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Informal work at home (e.g., preparing meals, taking care of children) is not counted as part of GDP. Such work also does not constitute employment in labor-market statistics. With these observations in mind, consider two economies, each with 100 people, divided into 25 households each composed of four people. In each household, one person stays at home and prepares the food, two people work in the nonfood sector, and one person is unemployed. Assume that the workers outside food preparation produce the same actual and measured output in both economies. In the first economy, Eatin, the 25 food-preparation workers (one per household) cook for their families and do not work outside the home. All meals are prepared and eaten at home. The 25 food-preparation workers in this economy do not seek work in the formal labor market (and when asked, they say they are not looking for work). In the second economy, EatOut, the 25 food-preparation workers are employed by restaurants. All meals are purchased in restaurants. Fill in the table for each country. In Employment Unemployment Labor force Unemployment rate Participation rate measured GDP is higher. Eatin % % EatOut % %

Informal work at home (e.g., preparing meals, taking care of children) is not counted as part of GDP. Such work also does not constitute employment in labor-market statistics. With these observations in mind, consider two economies, each with 100 people, divided into 25 households each composed of four people. In each household, one person stays at home and prepares the food, two people work in the nonfood sector, and one person is unemployed. Assume that the workers outside food preparation produce the same actual and measured output in both economies. In the first economy, Eatin, the 25 food-preparation workers (one per household) cook for their families and do not work outside the home. All meals are prepared and eaten at home. The 25 food-preparation workers in this economy do not seek work in the formal labor market (and when asked, they say they are not looking for work). In the second economy, EatOut, the 25 food-preparation workers are employed by restaurants. All meals are purchased in restaurants. Fill in the table for each country. In Employment Unemployment Labor force Unemployment rate Participation rate measured GDP is higher. Eatin % % EatOut % %

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Informal work at home (e.g., preparing meals, taking care of children) is not counted as part of GDP. Such work also does not constitute employment in labor-market statistics. With these observations in mind, consider two economies, each with 100 people, divided into 25 households each composed of four people. In each household, one person stays at home and prepares the food, two people work in the nonfood sector, and one person is unemployed. Assume that the workers outside food preparation produce the same actual and measured output in both economies. In the first economy, Eatin, the 25 food-preparation workers (one per household) cook for their families and do not work outside the home. All meals are prepared and eaten at home. The 25 food-preparation workers in this economy do not seek work in the formal labor market (and when asked, they say they are not looking for work). In the second economy, EatOut, the 25 food-preparation workers are employed by restaurants. All meals are purchased in restaurants. Fill in the table for each country. In Employment Unemployment Labor force Unemployment rate Participation rate , measured GDP is higher. Eatin % % EatOut % %
Transcribed Image Text:Informal work at home (e.g., preparing meals, taking care of children) is not counted as part of GDP. Such work also does not constitute employment in labor-market statistics. With these observations in mind, consider two economies, each with 100 people, divided into 25 households each composed of four people. In each household, one person stays at home and prepares the food, two people work in the nonfood sector, and one person is unemployed. Assume that the workers outside food preparation produce the same actual and measured output in both economies. In the first economy, Eatin, the 25 food-preparation workers (one per household) cook for their families and do not work outside the home. All meals are prepared and eaten at home. The 25 food-preparation workers in this economy do not seek work in the formal labor market (and when asked, they say they are not looking for work). In the second economy, EatOut, the 25 food-preparation workers are employed by restaurants. All meals are purchased in restaurants. Fill in the table for each country. In Employment Unemployment Labor force Unemployment rate Participation rate , measured GDP is higher. Eatin % % EatOut % %
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