Week 6 Quiz
(TCO F) The size of the labor force in a community is 500, and 400 of these folks are gainfully employed. In this community, 100 people over the age of 16 do not have a job and are not looking for work. In addition, 200 people in the community are under the age of 16. The unemployment rate is ______.
Student Answer: 500 total -400 working = 100 not working. 100/500= 1/5 = 20% unemployment rate of people 16 or over. Instructor Explanation: The unemployment rate is calculated by dividing the number of unemployed by the labor force. The labor force is calculated by subtracting three things from the population (# under 16, # of institutionalized adults, and # not looking for work). In …show more content…
What would be feasible terms of trade between Egypt and Greece?
Student Answer: Egypt 1s =12P 1p= 1/12 s Greece 1s= 1/2p 1p= 2s Egypt comparative advantage in producing pants, and Greece comparative advantage is shirts. If Egypt trades 1 pants, Greece would give them 2 shirts. If Greece trades 1 shirts, Egypt would give them 12 pants. Instructor Explanation: Feasible terms of trade between 2 countries lie somewhere between the opportunity costs in the 2 countries. In this case, in Egypt -- 1 Shirt = 4 Pants, and in Greece -- 1 Shirt = 3 Pants. So, the only feasible terms of trade between the 2 countries would be anywhere in between these limits -- anything between 3 and 4 Pants per Shirts would work.
At any terms of trade higher or lower than 3 to 4 Pants per Shirts, one of the countries would be able to do better than the terms of trade simply by trading