Refer to the Article Summary. Explain how the declining labor ...

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Refer to the Article Summary. Explain how the declining labor force could have led to the decrease in the unemployment rate.
 
  What will be an ideal response?

Question 2

Assume that you observe the long-run average cost curve of ACME Bookstores, a national chain.
 
  Starting from the point on the curve where output is zero and moving to the right, which of the following lists the behavior of long-run average costs in the correct sequence (that is, which will be observed first, second, etc.)?
  A) economies of scale; constant returns to scale; diseconomies of scale; minimum efficient scale
  B) economies of scale; minimum efficient scale; constant returns to scale; diseconomies of scale
  C) minimum efficient scale; economies of scale; constant returns to scale; diseconomies of scale
  D) constant returns to scale; economies of scale; minimum efficient scale; diseconomies of scale

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Answer to Question 1

The labor force is calculated as the sum of employed workers and unemployed workers in the economy. If the labor force is declining and, simultaneously, the unemployment rate is falling, the number of people in the labor force classified as unemployed workers must be decreasing, as is indicated in the article by the aging population and increasing retirement for the baby boomers.

Answer to Question 2

B