Question

Which of the following statements is (are) correct?

(x)Minimum wage laws that raise the raise the minimum wage above the equilibrium wage in the unskilled labor market contribute to the natural rate of unemployment.

(y)Minimum wages create unemployment in markets where they create a surplusof labor. Unemployment of this type is called structural.

(z)If some wages are forced above the equilibrium level and they are not able to return to equilibrium, then the economy experiences an increase in structural unemployment and an elevation of the natural rate of unemployment.

A.(x), (y) and (z)

B. (x) and (y) only

C.(x) and (z) only

D.(y) and (z) only

E.(z) only

.Frictional unemployment is inevitable because

A. there is a federal minimum-wage law in the U.S.

B. some people do not want to be employed.

C. sectoral shifts are always happening.

D. unions are very popular in the U.S.

E. Both A and B.

9.Which of the following statements about unions is (are) correct?

(x)Right-to-work laws give workers in a unionized firm the right to choose whether or not to join the union. Such laws tend to diminish the bargaining power of unions.

(y)If a union bargains successfully with an employer and increases the wage paid to workers, then this action usually decreases the quantity of labor supplied and increases the quantity of labor demanded.

(z)When a union bargains successfully with an employer, in that industry unemployment increases and wages rise

A.(x), (y) and (z)

B. (x) and (y) only

C.(x) and (z) only

D.(y) and (z) only

E.(x) only

Answer 1

7. B

8. C frictional unemployment is inevitable because economy is always changing.

9. C Right-to-work laws give workers in a unionized firm the right to choose whether or not to join the union. Such laws tend to diminish the bargaining power of unions and when a union bargains successfully with an employer, in that industry unemployment increases and wages rise