Question

Involuntary Unemployment: INDICATE TRUE OR FALSE BESIDE EACH OF THE 4 STATEMENTS

a.) When a firm sacks a worker against her wishes but she can get another job immediately, there is involuntary unemployment.

b.) When there is involuntary unemployment, the employment rent is zero.

c.) When there is no involuntary unemployment, firms must be employing workers without ever dismissing them.

d.) There must be involuntary unemployment in an efficiency wage equilibrium.

Answer 1

Involuntary unemployement means that a person is willing to work at any wage but not able to get work.

1) False in the above case the worker is removed and agai9n immediately she got another thus means she is not unemployed.

2) false when there is involuntary unemployment that does not mean employment rent is zero as there are also other people working some other firms means the employment is there but there are no sufficient jobs for the people who are looking for work

3) False dismissing a worker depends upon his character skill and ability to work this not have any link with unemployment.