Suppose that initially the Pennsylvania economy is in equilibrium with no unemployment:
Ls = -1,000,000 + 200W and Ld = 19,000,000 - 300W, where W = annual wages and L = number
of workers. Then structural unemployment arises because the demand for labor falls in Pennsylvania but wages there are inflexible downward and no one moves out of state. If labor demand falls to
Ld = 18,000,000 - 300W, how many workers will be unemployed in Pennsylvania? What will be its unemployment rate?
The 4. The following table gives data on characteristics of inhabitants in Anytown, U.S.A.
Characteristic
Number (in Thousands) of People
Population
500
Population over age 16
400
Persons employed full-or part-time
200
Persons unemployed and actively
seeking work
20
Persons who have quit seeking work
due to lack of success
10
Part-time workers seeking full-time jobs
30
a. Identify the number of people employed, the number of people unemployed, and the number of people in the labor force.
b. Calculate the labor force participation rate, the employment rate, and the labor force unemployment rate