Question

There are 100,000 inhabitants in Macronesia. Among those 100,000 inhabitants, 25,000 are too old to work and 15,000 inhabitants are too young to work. Among the remaining 60,000 inhabitants, 10,000 are not working and have given up looking for work, 45,000 are currently employed, and the remaining 5,000 are looking for work but do not currently have a job. a. What is the number of people in the labor force in Macronesia? b. What is the unemployment rate in Macronesia? c. How many people in Macronesia are discouraged workers?

Name: Problem 5, Chapter 6: Macroeconomics
Uploaded: 2023-10-25T15:01:50-08:00
Channel: Rashmi Sinha

   There are 100,000 inhabitants in Macronesia. Among those 100,000 inhabitants, 25,000 are too old to work and 15,000 inhabitants are too young to work. Among the remaining 60,000 inhabitants, 10,000 are not working and have given up looking for work, 45,000 are currently employed, and the remaining 5,000 are looking for work but do not currently have a job.
a. What is the number of people in the labor force in Macronesia?
b. What is the unemployment rate in Macronesia?
c. How many people in Macronesia are discouraged workers?

Macroeconomics

Paul Krugman, Robin… 1st Edition

Chapter 6, Problem 5

Instant Answer

Solved by Expert Rashmi Sinha

10/25/2023

Step 1

The labor force consists of people who are either employed or actively looking for work. In Macronesia, there are 45,000 employed people and 5,000 people looking for work. So, the labor force is 45,000 + 5,000 = 50,000 people. Show more…

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There are 100,000 inhabitants in Macronesia. Among those 100,000 inhabitants, 25,000 are too old to work and 15,000 inhabitants are too young to work. Among the remaining 60,000 inhabitants, 10,000 are not working and have given up looking for work, 45,000 are currently employed, and the remaining 5,000 are looking for work but do not currently have a job. a. What is the number of people in the labor force in Macronesia? b. What is the unemployment rate in Macronesia? c. How many people in Macronesia are discouraged workers?

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Key Concepts

Discouraged Workers

Discouraged workers are individuals who are available for work and would like to have a job but have given up actively seeking employment due to a lack of available opportunities. They are not counted among the unemployed because they are no longer actively searching for work, yet they are important in evaluating the true slack in the labor market.

Labor Force

The labor force refers to the portion of the working-age population that is either employed or actively seeking employment. It excludes individuals who are not actively looking for work, such as retirees, students, or discouraged workers who have stopped job hunting.

Unemployment Rate

The unemployment rate is the percentage of the labor force that is unemployed but actively looking for work. It is calculated by dividing the number of unemployed job seekers by the total labor force, providing an indicator of the health of the labor market.

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