ratio of the employed to the adult population
3. Which of the following is counted in the unemployed category?
a. a person who does not have a full-time job but is doing a part-time job
b. a person who is doing an unpaid job in his family’s business
c. a housewife stays at home to take care of her children
d. a person is waiting to be recalled to a job from which he had been laid off
4. who is not included in the labor force?
a. a graduate who wants and has tried a lot to find a job but have given up after many
unsuccessful searches
b. your grand-parent who has just retired
c. a full-time student
d. all of the above
5. Suppose that you graduated from Hanoi University 2 months ago and you are still
searching for a job. This is an example of:
a. structural unemployment
b. cyclical unemployment
c. frictional unemployment
d. none of the above
6. Cyclical unemployment:
a. is associated with the short-run ups and downs of economic activity
b. seasonal unemployment
c. is the deviation of unemployment from its natural rate
d. both a and c
7. Structural unemployment:
a. Results when wages are set above the equilibrium level
b. Results because the demand for labor is lower than the supply
c. The number of jobs in some labor markets is insufficient to provide a job for
everyone who wants one
d. All of the above
8. The natural rate of unemployment is
a. always higher than the cyclical unemployment rate
b. the rate of unemployment occurs when the economy is at its potential output
c. equal to cyclical unemployment rate
d. only exists in the short-term
9. Which of the following is true regarding labor unions:
a. Unions increases benefit of the insiders at the expense of the outsiders
b. Unions help enhance the power of the firm that hire workers
c. Union is a form of cartel and it is prohibited in almost countries over the world
d. Unions is a cause of frictional unemployment
10. The minimum wage:
a. affects experienced workers more than teenagers
b. is beneficial for new graduates as they can earn higher salary
c. is the reason why wages may be “too high”
d. affects everyone in the labor market
11. Which of the following is true regarding the theory of efficiency wages:
a. Firms cannot make any decisions on the wage they pay to workers because this is
regulated by the government
b. The lower the wage is, the more productive the workers is
c. Firms pay high wage as they want to share their profit with their workers
d. Firms pay high wage as they think that high wage can help reduce worker turnover
rate, improve worker health, enhance worker effort of help them pick workers of high
quality.
QUESTIONS FOR DISCUSSION
Is unemployment typically short-term of long-term? What is the cost and benefit of
unemployment (to individuals and the society as a whole?)
PROBLEMS AND APPLICATIONS
Answer the questions below based on the following information about an economy. All
figures are in millions:
Total population: 77,6
Adult population: 40
Employed: 37.6
The percentage of total population in the labor force: 49,6%
1. Calculate the labor force, the unemployment rate and the labor force participation in the
economy
2. If the natural rate of unemployment is 1%, what is the cyclical unemployment rate in this
economy?
Problem in the textbook:
Problem 1, 5, 8, 9 on pages 636, 637.