Multiple Choice Questions
1. The population of Ectenia is 100 people: 40 work fulltime, 20 work half-time but would prefer to work fulltime, 10 are looking for a job, 10 would like to work but are so discouraged they have given up looking, 10 are not interested in working because they are fulltime students, and 10 are retired. What is the number of unemployed?
a. 10
b. 20
c. 30
d. 40
2. Using the numbers in the preceding question, what is the size of Ectenia's labor force?
a. 50
b. 60
c. 70
d. 80
3. The main policy goal of the unemployment insurance system is to reduce the
a. Search effort of the unemployed.
b. Income uncertainty that workers face.
c. Role of unions in wage setting.
d. Amount of frictional unemployment.
4. According to the most recent data, among workers who are paid at an hourly rate, about _________ percent have jobs that pay at or below the minimum wage.
a. 2
b. 5
c. 15
d. 40
5. Unionized workers are paid about _________ percent more than similar nonunion workers.
a. 2
b. 5
c. 15
d. 40
6. According to the theory of efficiency wages,
a. Firms may find it profitable to pay above equilibrium wages.
b. An excess supply of labor puts downward pressure on wages.
c. Sect oral shifts are the main source of frictional un-employment.
d. Right-to-work laws reduce the bargaining power of unions.