Question

While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Labor Market 15 Labor Supply $11.7 12 220 780 Wage Rate (Dolars per hour) Labor Demanded (Thousands of workers) Surplus Labor (Thousands of workers) Labor Supplied (Thousands of workers) GE (Dolars per hour) 580 abor Damand Shifters

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Answer 1

Question 1:

780,000; 560,000
(Labor force = labor supply = 780,000; unemployed = surplus labor = 560,000)

71.79%
(Unemployment rate = (560,000/780,000)*100 = 71.79%)

False
(With tax credit, unemployment will be lower.)

(Note: As HOMEWORKLIB's policy, one question is to be answered at a time.)