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Delaware Tech ECO 111 - Chapter 9 Review Questions and Problems and Applications

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ECO chapter 9 Review questions and problems and applications1) This new norm would cause the labor force participation rate to increase because the labor force participation rate is the proportion of adults that are working or looking for work, it will cause the unemployment rate to likely be unchanged because an increase in the number of women in the workforce tends to lead to an increase in the equilibrium number of jobs.2) A retire person, a disable person, an elderly person who lives in a nursing home, a student with no job, a stay home spouse.3) One reason why the country with more unemployment insurance may have a higher equilibrium unemployment rate is that workers in the country with unlimited unemployment insurance have less incentive to search diligently for work.4) You can advise the president that the target unemployment rate should be the natural rate of unemployment, not below it.5) The government shouldn’t limit how often new products are introduced. Technologicalchanges will always result in winners and losers, so helping those workers who are displaced because of the new product is a normative issue.6) 7) As a recession drags on for an extended period the labor force participation rate will fall. Workers who have been cyclically unemployed for a long period of time begin to seetheir skills deteriorate and may move from cyclically unemployed to structurally unemployed.8) As a country begins to recover from a deep recession the labor force participation rate will rise, cyclical unemployment will fall9) It may be rational for a firm to offer wages above the minimum wage because paying higher wages is likely to attract higher quality workers, who will be more productive and there will likely be less turnover.10) These laws would cause cyclical unemployment to fall, but frictional and structural unemployment will rise because it’s riskier to hired workers.Problems and applications1) a. Alexander is self-employed; therefore, he’s counted as employedb. He is counted as unemployed because he’s looking for work. c. He’s counted as not in labor force because he’s not working anymore. d. He’s counted as unemployed because he’s seeking for work again. e. He’s counted as employed because he started worked.2) a) Unemployment rate = unemployed people/Labor force*100 = 10,000/60,000*100 = 16.67% b) Labor-force participation rate = Labor force/working age population*100 = 60,000/100,000*100 = 60%3) I need a feedback for #3 please.Country Working-age populationLabor forceEmployed UnemployedUnemployment rate (%)Labor-force participation rate (%)Japan 110,849 66,620 64,460 2,160 3.2 60.1France 31,164 3,520 11.3 56.1Germany 76,066 46,096 5.7 60.64) a. Unemployment will stay the same. b. There will be a surplus of 1 unit of labor in the labor market. 5) 30-w=0.5 Equilibrium wage 20 Labor employed 10 If supply of workers increased the number of unemployed would stay the same if the wage is free to quickly


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