Guess what! There was an error in my answer key for our second midterm Exam 2, on question 3. It was on the question about the average number of weeks people are unemployed in a simple economy. Congratualtions to Nick Doidge for finding the mistake and bringing it to my attention. It is important because you will need to know this way of computing averages.
3) In an economy of 100 people in the labor force, if 10 people are unemployed for 4 weeks during the year, and 30 people are unemployed for 8 weeks during the year, and the rest are employed continuously throughout the year, then the average duration of unemployment in this economy is:
A) 4 weeks B) 7 weeks C) 8 weeks D) 20 percent E) 40 percent
Answer: B Learning Objective: Duration Level of Learning: Application Type: Word Problem Source: Unique
This answer is wrong, courtesy of Nick Doidge. The correct answer is 2.8 weeks.
(.1)*4 + (.3)*8 + (.6)*0 = 2.8 weeks.
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