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2. Unemployment can arise in an economy even when there is no imbalance between the number of available workers and number of available jobs; and there is no mismatch between the skills of available workers and skill requirements of available jobs. 3. The long-run labor demand is more elastic than the short-run labor demand as firms can adjust both capital and labor in the long-run; and they can fully take advantage of changes in the price of labor.

2. Unemployment can arise in an economy even when there is no imbalance between the number of available workers and number of available jobs; and there is no mismatch between the skills of available workers and skill requirements of available jobs. 3. The long-run labor demand is more elastic than the short-run labor demand as firms can adjust both capital and labor in the long-run; and they can fully take advantage of changes in the price of labor.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter21: Unemployment
Section: Chapter Questions
Problem 41CTQ: Unemployment rates have been higher in many European countries in recent decades than in the United...
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2. Unemployment can arise in an economy even when there is no imbalance between the number of available workers and number of available jobs; and there is no mismatch between the skills of available workers and skill requirements of available jobs. 3. The long-run labor demand is more elastic than the short-run labor demand as firms can adjust both capital and labor in the long-run; and they can fully take advantage of changes in the price of labor.
Transcribed Image Text:2. Unemployment can arise in an economy even when there is no imbalance between the number of available workers and number of available jobs; and there is no mismatch between the skills of available workers and skill requirements of available jobs. 3. The long-run labor demand is more elastic than the short-run labor demand as firms can adjust both capital and labor in the long-run; and they can fully take advantage of changes in the price of labor.
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