Macro-Econ Quiz 2
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This 7 page Class Notes was uploaded by jcsumlin on Friday September 2, 2016. The Class Notes belongs to ECON 2030 - 2 at Auburn University taught by Diana Alessandrini in Fall 2016. Since its upload, it has received 38 views.
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Date Created: 09/02/16
9/2/2016 QUIZ 2: ECON20302 Fall 2016 QUIZ 2 Due Sep 2 at 6pm Points 100 Questions 9 Available Aug 29 at 12am Sep 2 at 6pm 5 days Time Limit None Instructions GRAPHS: The quiz includes two figures. You may not be able to see the figures if you use Safari. Firefox should not give you problems. In any case, if the graphs do not display properly on your computer, click here. INSTRUCTIONS: I suggest you to work on the offline version of the quiz first (Modules/Quizzes/Quiz2.pdf). Once you have your answers, start the quiz online. Only one attempt is allowed. Once you start the quiz, you must complete it. Attempt History Attempt Time Score LATEST Attempt 1 17 minutes 90 out of 100 * * Some questions not yet graded Correct answers will be available on Sep 2 at 6:05pm. Score for this qui90 out of 100 * Submitted Sep 2 at 4:03pm This attempt took 17 minutes. Question 1 15 / 15 pts Suppose you have been hired as an economist by the Bureau of Labor Statistics and you need to calculate some labor market statistics (unemployment rate, participation rate, etc.) for a small town. On your first day at work you interview 7 persons (aged 16 years and older) living in this small town. Assume that nobody else lives in this town. The following table shows the answers given by each person interviewed. Classify each person using the following categories: unemployed, employed or out of the labor force Now that the kids are in school for a Unemployed full day, Sarah is looking for work and has interviewed for three jobs during the past two weeks. Kevin has been recently laid off from Unemployed a job and he is currently sending resumes to other employers in the area. https://auburn.instructure.com/courses/982063/quizzes/1424710 1/7 9/2/2016 QUIZ 2: ECON20302 Fall 2016 Pat has just graduated from college and started a new job last week. Employed Mary was laid off last year when new Out of labor force equipment was installed at the plant, reducing the number of workers needed. Shortly after being laid off, she looked for a new job, was unable to find one and then stopped looking. Johnnie works as a cashier in the local grocery store but is currently Employed absent from work for illness Sharon is a doctor and works in the local hospital. Employed Mark is currently retired and is not working. Out of labor force Question 2 15 / 15 pts Based on the answers given by the people you interviewed, complete the following sentences. The number of unemployed workers in this town is 2 . The labor force consists of 5 individuals. The participation rate is approximately 71 %. The unemployment rate is 40 %. Answer 1: 2 Answer 2: 5 Answer 3: 71 Answer 4: https://auburn.instructure.com/courses/982063/quizzes/1424710 2/7 9/2/2016 QUIZ 2: ECON20302 Fall 2016 40 10 / 10 pts Question 3 The following table reports production data for a bicycle factory. Number of workers Bikes assembled per day 1 10 2 18 3 24 4 28 5 30 When answering the following questions, assume that the price of a bike is $80. If the wage is $300 per day, how many workers should this factory hire? 4 . If the wage is $400 per day, how many workers should this factory hire? 3 Answer 1: 4 Answer 2: 3 10 / 10 pts Question 4 Figure 1 https://auburn.instructure.com/courses/982063/quizzes/1424710 3/7 9/2/2016 QUIZ 2: ECON20302 Fall 2016 Figure 1 shows the labor demand curve, LD1, and labor supply curve, LS1, in a market. A month later, the labor demand curve shifts to LD2. If there is downward wage rigidity in the market, how much unemployment is created when the labor demand curve shifts to LD2? 5 10 20 25 30 10 / 10 pts Question 5 The following table shows answers given by people interviewed by the Bureau of Labor Statistics. Classify each scenario. In the 1990s, video recordings were Structural unemployment made primarily on tapes. However, in the 2000s DVDs became increasingly popular, leading to a sharp decline in video tapes. As a result, many people who manufactured tapes lost their jobs and didn't have the skills necessary to work making DVDs. This occurrence is best considered an example of https://auburn.instructure.com/courses/982063/quizzes/1424710 4/7 9/2/2016 QUIZ 2: ECON20302 Fall 2016 As a result of her spouse being Frictional unemployment transferred to a job in a new city, Gwen is looking for a new job. This occurrence is best considered an example of Ted has been laid off because of the Cyclical unemployment recent recession and is still looking for a new job. This occurrence is best considered an example of 10 / 10 pts Question 6 When economists talk about "full employment", they refer to a situation in which________. A) the unemployment rate is zero B) there is no frictional unemployment C) the unemployment rate equals the natural unemployment rate D) there is no structural unemployment E) there is no cyclical unemployment Only A is correct Only C is correct A and C are both correct B and D are both correct C and E are both correct Question 7 10 / 10 pts Martha stopped looking for a job because she is convinced that she cannot find one. The Bureau of Labor Statistics would classify her as a discouraged worker. . She would not be counted as unemployed. Answer 1: a discouraged worker. Answer 2: https://auburn.instructure.com/courses/982063/quizzes/1424710 5/7 9/2/2016 QUIZ 2: ECON20302 Fall 2016 would not 10 / 10 pts Question 8 Figure 2 Figure 2 shows the unemployment rate (blue solid line) and the employmenttopopulation ratio (dashed red line) for the U.S. economy in recent years. As you can see from the graph, between 2009 and 2013, the unemployment rate declined but at the same time the employmenttopopulation ratio remained fairly stable. In other words, the number of unemployed workers went down but the number of employed workers remained constant. This fact can be explained by an increase in discouraged workers, all else equal a decrease in the working age population, all else equal a decrease in the labor force, all else equal Not yet graded / 10 pts Question 9 Read pages 111112 in the textbook ("Other definitions of unemployment" and "Alternative measures of unemployment") before answering the following question. Go to the website of the Bureau of Labor Statistics and click on “Data tools”. Locate the section “Unemployment” and under “Labor Force Statistics including the National Unemployment Rate (Current Population Survey CPS)” click on “Top Picks”. Then, select “Unemployment Rate LNS14000000” and "Alternative measure of labor underutilization U6 LNS13327709". Click "retrieve the data". Select “include graphs” (at the top of the page) and select years from 1994 to 2016. Then click go. The graphs show two measures of unemployment: U1 (the official rate) and U6. https://auburn.instructure.com/courses/982063/quizzes/1424710 6/7 9/2/2016 QUIZ 2: ECON20302 Fall 2016 a) Report both unemployment rates for the most recent month. b) Discuss the differences between these two measures of unemployment. c) Which measure do you think is more accurate? Your Answer: U1 Aug 2016 4.9% U6 Aug 2016 9.7% The U1 Measurement analyses the unemployment of everyone 16 y/o + who has been unemployed for more 15 weeks. The U6 measures people who are working part time but want full time jobs. I think the U1 measurement is more reliable and more representative of our unemployment rate because the U6 measurement measures people who actually have a job but want more hours basically. So they are technically employed which is more than the U1 people. Quiz Score: 90 out of 100 https://auburn.instructure.com/courses/982063/quizzes/1424710 7/7
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