Suppose the minimum wage in this economy is $8.70 per hour. An unemployed worker is defined as someone who is willing to work at the prevailingwage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also theprevailing wage.If the wage is not allowed to fall below $8.70 per hour, the size of the unskilled labor force isworkers are considered unemployed.The unemployment rate is defined as the percentage of unemployed workers in the labor force:Unemployment Rate =At a minimum wage of $8.70 per hour, the unemployment rate among unskilled workers is approximatelyUnemployedx 100Labor ForceTrueFalseworkers, andRecall that according to the article, a bill moving through the legislature would allow small businesses in Illinois to collect a tax credit to offset theadditional cost of a higher minimum wage. The previous graph shows an initial tax credit of $0. For simplicity, assume that small businesses are theprimary demanders of unskilled workers, and they would receive a tax credit equating to $1 per hour.True or False: With a minimum wage of $8.70, unemployment of unskilled workers is higher with the tax credit versus without it.unskilled 2. The connection between macroeconomics and microeconomicsWhile economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In otherwords, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy.Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young,inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.WAGE (Dollars per hour)12a.n0400Labor SupplyLabor Demand200600800QUANTITY (Thousands of workers)1000Graph Input ToolLabor MarketWage Rate(Dollars per hour)Labor Demanded(Thousands ofworkers)Surplus Labor(Thousands ofworkers)Labor Demand ShiftersTax Credit(Dollars per hour)$8.7420160Labor Supplied(Thousands ofworkers)560

In a labor market, minimum wage refers to the situation when government sets a specific wage that a…

While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Labor Supply Graph Input Tool. Labor Market Wage Rate (Dollars per hour) $8.7

While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Labor Supply Graph Input Tool. Labor Market Wage Rate (Dollars per hour) $8.7

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 11RQ: If you an? out of school but working part time, are you considered employed or unemployed in U.S....

See similar textbooks

Similar questions

Beginning in the 1970s and continuing for three decades, women entered the U.S. labor force in a big way. If we assume that wages are sticky in a downward direction, but that around 1970 the demand for labor equaled the supply of labor at the current wage rate, what do you imagine happened to the wage rate, employment, and unemployment as a result of increased labor force participation?
If you an? out of school but working part time, are you considered employed or unemployed in U.S. labor statistics? If you are a full time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is collecting social security and a pension and working as a greater at Wal-Mart are you considered employed or not in the labor force?
While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph
Economists use labor-market data to evaluate how well an economy is using its most valuable resource— its people. Two closely watched statistics are the unemployment rate and the employment–population ratio (calculated as the percentage of the adult population that is employed). Explain what happens to each of these in the following scenarios. In your opinion, which statistic is the more meaningful gauge of how well the economy is doing? Situations unemployment rate employment–population ratio More meaningful one a. An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs b. After an unsuccessful search, some of the laid-off workers quit looking for new jobs. c. Numerous students graduate from college but cannot find work. d. Numerous students graduate from college and immediately begin new jobs. e. A stock market boom induces newly enriched 60-year-old workers to take early retirement.…
E1 3. [Employment and Unemployment] Suppose a country has a working-age population of 500people. The demand and supply functions of its labor market are:w=300-0.5L w=60+0.1Lwhere w is the wage, L is the quantity of labor. The labor market has search friction so thatthose that are looking for a job may not immediately find one even when there are openings.Specifically, Assume the number of job matches (i.e. employment) is given by: 0.8L(a) Find the equilibrium wage and the actual number of employed people. Calculate thelabor force participation rate and unemployment rate. (b) The COVID-19 pandemic lowers the labor demand, and the new labor demand becomesw=240-0.5L. Assume that the wage can adjust quickly, find the equilibrium wage and theactual number of employed people during the pandemic. (c) Briefly explain in words, and with a specific example of each, the difference betweenstructural and frictional unemployment.
Economists use labor-market data to evaluate how well an economy is using its most valuable resource—its people. Two closely watched statistics are the unemployment rate and the employment–population ratio (calculated as the percentage of the adult population that is employed). Indicate what happens to the unemployment rate and the employment–population ratio in each of the following scenarios. Scenario Effect On... Unemployment Rate Employment–Population Ratio An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs. After an unsuccessful search, some laid-off workers quit looking for new jobs. Numerous students graduate from college and immediately begin new jobs. Advances in health care prolong the lives of many retirees.
Newly released data shows that the U.S. unemployment rate was 6.2 % in Feb 2021, whereas the Euro area unemployment rate was 8.3%. In fact, the U.S. has almost always (with a few exceptions) had a lower unemployment rate compared to the Euro area. Which is most likely not a reason to explain the above scenario? O The wage in Euro area is too high. Euro firms have shifted from hiring local workers to hiring in countries that have cheaper labor O Higher relative wages for skilled laborers in the US has decreased the unemployment rate Euro area has generous unemployment insurance to guarantee worker benefits, which increases the unemployment rate O U.S. has relatively stronger unions compared to the Euro area, which decreases the unemployment rate
hy does a measure of labor productivity—the output produced per worker– rise for many firms during recessions? During the boom years period of 2005through November 2007, the annual average output per worker was lower in U.S.manufacturing than during the Great Recession of 2007–2009 as well during therelatively low-demand years since then through 2013.Firms produce less output during recessions as demand for their products falls.Consequently, firms typically lay off workers during recessions. Thus, whetheroutput per worker rises or falls depends on whether output or employment fallsby more. The labor productivity pattern over the business cycle differs across in-dustries. If we know about a firm’s production process, can we predict whetheroutput produced per worker will rise or fall with each additional layoff?
Use the graph to answer the question. Unemployment, 1929-1945 21 1930 1935 1940 1945 Year Source: Historical Statstics of the United State Colonial Times to 1970, U.S. Census Bureau, 1975 (adapled) What was the MAIN cause of the trend in employment shown on the graph between 1942 and 1945? O A. the success of the Social Security Act B. a decline in the number of women in the workforce C. the impact of a high inflation rate O D. increased manufacturing to meet the needs of World War II Percent Unemployed
1. Describe how the wage rate and level of employment are determined if the labor market is purely competitive
Economists use labor-market data to evaluate how well an economy is using its most valuable resource—its people. Two closely watched statistics are the unemployment rate and the employment–population ratio (calculated as the percentage of the adult population that is employed). Indicate what happens to the unemployment rate and the employment–population ratio in each of the following scenarios. Scenario Effect On... UNEMPLOYMENT RATE EMPLOYMENT POPULATION RATION Many previously laid-off workers find jobs in new startup firms as the economy expands. (DECREASE, INCREASE OR STAY THE SAME) (DECREASE, INCREASE OR STAY THE SAME) After an unsuccessful search, some laid-off workers decide to go back to school as full-time students. (DECREASE, INCREASE OR STAY THE SAME) (DECREASE, INCREASE OR STAY THE SAME) As a result of an economic boom, many students drop out of school and start working as soon as they become adults. (DECREASE,…
What happens in the labor market when the following event occurs? Suppose that the number of jobs in the fishing industry decreases but the number of Jobs in the travel industry increases. Initially, O A. there is a shortage of workers in both sectors B. the unemployment rate does not change O C. cyclical unemployment increases O D. structural unemployment increases