Question

In: Economics

Consider a small economy composed of six people: Hubert, Kate, Manuel, Poornima, Valerie, and Shen. Each...

Consider a small economy composed of six people: Hubert, Kate, Manuel, Poornima, Valerie, and Shen. Each person's employment status is described in the following table.
Based on the criteria used by the Bureau of Labor Statistics (BLS), identify each person’s status as employed, unemployed, “not in the labor force” (if not in the civilian labor force but still part of the adult population), or “not in the adult population” if not in the civilian adult population.
PersonStatus
Hubert is a 21-year-old professional tennis player. When he's not competing, he works as a coach at a local tennis club.
Kate is a 42-year-old autoworker who was just laid off by her employer. She is trying to find any kind of job to help make ends meet.
Manuel is a 45-year-old accountant who has been out of work for almost a year. He became so discouraged that he gave up on his job search a couple of months ago.
Valerie is a 29-year-old who lost her job as an associate producer for a radio station. After spending a few weeks out of work and interviewing for several other positions, she gave up on her job search and decided to go back to grad school. She made that decision a few months ago.
Shen is a famous novelist. He is spending the summer at his lake house in upstate New York, doing a little writing each day but mostly spending his time gardening and reading.
Poornima is a 13-year-old student at East Valley Middle School. She babysits her younger brother and does other chores, so her parents give her an allowance of $20 per week.
Complete the right half of the following equation to reflect the labor force participation rate reported by the BLS.
Labor Force Participation RateLabor Force Participation Rate = =   
According to this formula, what is the labor force participation rate of this economy of six people?
33.33%
40%
50%
60%
Complete the right half of the following equation to reflect the unemployment rate reported by the BLS.
Unemployment RateUnemployment Rate = =   
According to this

Solutions

Expert Solution

Hubert is a 21-year-old professional tennis player. When he's not competing, he works as a coach at a local tennis club. employed

Kate is a 42-year-old autoworker who was just laid off by her employer. She is trying to find any kind of job to help make ends meet. unemployed

Manuel is a 45-year-old accountant who has been out of work for almost a year. He became so discouraged that he gave up on his job search a couple of months ago. not in the labor force

Valerie is a 29-year-old who lost her job as an associate producer for a radio station. After spending a few weeks out of work and interviewing for several other positions, she gave up on her job search and decided to go back to grad school. She made that decision a few months ago. not in the labor force

Shen is a famous novelist. He is spending the summer at his lake house in upstate New York, doing a little writing each day but mostly spending his time gardening and reading. not in the labor force

Poornima is a 13-year-old student at East Valley Middle School. She babysits her younger brother and does other chores, so her parents give her an allowance of $20 per week. not in the adult population

Employed: Those who are actively working

Unemployed: Those who are not working and looking for jobs

Not in the Labor Force: Those who are not actively seeking employment but are also not employed

Not in the adult population: Those who are below the age of 18.

Labour Force Participation Rate = (Employed + Unemployed) / (Employed + Unemployed + Not in labour Force) = (1+1) / (1+1+3) = 2/5 = 40%

So the Labor force Participation Rate is 40%

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