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 71-year-old professor. He teaches only one or two courses a year, but he's still pursuing an active research agenda.
Megan is a 32-year-old professional basketball player. She finished her last season as a player 3 weeks ago and is currently interviewing for a coaching position.
Raphael is a 39-year-old graphic designer who is taking 2 years off from work to care for his small daughter.
Becky is a 26-year-old who lost her job as a copy editor for a local newspaper. She has spent the past few weeks out of work and interviewing for other editing jobs. She is thinking about going back to grad school if her job search doesn't succeed after a few more weeks.
Alex is a 17-year-old who just graduated from high school. He is taking it easy this summer, relaxing by the pool with his friends and family, and volunteering part-time at the local nursing home.
Susan is a 13-year-old student at West Valley Middle School. She babysits her younger sister and does other chores, so her parents give her an allowance of $20 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?

20%

60%

66.67%

200%

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?

20%

60%

66.67%

200%

Answer 1

Larry - employed (has a job and is earning)

Meghan - unemployed (no job; looking for one)

Raphael - not in the labor force (stay home dad)

Becky - unemployed (lost her job; looking for one)

Alex - not in labor force (graduate; not looking for job yet)

Susan - not in the adult population (not an adult)

Part 2:

a. Labor force participation rate = Labor force/ Adult population

b. LFPR = 3/5 = 60%

c. Unemployment rate = Number of unemployed people/ Labor force

d. Unemployment rate = 2/3 = 66.67%