1.

Measuring employment, unemployment, and labor force participation

Consider a tiny hypothetical economy composed entirely of the following people: Gilberto, Juanita, Lorenzo, Neha, Teresa, and Sam. Each person's employment status is given in the following table.

Based on the criteria used by the Bureau of Labor Statistics (BLS), identify each person's status as employed, unemployed, "not in the labor force" (if not in the civilian labor force but still part of the adult population), or "not in the adult population" if not in the civilian adult population.

Person Status Gilberto is a 71-year-old professor. He teaches only one or two courses a year, but still Employed V publishes research at a productive rate. Juanita is a 38-year-old steelworker who was just laid off by her employer V . She is trying to find any kind ofjob to help make ends meet. Lorenzo is a 81-year-old retired professor. He enjoys volunteering at the local public '7 library. Teresa is a 31-year-old science teacher who taught at River Rock Middle School last year. V Due to budget cuts, she was laid off at the end of the school year. It's the summer now, and after a few weeks of vacation with her family, she is looking for a part-time job as a tutor. Sam is a 20-year-old American Studies major at the University of Alabama. It's summer '7 now, and he is working as a lifeguard in Memphis, Tennessee. Neha is a 13-year-old student at River Rock Middle School. She babysits her younger Y cousin and does other chores, so her parents give her an allowance of $25 per week. Complete the right half of the following equation to reflect the labor force participation rate reported by the BLS. Labor Force Participation Rate = 100 X Number in Labor Force Number of Employed Workers According to this formula, what is the s economy of six people? 100 x Number in Labor Force Adult Population O 40% 100 x Number of Unemployed Workers Labor Force O 50% Number of Employed Workers 100 X Adult Population O 80% O 100%According to this formula, what is the labor force participation rate of this economy of six people? O 40% O 50% O 80% O 100% Complete the right half of the following equation to reflect the unemployment rate reported by the BLS. Unemployment Rate =According to this formula, what is the unemployment rate of this economy of six people? 0 40% O 50% O 80% O 100% 2. Discouraged workers Which of the following statements correctly describe discouraged workers? (If none of the choices apply, leave all of the checkboxes blank.) Check all that apply. C] They are full-time workers who would like to work only part-time. C] They are counted as part of the labor force by the Bureau of Labor Statistics. C] They have given up on looking for a job. C] They are employed workers who want to earn higher wages. The following table contains U.S. employment information from August 2019. Civilian Population Employed Unemployed Discouraged (Persons 16 years old and over) (Persons) (Persons) (Persons) 259,432,000 157,878,000 5,044,000 457,000 The Bureau of Labor Statistics has several measures of joblessness in addition to the official unemployment rate. One alternative is the U-4 measure of labor underutilization, which is calculated as follows: U-4 = 100 X Unemployed+Discouraged Labor Force + Discouraged Fill in the following table by calculating the official unemployment rate and the U-4 measure of labor underutilization. Official Unemployment Rate U-4 Measure of Labor Underutilization (Percent) (Percent) The official unemployment rate and the U-4 measure of labor underutilization are two different measures of joblessness in the economy. Excluding discouraged workers from the official unemployment rate may cause the official rate to the true extent of underemployment.The three people described in the following table are categorized as unemployed by the Bureau of Labor Statistics. Identify each person in the table as structurally, frictionally, or cyclically unemployed. Unemployment Type Structural Frictional Cyclical Maria is a real estate agent. House sales in her area have declined because the region has been going 0 O 0 through a recession. She has no clients and is currently looking for a new full-time job. Hilary is a physician who has decided to relocate to California to be closer to her family. She is currently 0 O O interviewing with several prestigious hospitals in the San Diego area. Edison recently lost his job as a delivery driver. Minimum-wage legislation keeps employers from adding 0 O 0 more of the low-skill positions for which he qualifies, so he has been unable to find work. The following table presents data on frictional, cyclical, structural, and total unemployment for an economy. The following table presents data on frictional, cyclical, structural, and total unemployment for an economy. Rate Unemployment Type (Percent) Frictional 3.6 Cyclical 0.0 Structural 1.1 Total unemployment 4.7 True or False: This economy is currently at its natural rate of unemployment. 0 True 0 False Consider the labor market defined by the supply and demand curves plotted on the Following graph. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. WAGE (Dollars per hour) 24 21 1B 15 12 Suppl Dd + + I I 0 150 300 450 600 750 900 10501200 LABOR (Thousands of workers) Graph Input Tool Market for Labor I] Wage (Dollars per hour) La bor Demanded (Thousands of workers) 3.00 1 ,050 Labor Supplied (Thousands of workers) 150 Complete the following table with the quantity oflabor supplied and demanded if the wage is set at $9. 00. Then indicate whether this wage will result in a shortage or a surplus. Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 For 100,000 workers. Labor Demanded Labor Supplied Wage (Thousands of workers) (Thousands of workers) Shortage or Surplus? :l E _.. Suppose the federal government contemplates a new law that would create a national minimum wage of $9.00 per hour. Which of the following statements are true? Check all that apply. Cl Binding minimum wages cause frictional unemployment. C] In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium. C] In this labor market, a minimum wage of $9.00 is binding. C] If the minimum wage is set at $12.50, the market will not reach equilibrium