Question

Consider the following employment numbers. The number of people currently unemployed in Tiny Town is 400. The current unemployment rate in Tiny Town is 25%. How many people are currently employed?

a) 400 b) 1600 c) 1200 d) cannot be determined

Consider the following employment numbers. The number of people currently employed in Tiny Town is 11,700. The current unemployment rate in Tiny Town is 10%. How many people are currently unemployed?

a)cannot be determined b)1100 c)1300 d)900

Answer 1

Formulas :

i) Unemployment rate(u) = (U/L)*100 where U = number of unemployed and L = labor force

ii) Employment rate(e) = (E/L)*100 where E = number of employed and L = labor force

iii) e + u = 100 and U + E = L

1)

It is given that u = 25 and U = 400 => L = 1600

Thus U + E = L => E = L - U = 1600 - 400 = 1200

Thus, number of employed = 1600 - 400 = 1200

Hence, the correct answer is (c) 1200

2)

It is given that E = 11700, u = 10 => e = 100 - u = 100 - 10 = 90

So, From Formua (ii) we get :

90 = (11700/L)*100 => L = 13000

So, U = L - E = 13000 - 11700 = 1300

Hence, the correct answer is (c) 1300.