Question

Please answer questions 9 and 10 and please answer each sub section in the question and thank you so much.

9. (1 point) State which type of unemployment (cyclical, structural, or frictional) the following scenarios illustrate. a. Local firms want to hire people with master's degrees, but local people in the labor force only have high school diplomas. b. Due to a recession, a number of workers are laid off from a local factory. c. Young job seekers in the local labor market are unable to discern which firms are hiring and which firms are not. 10. (1 point) A number of unemployed people suddenly relocate from Omaha, NE to Lincoln, NE. a. What is likely to happen to the unemployment rate in Omaha? b. What is likely to happen to the unemployment rate in Lincoln?

Answer 1

Question 9

(a)

In the given case, unemployment is due to the mismatch between skills and educational qualifications required for the job and the skills and educational qualifications actually possessed by the labor force.

When unemployment exist due to such mismatch of skill and educational requirement then such unemployment is termed as structural unemployment.

So, the given scenario illustrates structural unemployment.

(b)

In the given case, jobs are lost due to downturn in the economy.

Unemployment that arises due to downturn in the economy or recession in the economy is termed as cyclical unemployment.

So, the given scenario illustrates cyclical unemployment.

(c)

In the given case, unemployment exist due to lack of perfect information with respect to job vacancies.

When there is unemployment due to asymmetry of information that prevents unemployed from connecting with firms that are hiring then such unemployment is termed as frictional unemployment.

So, the given scenario illustrates frictional unemployment.