Question

Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more workers. The unemployment created by this change is:

A. frictional unemployment created by sectoral shifts.
B. structural unemployment created by sectoral shifts.
C. structural unemployment created by efficiency wages.
D. frictional unemployment created by efficiency wages.

Answer 1

The correct answer is: A. frictional unemployment created by sectoral shifts.

Step-by-step explanation:

Frictional unemployment is a type of search unemployment, which occurs when the worker is looking for a job, or being transferred from one job to another.

This type of unemployment is caused by several circumstances, in the scenario exemplified by the question above, frictional unemployment occurs due to sectoral changes, due to the popularity of the low-carb diet, so there was a migration of jobs from bakeries that need less workers to the steakhouses who need more workers.