(1)
Population: 250,000
Unemployed: 20,000
Labor Force Participation Rate: 80%
(a) How many people are in the labor force?
(b) What is the unemployment rate?
(2)
Not in the labor force: 125,000
Unemployed: 25,000
Employed: 100,000
What is the unemployment rate?
How many people are in the labor force and what is the unemployment rate?
Assuming that the population includes only those people between 16 and 64, then 200,000 are working or actively looking for a job. The unemployment rate is 20,000 / 200,000 or 10%.
http://economics.about.com/od/unemploymentrate/f/labor_force.htm
To answer these questions, we need to understand the concepts of labor force and unemployment rate.
1. (a) To find the number of people in the labor force, we use the formula:
Labor Force = Population * Labor Force Participation Rate
Given:
Population = 250,000
Labor Force Participation Rate = 80%
Calculating the labor force:
Labor Force = 250,000 * 0.8
Labor Force = 200,000
Therefore, there are 200,000 people in the labor force.
(b) To find the unemployment rate, we use the formula:
Unemployment Rate = (Number of Unemployed / Labor Force) * 100%
Given:
Number of Unemployed = 20,000
Labor Force = 200,000
Calculating the unemployment rate:
Unemployment Rate = (20,000 / 200,000) * 100%
Unemployment Rate = 10%
Therefore, the unemployment rate is 10%.
2. To find the unemployment rate, we use the formula:
Unemployment Rate = (Number of Unemployed / (Number of Employed + Number of Unemployed)) * 100%
Given:
Number of Unemployed = 25,000
Number of Employed = 100,000
Calculating the unemployment rate:
Unemployment Rate = (25,000 / (100,000 + 25,000)) * 100%
Unemployment Rate = (25,000 / 125,000) * 100%
Unemployment Rate = 20%
Therefore, the unemployment rate is 20%.