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the
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and
then
check
your
answer.
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the
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Question
1
Define
the
following:
Unemployment,
voluntary
unemployment,
involuntary
unemployment.
Check
answer.
Unemployment.
Where
people
are
willing
and
able
to
work,
but
are
unable
to
find
a
job
(employment).
Voluntary
Unemployment.
People
who
do
not
want
a
job
at
the
current
wage
rate.
Involuntary
Unemployed.
People
who
want
a
job
at
the
current
wage
rate,
but
are
unable
to
find
a
job.
Next
Question.
Previous
Question.
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Question
2
Compare
and
contrast
the
effect
of
unemployment
due
to
a
recession
and
an
increase
in
unemployment
due
to
a
reduction
in
production
in
the
dairy
industry
due
to
a
fall
in
demand:
Check
answer.
A
reduction
in
output
in
the
dairy
industry
is
structural
unemployment
–
the
labour
market
is
no
longer
able
to
match
jobs
with
people’s
skills.
People
who
were
employed
by
the
dairy
industry
will
lose
their
jobs
and
the
skills
they
have
acquired
from
this
job
may
not
be
transferable
to
other
areas,
they
may
have
to
retrain
to
obtain
new
skills
to
enable
them
to
find
a
job.
A
recession
will
cause
Cyclical
unemployment,
which
will
affect
different
areas
across
the
economy
and
will
affect
a
number
of
industries
and
people.
Eventually
as
the
economy
recovers
these
people
will
find
jobs
and
be
re-employed.
Cyclical
unemployment
is
more
serious
in
the
short-run
as
a
lot
more
people
will
be
affected,
but
eventually
the
economy
should
recover
and
these
people
will
be
re-employed.
In
the
long-run
structural
unemployment
may
be
more
serious
as
the
workers
will
be
unable
to
find
a
job
because
their
skills
no
longer
match
the
jobs
available
in
the
labour
market
so
even
though
less
people
are
affected,
the
situation
may
continue
for
a
much
longer
period
of
time.
Cyclical
unemployment
will
affect
a
number
of
regions
and
industries
and
so
has
a
more
equal
impact
across
the
economy
affecting
many
people.
Structural
unemployment
only
affects
one
group
of
people,
in
this
case
people
who
work
in
the
dairy
industry.
The
effects
of
this
type
of
employment
will
only
affect
some
regions
and
one
industry
and
so
has
a
more
unequal
impact
than
Cyclical
unemployment
caused
by
a
recession.
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Question.
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Question.
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Question
3
The
demand
for
labour
is
a
derived
demand.
What
does
this
mean?
Check
answer.
The
demand
for
labour
is
derived
or
comes
from
the
demand
for
other
goods
and
services.
There
is
no
direct
demand
for
labour.
It
comes
from
the
demand
for
other
commodities.
An
increase
in
demand
for
commodities
will
increase
the
demand
for
labour.
Next
Question.
Previous
Question.
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Question
4
What
is
a
minimum
wage?
How
does
a
minimum
wage
affect
employment?
Check
answer.
A
minimum
wage
is
a
wage
rate
set
by
law.
It
is
set
above
the
equilibrium
wage
rate.
A
minimum
wage
will
cause
a
fall
in
the
quantity
demanded
for
labour
and
so
cause
a
fall
in
employment.
Involuntary
unemployment
will
be
caused
by
the
introduction
of
a
minimum
wage.
Next
Question.
Previous
Question.
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Question
5
Name
the
points
on
the
diagram
A,
B
and
C.
Check
answer.
Click
to
enlarge
image.
Click
and
hold
to
reduce
.
A
=
Employment
-
the
Quantity
demand
of
labour
is
the
level
of
employment
-
after
the
minimum
wage
has
been
imposed
this
is
the
number
of
people
now
employed
in
the
economy.
B=
Involuntary
Unemployment
-
at
the
new
minimum
wage
these
people
want
a
job,
are
actively
seeking
a
job
and
can
start
immediately
-
but
are
unable
to
find
a
job.
C
=
Voluntary
Unemployment
-
people
unwilling
to
work
at
the
current
minimum
wage.
Previous
Question.
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WINDOW
Next
Question.
Question
6
Use
the
diagram
to
explain
the
impact
of
an
increase
in
the
minimum
wage
on
the
labour
market.
.
Check
answer.
Click
to
enlarge
image.
Click
and
hold
to
reduce
.
An
increase
in
the
minimum
wage
will
cause
a
decrease
in
the
quantity
demanded
for
labour
as
firms
no
longer
are
able
/
willing
to
employ
as
many
people
at
the
higher
wage
rate.
The
quantity
supplied
of
labour
will
increase
as
more
people
are
willing
to
work
at
the
higher
wage
rate.
As
seen
in
the
diagram
the
quantity
demanded
will
fall
from
300
000
to
200
000
and
the
quantity
supplied
will
increase
from
400
000
to
500
000.
Employment
will
decrease
and
i
nvoluntary
unemployment
will
increase
from
100
000
to
300
000.
The
number
of
people
voluntarily
unemployed
will
decrease.
Previous
Question.
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Next
Question.
Question
7
Use
the
diagram
to
explain
the
impact
of
a
decrease
in
the
demand
for
labour
due
to
a
fall
in
demand
for
commodities.
Check
answer.
Click
to
enlarge
image.
Click
and
hold
to
reduce
.
A
decrease
in
the
demand
for
commodities
will
cause
a
decrease
in
demand
for
labour
because
of
a
fall
in
production.
This
will
cause
a
decrease
in
demand
for
labour
as
firms
require
less
workers
as
production
falls.
The
demand
for
labour
will
decrease
causing
a
shift
of
the
demand
curve
to
the
left
from
DL1
to
DL2.
This
will
cause
a
decrease
in
the
number
of
people
employed
from
350
000
to
175
000
and
an
increase
in
involuntary
unemployment
from
150
000
to
325
000.
There
will
be
no
change
in
voluntary
unemployment,
because
the
minimum
wage
has
not
changed
so
no
more
people
are
supplying
their
labour
to
the
labour
market.
Previous
Question.
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Next
Question.
Question
8
The
Household
Labour
Force
Survey
recorded
200
000
people
as
being
unemployed
whereas
the
number
of
people
on
the
unemployment
benefit
is
150
000.
Explain
the
difference.
Check
answer.
To
be
unemployed
according
to
the
household
labour
force
survey
you
have
to
be
actively
seeking
work
and
be
ready
to
start
work
immediately
.
For
the
unemployment
benefit
,
some
people
may
be
ineligible
because
they
have
a
partner
who
is
earning
an
income
or
their
income
may
be
above
a
threshold.
If
they
are
not
eligible
for
the
benefit,
they
will
not
register
and
so
the
number
of
people
on
the
benefit
may
be
less
than
HLFS
unemployment
rate.
Previous
Question.
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