1. When insiders have a much greater impact on the wage-bargainingprocess than do outsiders, the negotiated wage is likely to be theequilibrium wage.

   A. about one-quarter of B. much less than
   C. almost equal to
   D. about one-half of

   E. much greater than

2. All of the following do not cause of structural unemployment,except: A. sectoral shift.

   B. efficiency wages.
   C. mismatch of skills
   D. employment-insurance.
   E. workers moving from one job to another

3. Workers unemployed as a result of wage rigidity are:
   A. actively searching for a job to match their skills.
   B. not eligible to receive employment-insurance benefits.
   C. waiting for a job to become available.
   D. relocating to another part of the country as a result ofsectoral shifts. E. actively seeking retirement.

4. Employment insurance increases the amount of frictionalunemployment by: A. softening the economic hardship ofunemployment.
   B. making workers more frantic in their search for new jobs.
   C. inducing workers to accept the first job offer that theyreceive.

   D. making employers more reluctant to lay off workers.
   E. making retired workers more willing to reenter the labourmarket.

5. Economists call the changes in the composition of demand amongindustries and regions: A. insider-outsider conflicts.

   B. sectoral shifts.
   C. moral hazard.
   D. adverse selection. E. efficiency wages.