1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Tamiku [17]
3 years ago
6

Consider an economy with 500 people in the labor force. At the beginning of every month, 5 people lose their jobs and remain une

mployed for exactly one month; one month later, they find new jobs and become employed. In addition, on January 1 of each year, 20 people lose their jobs and remain unemployed for six months before finding new jobs. Finally, on July 1 of each year, 20 people lose their jobs and remain unemployed for six months before finding new jobs.
a. What is the unemployment rate in this economy in a typical month?
b. What fraction of unemployment spells lasts for one month? What fraction lasts for six months?
c. What is the average duration of a completed spell of unemployment?
d. On any particular date, what fraction of the unemployed are suffering a long spell (six months) of unemployment?

Business
2 answers:
Otrada [13]3 years ago
5 0

Answer:

a. What is the unemployment rate in this economy in a typical month?

  • 5%

b. What fraction of unemployment spells lasts for one month? What fraction lasts for six months?

  • 1% lasts 1 month, 4% lasts 6 months

c. What is the average duration of a completed spell of unemployment?

  • 5 months

d. On any particular date, what fraction of the unemployed are suffering a long spell (six months) of unemployment?

  • 80%

Explanation:

given:

total labor force = 500 people

every month 5 people are frictionally unemployed

at January 1, 20 people lose their jobs and find new jobs by the end of June

at July 1, 20 people lose their jobs and find new jobs by the end of December

total unemployed on a typical month = 5 + 20 = 25 ⇒ 5%

unemployed for 1 month = 5 ⇒ 1%

unemployed for 6 months = 20 ⇒ 4%

average duration of unemployment = [(20 x 6) + (5 x 1)] / 25 = 5 months

on any day, 20/25 = 80% of the unemployed are suffering a long spell unemployment

yawa3891 [41]3 years ago
3 0

Answer:

a) 5%

b) 0.60 0.40

c) 3months

d) 80%

Explanation:

The solution is attached in the picture below

You might be interested in
Compare transnet with a perfect competitor in terms of price and output and profit
Sholpan [36]
Transnet SOC Ltd is a rail, port, and pipeline company in Johannesburg. 

Price: This company is a price maker, therefore, in terms of price, Transnet perfect compitetor is a price taker.

Output: Transnet has the ability to decide the quantity of their output and they have many competitors on this one.

<span>Profit: Transnet might be able to increase their profit but in a competition it would be hard because customers might switch to the competitor. </span>
5 0
3 years ago
Which of the following is NOT part of value-chain analysis? (a) product research (b) quality management (c) supply chain managem
andriy [413]

Answer:

c? , supply chain management

7 0
2 years ago
The theory of ____________ states that a nation should produce and sell goods to other countries that it produces most efficient
nikitadnepr [17]

comparative advantage theory is the answer

4 0
3 years ago
Which of the following is an example of discrimination in the workplace? refusing to hire a person because another person is bet
zzz [600]
Refusing to hire a minority. It is illegal to discriminate based on race, gender, etc. The other options are valid reasons to choose not to hire someone
6 0
3 years ago
The cost of capital of a company that uses 45 percent debt that has an after-tax cost of debt of 10 percent and 55 percent equit
zimovet [89]

Answer:

12.75 %

Explanation:

Cost of Capital is calculated on a Weighted Average basis. This is because there is a Pooling of Funds when it comes to financing projects. So Cost of Capital is the Return that is Required by providers of Long Term source of finance.

Cost of Capital = E/V × Ke + D/V × Kd

Where,

E/V = Market Weight of Equity

      = 0.55

Ke = Cost of Equity

    = 15%

D/E = Market Weight of Debt

      = 0.45

Kd = Cost of Debt

     = 10%

Therefore,

Cost of Capital = 0.55 × 15% +  0.45 × 10%

                         = 12.75 %

4 0
2 years ago
Other questions:
  • An expense that has been incurred but not yet paid is called​ a(n) ________.
    8·1 answer
  • Portfolio A has a beta of 1.0 and an expected return of 22%. Portfolio B has a beta of 2.0 and an expected return of 17%. The ri
    11·1 answer
  • A university begins Year 1 with 80 faculty. They hire 4 faculty each year. During each year 10% (rounded to the nearest integer)
    12·1 answer
  • Mia received a credit card offer in the mail. The credit card has an annual percentage rate of 26%. What is the approximate mont
    10·1 answer
  • Process which is followed to monitor the movement of stock in a company<br><br>​
    7·1 answer
  • Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $57,000, and the
    8·1 answer
  • What are the six stages of the product adoption process?
    8·1 answer
  • Which punctuation mark best matches the image?
    7·1 answer
  • Mateo gets an email from an address he doesn't recognize asking him to send money. It is a young student who is stranded oversea
    6·2 answers
  • What's the definition of user retention and why it is important?<br> What drives user retention?
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!