Which of the following is an example of frictional unemployment?
A. Hector looked for a job for five weeks after finishing college. He turned down several jobs that didn't fit his skills, but now has a job that requires the expertise he gained in college.
B. Marsha was laid off from her job with the airline because the recession has reduced the demand for airline travel. She expects to get her job back when the economy picks up.
C. George is an unskilled worker who mows lawns in the summer, but is unemployed the rest of the year.
D. Dora lost her job when the textile factory closed. She does not have skills to work in another industry and has been unemployed for over a year.
Answer: A
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If the marginal propensity to consume is 0.6, the marginal propensity to save is
A) 0.4. B) 0.6. C) 1. D) 1.5.
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. e. 25 percent.
Which of the following items is funded by both the federal and state governments?
a. Medicare b. Medicaid c. Social Security d. Supplemental Security Income
Kate and Ali can live together in a two-bedroom apartment for $600 per month, or they can each rent a one-bedroom apartment for $400 per month. Apart from the rent, they are indifferent between living together and living apart, except for one problem: Kate hates Ali's taste in music. Kate would be willing to pay up to $100 a month to avoid hearing Ali's music. Ali would give up listening to her music for no less than $300 per month. If Kate and Ali decide to live together, is it socially optimal for Ali to play her music in the apartment?
A. Yes, because the benefit to Ali of listening to her music is greater than the cost to Kate. B. Yes, because the benefit to Ali of listening to her music is less than the cost to Kate. C. No, because the benefit to Ali of listening to her music is less than the cost to Kate. D. No, because the benefit to Ali of listening to her music is greater than the cost to Kate.