Question

Consider a small economy composed of six people: Larry, Megan, Raphael, Susan, Becky, and Alex. Each person's employment status is described in the following table.

Based on the criteria used by the Bureau of Labor Statistics (BLS), identify each person’s status as employed, unemployed, “not in the labor force” (if not in the civilian labor force but still part of the adult population), or “not in the adult population” if not in the civilian adult population.

Person	Status
Larry is a 44-year-old autoworker who was laid off from his job 6 months ago. He is frustrated with his inability to find a new full-time position. Last week, he took a part-time job but was given only 3 hours of work.
Megan is a 23-year-old recent college graduate. She did not work for pay last week, but she had two job interviews.
Raphael is a 78-year-old retired professor. He enjoys volunteering at the local public library.
Becky is a 31-year-old science teacher who taught at West Valley Middle School last year. Due to budget cuts, she was laid off at the end of the school year. It's the summer now, and after a few weeks of vacation with her family, she is looking for a part-time job as a tutor.
Alex is a 20-year-old American Studies major at the University of Tennessee. It's summer now, and he is working as a lifeguard in Mobile, Alabama.
Susan is a 10-year-old student at East Valley Middle School. She babysits her younger brother and does other chores, so her parents give her an allowance of $25 per week.

Complete the right half of the following equation to reflect the labor force participation rate reported by the BLS.

Labor Force Participation RateLabor Force Participation Rate

=  =

According to this formula, what is the labor force participation rate of this economy of six people?

40%

50%

80%

100%

Complete the right half of the following equation to reflect the unemployment rate reported by the BLS.

Unemployment RateUnemployment Rate

=  =

According to this formula, what is the unemployment rate of this economy of six people?

40%

50%

80%

100%

Answer 1

Larry is a discouraged worker, who now works as a part time worker now. A worker is considered employed if he works as a part- tie employee. Thus, larry is employed.

As Megan is not employed anywhere, thus she is unemployed.

Rapheal is a retired proffesor. So, he is outside the labour force and is neither employed or unemployed.

Becky has been laid-off and now she is looking for job. So she is unemployed.

Alex is presently working as lifeguard so he is employed.

Susan is a 10 year old kid, so she is out of the labour force.

The labour force participation is the percentage of labour force in the total polulation.

The total population is 6.

The labour force is given by the total number of employed and unemplyed people in the economy. The total labour force is 4

The labour force participation rate is 80%

The unemployment rate is (2/6)*100 = 40%