Chapter 12, Problem 2FRQ

a)

To determine

The labor market classification of a given individual.

Explanation of Solution

A person who is currently working and not actively looking for another job is considered employed. Here, Julie would be considered underemployed as she is overqualified for her current job.

Economics Concept Introduction

The people are considered employed who are already working and getting some compensation for their working hours, while the people are considered unemployed who are not working now, but actively looking for a job.

  $\text{Labor force = Employed people + Unemployed people}$

b)

To determine

The labor market classification of a given individual.

Explanation of Solution

A person who is not actively looking for a job for the last 4 weeks chooses is not considered unemployed. Here, Jeff would be considered discouraged worker as he gave up looking for a job due to the non-availability of jobs in the market.

c)

To determine

The labor market classification of a given individual.

Explanation of Solution

Ian is counted as employed as he is working in a part-time profile and he is not willing to get another job.

d)

To determine

The labor market classification of a given individual.

Explanation of Solution

A person who chooses not to work for a year is not considered unemployed. So, Raj would not be counted in the labor force, as he is neither currently working nor he is looking for another job.