Exercise 1: Labor Force
Indicate whether the following people are employed, unemployed, or out of the labor force. If they are unemployed indicate whether their unempl oyment is structural, cyclical, frictional, or seasonal if possible.
a) A full-time student who does not work
b) An auto assembly-line worker who was laid -off when his plant was closed for production changes and has not been looking for work.
c) A stay-at-home mother
d) A retired aero-space engineer th at bags groceries part time
e) Katie looses her life guarding j ob at the end of the summer, just before returning to school
f) After a tariff on steel is repealed, American steel manufacturers lay-off some workers
g) Due to generally decreasing retail sale s, many retail workers loose their jobs
h) John leaves his position at Mc Donalds to look for a new job
i) Mary is working a part time job while she looks for a permanent position
Exercise 2: Unemployment
The following is employment information about the country Badger Land.
Entire Population 800
People under the age of 16 75
Retired people 200
Number of people with full time job 250
Number of people with part time job 175
Number of people without a job but looking for one 75
Number of people without a job and not looking for one 25
a. What is the unemployment rate of Badger Land?
b. What is the labor force partic ipation rate in Badger Land?
Exercise 3: Price Indexes
In Fast Foodland the market basket of goods is 2 hotdogs and 1 cheeseburger. Fill in the table below, using 2007 as the base year
Exercise 4 : Inflation Using the information above, calculate the rate of change in prices of hotdogs and cheeseburgers , the inflation rate, and the gr owth rate of nominal and real GDP from 2005 to 2006 and 2006 to 2007. Is there anything that is counter intuitive?
Exercise 5 : Real versus Nominal Variables Fill in the table below.
Year CPI Nominal Wage Real Wage
1980 100 $6/hour --
1990 -- $10/hour $8/hour
2000 150 -- $7/hour
Exercise 6 : Use the information above to calculate th e CPI in 2000 with 1990 as the base year.