ECON 104 11th Edition Lecture 7 Outline of Last Lecture I Production Process a Organization of the Production Process II Labor III Capital IV Increasing Output V Division of Labor VI Diminishing Marginal Theory Outline of Current Lecture II Unemployment a How does unemployment impact people III Unemployment Rate IV Labor Force a Discouraged Workers b Underemployed V Production Possibilities Curve VI Long Term Unemployment a Full Employment b 4 Ways to Define Unemployment i Seasonal ii Frictional iii Structural iv Cyclical Current Lecture 1 Unemployment Rate The percentage of people who don t have jobs a Unemployed Labor Force 2 Labor Force Everyone over the ages of 16 who work or are actively looking for a job a People who AREN T a part of the Labor Force i Stay at Home Parents ii People under 16 iii Retired People iv People who have given up on looking for a job b Part Time Employment is problematic for calculating the unemployment rate c The Labor Force is about half of the American population roughly These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute 3 Discouraged Workers People who look for work but can t find it 4 Underemployed People who work at jobs that they are over qualified for EX Neurosurgeon flipping burgers at McDonalds 5 Production Possibilities Curve These Images were taken from Goggle a The issue isn t pushing the Production Possibility Frontier out but getting to the Production Possibility Frontier b We will NEVER have 0 unemployment 6 In Macroeconomics when unemployment increases a Decline of GDP Growth b Loss of Output c Loss of Income 7 Long Term Unemployment has a devastating impact on the individual and their family 8 4 Ways to Define Unemployment a Seasonal Ex Agricultural Lifeguard Etc b Frictional Leaving one job for another In between jobs Just entering the job Labor Force Qualifiers of Frictional i Assume that there s enough jobs for you to do ii Have the required skill set iii Job search will be short c Structural Caused by 1 Missed matched of jobs available and 2 The skill set of workers or Locations of jobs vs Location of workers d Cyclical Unemployment as a result of a downturn in the economy i Requires an injection of income to spark up employment e Full Employment Structural and Cyclical Unemployment are near 0 i An everlasting goal due to the devastating impact of unemployment on families