Why is the unemployment rate never zero, even at full employment?
What will be an ideal response?
The unemployment rate is never zero because there is always churning going on the economy. There are always new workers entering the labor market and searching for work, there are always workers leaving one job to search for another, better job, and there are always firms laying off workers. All these cases lead to unemployment as the workers search for a job.
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In comparison with a perfect competition, a single-price monopolist with the same costs creates a ________ consumer surplus and makes a ________ economic profit
A) smaller; larger B) smaller; smaller C) larger; larger D) larger; smaller
Pollution is an example of a
A) negative externality B) positive externality. C) private cost. D) public good.
Assume that you own an exhaustible resource that is sold competitively. The price of the resource is:
Pt + 1 - C = 1.08(Pt - C), where t = 0 at the beginning of 2005, P = price in dollars per ton, and C = marginal cost of extraction (fixed over time). It is also known that the demand for the resource is: Q = 1,000,000 - 25,000 P, where Q represents output in tons per year. If the beginning of 2005 price is $30 per ton and the marginal cost of extraction is $10 per ton, what will the price be at the end of 2009? What is the user cost of production in 2009? Is it different from the user cost for 2005? Explain. How much of the resource will be extracted in 2009? What is the market rate of interest on money? Explain.
The economic definition of investment includes all of the following except
A. Residential construction. B. Spending for plants and capital equipment. C. A retirement portfolio of stocks and bonds. D. Net changes in business inventory.