ECO 201 FINAL EXAM 2025/2026
QUESTIONS AND ANSWERS 100% PASS.
A firm might offer efficiency wages in order to attract a better pool of applicants. - ANS True
A firm might offer efficiency wages in order to reduce shirking. - ANS True
A union is a type of cartel. - ANS True
According to the efficiency of wages theory, it may be profitable for firms to keep wages high
even in the presence of a surplus of labor. - ANS True
An economist claims that changes in information technology and unemployment insurance have
reduced unemployment. Which of these changes affect frictional unemployment? - ANS Both
the changes in information technology and unemployment insurance
An increase in the minimum wage above the equilibrium wage - ANS increases structural
unemployment.
Cyclical unemployment refers to - ANS short-run fluctuations around the natural rate of
unemployment.
Efficiency wages - ANS increase productivity but increase unemployment.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Evidence from research studies by economists - ANS shows that increased unemployment
benefits decrease the job search efforts of the unemployed.
Refer to Figure 28-1. If the government imposes a minimum wage of $8, then how many
workers will be unemployed? - ANS 4,000
Frictional unemployment is inevitable because - ANS sectoral shifts are always happening.
Frictional unemployment is often a result of changes in the demand for labor among firms. -
ANS True
Frictional unemployment is thought to explain relatively - ANS short spells of unemployment,
while structural unemployment is thought to explain relatively long spells of unemployment.
Gwen is an unpaid worker in her family's restaurant. The Bureau of Labor Statistics counts Gwen
as - ANS employed and in the labor force.
If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7
percent, then by definition there is - ANS cyclical unemployment amounting to 0.5 percent of
the labor force.
If the number of people unemployed rose but the number of people employed and the adult
population stayed the same, then the labor force participation rate would rise. - ANS True
In 2018 the Bureau of Labor Statistics reported that there were 57.4 million people over age 25
whose highest level of education was some college or an associate degree. Of these, 36.3
million were employed and 1.2 million were unemployed. What were the labor-force
participation rate and the unemployment rate for this group? - ANS 65.3% and 3.2%
It is best to view the official unemployment rate as a useful but imperfect measure of
joblessness. - ANS True
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
QUESTIONS AND ANSWERS 100% PASS.
A firm might offer efficiency wages in order to attract a better pool of applicants. - ANS True
A firm might offer efficiency wages in order to reduce shirking. - ANS True
A union is a type of cartel. - ANS True
According to the efficiency of wages theory, it may be profitable for firms to keep wages high
even in the presence of a surplus of labor. - ANS True
An economist claims that changes in information technology and unemployment insurance have
reduced unemployment. Which of these changes affect frictional unemployment? - ANS Both
the changes in information technology and unemployment insurance
An increase in the minimum wage above the equilibrium wage - ANS increases structural
unemployment.
Cyclical unemployment refers to - ANS short-run fluctuations around the natural rate of
unemployment.
Efficiency wages - ANS increase productivity but increase unemployment.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Evidence from research studies by economists - ANS shows that increased unemployment
benefits decrease the job search efforts of the unemployed.
Refer to Figure 28-1. If the government imposes a minimum wage of $8, then how many
workers will be unemployed? - ANS 4,000
Frictional unemployment is inevitable because - ANS sectoral shifts are always happening.
Frictional unemployment is often a result of changes in the demand for labor among firms. -
ANS True
Frictional unemployment is thought to explain relatively - ANS short spells of unemployment,
while structural unemployment is thought to explain relatively long spells of unemployment.
Gwen is an unpaid worker in her family's restaurant. The Bureau of Labor Statistics counts Gwen
as - ANS employed and in the labor force.
If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7
percent, then by definition there is - ANS cyclical unemployment amounting to 0.5 percent of
the labor force.
If the number of people unemployed rose but the number of people employed and the adult
population stayed the same, then the labor force participation rate would rise. - ANS True
In 2018 the Bureau of Labor Statistics reported that there were 57.4 million people over age 25
whose highest level of education was some college or an associate degree. Of these, 36.3
million were employed and 1.2 million were unemployed. What were the labor-force
participation rate and the unemployment rate for this group? - ANS 65.3% and 3.2%
It is best to view the official unemployment rate as a useful but imperfect measure of
joblessness. - ANS True
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
