The town of Villageton has 500 residents, of which 300 are employed, 30 are not working but actively seeking work, 70 are children in school, 40 are retirees, 30 are full-time college students, 20 are institutionalized, and 10 are discouraged workers. Calculate the unemployment rate in Villageton. Suppose 10 of the 30 college students graduate and enter the labor force actively seeking work, but only 5 find a job. How does this change the unemployment rate in Villageton? Is this economy “fully-employed” according to the U.S. definition? Why or why not? How would the “U6” definition of unemployment differ from your answer to question #2a? Would it be higher or lower? Calculate the labor force participation rate (LFPR) using the numbers above.

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Answered: The town of Villageton has 500…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 16RQ: Assess whether the following would be counted as unemployed in the Current Employment Statistics...

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The town of Villageton has 500 residents, of which 300 are employed, 30 are not working but actively seeking work, 70 are children in school, 40 are retirees, 30 are full-time college students, 20 are institutionalized, and 10 are discouraged workers.

Calculate the unemployment rate in Villageton.

Suppose 10 of the 30 college students graduate and enter the labor force actively seeking work, but only 5 find a job. How does this change the unemployment rate in Villageton?

Is this economy “fully-employed” according to the U.S. definition? Why or why not?

How would the “U6” definition of unemployment differ from your answer to question #2a? Would it be higher or lower?

Calculate the labor force participation rate (LFPR) using the numbers above.

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The town of Villageton has 500 residents, of which 300 are employed, 30 are not working but actively
seeking work, 70 are children in school, 40 are retirees, 30 are full-time college students, 20 are
institutionalized, and 10 are discouraged workers.
e. Calculate the labor force participation rate (LFPR) using the numbers above.
3. Suppose that a hypothetical “consumer market basket” consists only of Goods B and C, in the
quantity: B = 10 and C = 6. As in question #1, use 2021 as a base year (i.e., 2021 = 100).

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