Chapter 16 Question 5
Frictional unemployment also known as search unemployment distinguishes the time period between jobs when a worker is searching for or transitioning from one occupation to the next. Unemployment that exits in a fast growing economy with an expanding mobile, elastic and adaptable labor force of having many different options. With this type of structure can be beneficial to workers because it allows them to seek for positions they desire most or jobs that best suit their qualifications. This also becomes a plus for companies who want skillful workers because it allows them to be selective in there candidates for hire. The extinction of frictional unemployment would keep people in the same jobs for life, creating rifts in a system that suppresses innovation and rusticates skills. More importantly, frictional unemployment matches the demand for workers with the supply. The last several years our nation has struggle with this barrier because of lack of education or not enough experience in a certain field. Frictional employment arises from those candidates that are just graduating for college and those who are unemployed because they are looking or changing occupation. Frictional unemployment is present now because there is imperfect data in the labor market and workers have to search for employment suitable for their skill set.
Chapter 25 Question 7
The system of trading goods and service has been a part of civilizations since BC. The option to sell or buy an item or service has been very profitable as well. For example in the early 1800s when the New World discovered that coffee beans from South America were an awesome good to have. Even with the traditional substitute of tea being what the New World was accustom to, we bought tons coffee beans. With that being established, free trade was key in this process. Absolute and comparative advantage became the foundation of the trade market. For...