Exhibit 16-2 Unemployment categories
Category# ofIndividuals
Frictional unemployment 20
Structural unemployment 35
Cyclical unemployment 60
Discouraged workers 5
Underemployed workers 10
Fully employed workers410
Population900
Consider an economy made up of 100 people, 50 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The unemployment rate is approximately:
A. 10 percent.
B. 12 percent.
C. 17 percent.
D. 20 percent.
Answer: C
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The Coase theorem applies when property rights are given
A) to the victim of pollution but not to the polluter. B) to the polluter but not to the victim. C) to either the polluter or the victim. D) neither to the polluter nor to the victim.
One reason for the extraordinary growth of foreign financial markets is
A) decreased trade. B) increases in the pool of savings in foreign countries. C) the recent introduction of the foreign bond. D) slower technological innovation in foreign markets.
Which of the following is an example of detrimental externality?
A. A trailer’s entry onto an overcrowded road that delays the movement of other vehicles. B. Fall in demand for gasoline in the United States softens the price of gasoline in the global market. C. Government investment in energy generation from nonconventional sources. D. Society devotes huge quantity of its scarce resources for vital innovative activity.
Consider the accompanying figure representing the labor market below.
The imposition of a $12 per hour minimum wage causes total economic surplus in this labor market to ________ by ________.
A. rise; $400 B. fall; $1,600 C. rise; $800 D. fall; $800