Section+Exercise+15+solns

Section+Exercise+15+solns - DepartmentofEconomics 2011

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Department of Economics               Spring  2011 University of California, Berkeley         Economics 1    Head GSI: Swetha  Doraiswamy Section Exercise 15 1) For each person described below, write in the box to the right the type of unemployment  the person is experiencing. The choices are: frictional, cyclical, structural, and hidden.  Give a brief explanation of your answer. a. a waiter at a restaurant in Santa Clara, laid off after the tech bubble burst CYCLICAL: Fewer high-paying tech jobs leads to deficient demand for restaurant meals.  This means higher unemployment for waiters in Santa Clara. b. a checker at a Home Depot, laid off after self-scanning machines were installed STRUCTURAL: The checker’s skills are now obsolete due to changes in the structure of  how Home Depot does business. c. a sales clerk, who quit his previous job because he couldn’t get enough hours FRICTIONAL: The clerk is temporarily in-between jobs because he is looking for a job  that better matches his skills and desires. d. an accounting manager, laid off after her firm decided to close its own accounting  department and hire an outside accounting firm to do the company’s books  STRUCTURAL: The accounting manager’s skills are now obsolete due to changes in the  structure of how the company does its books. e.
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Section+Exercise+15+solns - DepartmentofEconomics 2011

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