## Related questions with answers

An economy has 100 people divided among the following groups: 25 have full-time jobs, 20 have one part-job, 5 have two part-time jobs, 10 would like to work and are looking for jobs, 10 would like to work but are so discouraged the have given up looking, 10 are running their own businesses, 10 are retired, and 10 are small children. a. Calculate the labor force and the labor-force participation rate. b. Calculate the number of unemployed and the unemployment rate. c. Calculate total employment in two ways: as measured by the household survey and as measured by the establishment survey.

Solutions

VerifiedIn this problem, we will determine the indicators related to employment.

There are $100$ people in an economy.

$25$ have full time jobs, $20$ have one part-time job, $5$ have two part-time jobs, $10$ are looking for jobs, $10$ have given up looking, $10$ are running their own businesses, $10$ are retired, and $10$ are small children.

a) First we need to calculate the labor force.

The labor force are the employed and the unemployed.

$25+20+5+10+10=70$

Then we need to calculate the labor-force participation rate.

$\dfrac{70}{90}\cdot100=77.78$

b) The number of unemployed is $10$.

The unemployment rate is

$\dfrac{\text{number of unemployed}}{\text{Labor force}}\cdot100=\dfrac{10}{70}\cdot100=14.28\%$

c) Measured by household surveys

Number of employed $+$ business owners

$25+20+5+10=60$

Measured by establishment surveys

$25+20+10=55$

The $5$ people who have $2$ part-time jobs appear in two surveys.