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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ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

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Chapter1: Making Economics Decisions

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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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