Chapter 7: Problem 29

What type of unemployment (cyclical, frictional, or structural) applies to each of the following: a. landscapers laid off in response to drop in new housing construction during a recession. b. coal miners laid off due to EPA regulations that shut down coal fired power c. a financial analyst who quits his/her job in c. Chicago and is pursing similar work in Arizona d. printers laid off due to drop in demand for printed catalogues and flyers as firms go the internet to promote an advertise their products. e. factory workers in the U.S. laid off as the plants shut down and move to Mexico and Ireland.

Short Answer

Expert verified

a. Cyclical unemployment b. Structural unemployment c. Frictional unemployment d. Structural unemployment e. Structural unemployment

Step by step solution

Case a: landscapers laid off in response to drop in new housing construction during a recession.

This situation involves a drop in the demand for labor due to an economic downturn, which indicates that it is a case of cyclical unemployment. Cyclical unemployment occurs when there is not enough demand in the economy to provide jobs for everyone who wants to work.

Case b: coal miners laid off due to EPA regulations that shut down coal-fired power

This situation involves coal miners being laid off due to changes in regulations and the decline of an entire industry. This is an example of structural unemployment. Structural unemployment occurs when the skills of some workers don't match the skills that employers are seeking.

Case c: a financial analyst who quits his/her job in Chicago and is pursuing similar work in Arizona

This situation involves a worker voluntarily leaving their job to find similar work in another location. This is an example of frictional unemployment. Frictional unemployment occurs when people are between jobs or are looking for their first job.

Case d: printers laid off due to drop in demand for printed catalogues and flyers as firms go to the internet to promote and advertise their products.

This situation involves workers being laid off due to technological changes. This is an example of structural unemployment. As mentioned before, structural unemployment occurs when the skills of some workers don't match the skills that employers are seeking. In this case, the demand for printed materials decreased due to the rise of digital marketing, leading to a decline in the market for printers.

Case e: factory workers in the U.S. laid off as the plants shut down and move to Mexico and Ireland.

This situation involves workers losing their jobs due to plants moving to different countries. This is an example of structural unemployment as well, since the labor market in the U.S. no longer demands these specific workers. The driving factor behind this structural unemployment could be cheaper labor costs or more favorable business environments in other countries, which leads to a shift in the structure of the economy.

Unlock Step-by-Step Solutions & Ace Your Exams!

Full Textbook Solutions
Get detailed explanations and key concepts
Unlimited Al creation
Al flashcards, explanations, exams and more...
Ads-free access
To over 500 millions flashcards
Money-back guarantee
We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!