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S4 Economics Unemployment, Paper 2: participation and types of unemployment
S4 Economics Unemployment, Paper 2: participation and types of unemployment
Ten graded items on the unemployment rate, the participation rate, seasonal and frictional unemployment, the effect of discouraged workers, real-wage unemployment and underemployment.
Focus The denominator is always the labour force, discouraged workers bias the rate down, and underemployment is not unemployment.
01 Paper details (check answers afterwards)
| Item | Detail |
|---|---|
| Questions | 10 |
| Suggested time | 25 |
| Difficulty mix | Foundation 4 · Intermediate 3 · Challenge 2 · Error redo 1 |
| Chapter | Chapter: S4 Economics: Unemployment |
| Level | Four basic, three advanced, two challenge and one error-repair item |
02 Questions (10 items)
- FoundationEmployment is 4.50 million and unemployment is 0.30 million. Find the unemployment rate.
- FoundationThe population aged 15 and above is 6.00 million and the labour force is 4.20 million. Find the participation rate.
- FoundationTheme parks hire extra staff in summer while construction workers get little work in winter. Which type of unemployment is this?
- FoundationA graduate spends two months finding a first job. Which type of unemployment is this?
- IntermediateUnemployment is 0.18 million and employment is 5.82 million. Find the unemployment rate.
- IntermediateThe labour force is 6.00 million with 0.36 million unemployed. If 30 000 of them stop looking for work, what is the new unemployment rate?
- IntermediateA minimum wage set well above the market-clearing wage leaves some low-skilled workers jobless. Which type of unemployment is this?
- ChallengeUnemployment rises from 4% to 6.5% with a labour force of 5.00 million. By how many people does unemployment rise?
- ChallengeMing works only ten hours a week but wants full-time work. What is his status and does it count in the unemployment rate?
- Error redoError repair: a student writes that everyone without a job is unemployed. What is wrong?
03 Answers and one-line notes
| # | Answer | One-line note |
|---|---|---|
| 1 | 6.25% | The labour force is 4.80 million, and 30 over 480 is 6.25%. |
| 2 | 70% | Labour force over the population aged 15 and above, 420 over 600, is 70%. |
| 3 | Seasonal unemployment | It follows regular seasonal swings in demand and repeats every year, so it is seasonal unemployment. |
| 4 | Frictional unemployment | Short spells caused by the time needed to match workers with jobs are frictional unemployment. |
| 5 | 3% | The labour force is 6.00 million, and 18 over 600 is 3%. |
| 6 | About 5.53% | Unemployment falls to 330 000 and the labour force to 5.97 million, so 33 over 597 is 5.53%; the rate falls even though nothing improved. |
| 7 | Real-wage unemployment | When wages are held above equilibrium by law or unions, quantity demanded falls short of supply, giving real-wage unemployment. |
| 8 | 125 000 | A gap of 2.5 percentage points on 5 million is 125 000 people. |
| 9 | He is underemployed and it is not counted as unemployment | He has a job but too few hours, so he is underemployed; unemployment counts only people without work who are actively seeking it. |
| 10 | One must be jobless, available and actively seeking work | Retirees, full-time students and homemakers are not unemployed; only those able and actively seeking work count. |
04 What to do after marking
- After marking, redo only the wrong items and write down which step went wrong (formula, unit, or misread number).
- Repeat the same item two days later; move to the next paper only when both attempts are correct.
- Parents only need the answer and note columns; there is no need to explain every item.
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