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Which of the following explanations of the natural rate of unemployment is most important for the Canadian economy?


A) job search
B) minimum-wage laws
C) unions
D) Economists have not determined the answer to this question.

E) A) and D)
F) B) and C)

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Teenage unemployment is higher than unemployment of people ages 20 and over. Explain why economists would attribute at least part of this difference to minimum-wage laws. (Hint: who is likely to get paid more?)

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People who are experienced and educated ...

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Figure 28-1 Figure 28-1 -Refer to Figure 28-1. If there was a minimum wage of $4 and then the government instituted a minimum wage of $5, what would happen to employment in this market? A) Unemployment would be unchanged. B) Unemployment would drop by 10. C) Unemployment would rise by 10. D) Unemployment would rise by 20. -Refer to Figure 28-1. If there was a minimum wage of $4 and then the government instituted a minimum wage of $5, what would happen to employment in this market?


A) Unemployment would be unchanged.
B) Unemployment would drop by 10.
C) Unemployment would rise by 10.
D) Unemployment would rise by 20.

E) B) and D)
F) B) and C)

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How is the labour-force participation rate computed?


A) as the number of adults in the labour force divided by the adult population times 100
B) as the number of adults in the labour force divided by the number of unemployed times 100
C) as the number of adults in the labour force divided by the unemployment rate times 100
D) as the number of adults in the labour force times the participation rate times 100

E) C) and D)
F) A) and B)

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Figure 28-1 Figure 28-1 -Refer to Figure 28-1. If there was no minimum wage and then the government instituted a minimum wage of $6, what would happen to employment in this market? A) Employment would rise by 10. B) Employment would fall by 20. C) Unemployment would increase by 10. D) Unemployment would increase by 20. -Refer to Figure 28-1. If there was no minimum wage and then the government instituted a minimum wage of $6, what would happen to employment in this market?


A) Employment would rise by 10.
B) Employment would fall by 20.
C) Unemployment would increase by 10.
D) Unemployment would increase by 20.

E) A) and B)
F) None of the above

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Table 28-1. This table shows the 2007 data for males and females aged 15 and over in the country of Dan. Table 28-1. This table shows the 2007 data for males and females aged 15 and over in the country of Dan. -Refer to Table 28-1. What is the adult labour force in Dan? A) 90 million B) 150 million C) 160 million D) 230 million -Refer to Table 28-1. What is the adult labour force in Dan?


A) 90 million
B) 150 million
C) 160 million
D) 230 million

E) All of the above
F) A) and B)

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Statistics Canada provides labour data as presented in the table below. Based on this data, answer the following questions. Statistics Canada provides labour data as presented in the table below. Based on this data, answer the following questions. a.What was the labour force in June 2010? b.What was the participation rate? c.What was the unemployment rate? d.What was the employment rate? a.What was the labour force in June 2010? b.What was the participation rate? c.What was the unemployment rate? d.What was the employment rate?

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a.Labour force = unemployed + employed (...

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Tom is looking for work after school, but everywhere he fills out an application he is told that so have lots of others. Simon has a law degree. Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use. To which categories of unemployment the two persons belong?


A) Tom and Simon are both frictionally unemployed.
B) Tom and Simon are both structurally unemployed.
C) Tom is frictionally unemployed, and Simon is structurally unemployed.
D) Tom is structurally unemployed, and Simon is frictionally unemployed.

E) B) and C)
F) None of the above

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Which of the following best defines the labour force?


A) the number of employed
B) the population minus the number of unemployed
C) the population aged 15or over
D) the number of unemployed plus the number of employed

E) C) and D)
F) A) and D)

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If the minimum wage was currently above the equilibrium wage, what would a decrease in the minimum wage do to the quantity demanded and quantity supplied of labour?


A) It would increase both the quantity demanded and the quantity supplied of labour.
B) It would decrease both the quantity demanded and the quantity supplied of labour.
C) It would increase the quantity of labour demanded and decrease the quantity supplied.
D) It would decrease the quantity of labour demanded and increase the quantity supplied.

E) B) and C)
F) C) and D)

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Mary Sue is the newly appointed CEO of a company that manufactures CD drives on an assembly line. Her staff has told her that the output the firm produces, given the number of workers employed, indicates that some workers may be shirking. According to efficiency wage theory, which of the following should she do?


A) pay all workers more than the equilibrium wage rate
B) pay all workers below the equilibrium wage rate to make up for the loss from shirking
C) make sure that workers are getting paid exactly the equilibrium wage rate
D) reduce production

E) A) and D)
F) A) and C)

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Figure 28-2 Figure 28-2 -Refer to Figure 28-2. If the minimum wage is $5 or $6, what is the number of people unemployed, respectively? A) 40 and 0 B) 20 and 20 C) 40 and 20 D) 0 and 0 -Refer to Figure 28-2. If the minimum wage is $5 or $6, what is the number of people unemployed, respectively?


A) 40 and 0
B) 20 and 20
C) 40 and 20
D) 0 and 0

E) A) and C)
F) A) and D)

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Some people are unemployed because they are searching for a very specific job. How are these people best classified?


A) as cyclically unemployed
B) as structurally unemployed
C) as frictionally unemployed
D) as discouraged workers

E) B) and C)
F) B) and D)

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Government policy can do nothing about the natural rate of unemployment.

A) True
B) False

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Which of the following best defines collective bargaining?


A) It is the process by which the government sets exemptions from the minimum wage law.
B) It is setting the same wage for all employees to prevent jealousy among workers.
C) It is the situation when firms collude to set the wages of employees in order to keep them below equilibrium.
D) It is the process by which unions and firms agree on the terms of employment.

E) B) and D)
F) All of the above

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According to your text, which of the following is not a reason that actual labour markets experience unemployment?


A) unions
B) job search
C) flexible wages
D) minimum-wage legislation

E) A) and B)
F) C) and D)

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In Canada, about what fraction of the time do spells of unemployment end with the person leaving the labour force?


A) 1/5 of the time
B) 1/4 of the time
C) 1/3 of the time
D) 1/2 of the time

E) A) and C)
F) None of the above

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In 2007, how much did the government budget for the EI program?


A) about $5 billion
B) about $10 billion
C) about $12 million
D) about $18 billion

E) A) and B)
F) C) and D)

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How is the unemployment rate computed?


A) as the number of unemployed divided by the labour force times 100
B) as the number of unemployed divided by the number of people employed times 100
C) as the number of unemployed divided by the adult population times 100
D) as the number of unemployed times the participation rate times 100

E) A) and B)
F) A) and C)

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How do sectoral shifts in the economy affect unemployment?


A) They create structural unemployment.
B) They reduce unemployment.
C) They increase unemployment due to job search.
D) Overall, they leave unemployment unchanged.

E) A) and B)
F) C) and D)

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