Question

UANITA: Hi Neha, I'm working on my Aplia homework and realized that I do not understand the definition of the labor force very well. Does it include discouraged workers? NEHA: Hi Juanita, the conventional definition of the labor force excludes discouraged workers. This is because they gave up looking for jobs . Also, be sure not to mistake discouraged workers for part-time workers. The key difference is that the latter are low-skilled workers . JUANITA: I think I understand it now, thank you. NEHA: Let me ask you a question to see if you can apply your knowledge. Consider an economy with 20 full-time workers, 16 part-time workers, 10 workers who have been laid off but are actively looking for a new job, and 3 formerly full-time workers who have been without a job for over a year, failed to find any, and gave up looking. Can you please calculate the total labor force and the unemployment

Answer 1

Answer:

The labor force is 46 workers. The unemployment rate is 21.7%.

Explanation:

The number of full time workers is 20.

The number of part time workers is 16.

The number of unemployed workers is 10.

The number of discouraged workers is 3.

The total labor force will include employed and unemployed workers.

So, the total labor force is 46.

The unemployment rate is the ratio of unemployed workers to total labor force.

Unemployment rate

=$\frac{unemployed workers}{total labor force}$

=$\frac{10}{46}$

=0.217

So,the unemployment rate is 21.7%