Question 1 Chapter 15 Measuring employment, unemployment, and labor force participation
Consider a small economy composed of six people: Felix, Janet, Lar
... [Show More] ry, Megan, Susan, and Raphael. Each
person's employment status is described 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
Felix is a 75-year-old professor. He teaches only one or two courses
a year, but he's still pursuing an active research agenda.
Janet is a 25-year-old recent college graduate. She did not work for
pay last week, but she had two job interviews.
Larry is a 39-year-old graphic designer who is taking 2 years off
from work to care for his small daughter.
Susan is a 26-year-old who lost her job as a copy editor for a local
newspaper. She has spent the past few weeks out of work and
interviewing for other editing jobs. She is thinking about going back
to grad school if her job search doesn't succeed after a few more
weeks.
Raphael is a 17-year-old who just graduated from high school. He is
taking it easy this summer, relaxing by the pool with his friends
and family, and volunteering part-time at the local nursing home.
Megan is a 10-year-old student at East Valley Middle School. She
baby-sits her younger brother and does other chores for which her
parents give her an allowance of $20 per week.
Points: 1 / 1
Explanation: Close Explanation
The BLS considers a person to be unemployed if he or she is in the adult population, did not work for
pay in the previous week, and has actively looked for work during the preceding 4 weeks. By this
definition, the BLS classifies Janet and Susan as unemployed.
Anyone in the adult population who worked for pay in the last week, even if unsatisfied with his or her
Employed
Unemployed
Not in the labor force
Unemployed
Not in the labor force
Not in the adult population
Complete the right half of the following equation to reflect the labor force participation rate reported by the
BLS.
Points: 1 / 1
According to this formula, what is the labor force participation rate of this economy of six people?
20%
60%
66.67%
200%
Points: 1 / 1
Explanation: Close Explanation
The BLS defines the labor force participation rate as the fraction of the adult population that is in the
labor force—that is, those who are employed or else unemployed and actively searching for work.
By this definition, Felix, Janet, and Susan are part of the labor force because they are either working or
searching for a job. In contrast, because Larry and Raphael are not actively seeking employment, they
are not considered part of the labor force. And because Megan is under the age of 16, she is not
considered part of the adult population, and, therefore, she is also not part of the labor force.
Because the adult population in this small economy is five people, and because three of them are in
the labor force, the labor force participation rate is .
job, is considered employed. By this definition, the BLS classifies Felix as employed.
Because Larry and Raphael are not actively seeking employment, they are not considered part of the
labor force. Note that not being in the labor force is different from being unemployed. Once people
leave the labor force, they are not counted when calculating the unemployment rate.
Because Megan is under the age of 16, she is not considered part of the adult population.
Complete the right half of the following equation to reflect the unemployment rate reported by the BLS.
Points: 1 / 1
According to this formula, what is the unemployment rate of this economy of six people?
20%
60%
66.67%
200%
Points: 1 / 1
Explanation: Close Explanation
The BLS defines the unemployment rate as the fraction of the labor force that is unemployed.
Felix, Janet, and Susan are part of the labor force because they are either working or searching for a
job.
The BLS considers a person to be unemployed if he or she is in the adult population, did not work for
pay in the previous week, and has been actively seeking work during the preceding 4 weeks. By this
definition, the BLS classifies Janet and Susan as unemployed.
Since the size of the labor force in this small economy is three people, and since two of them are
unemployed, the unemployment rate is computed as follows. [Show Less]
