The population of Tiny Town is 100 people and the labor force is made up of 75 people. If 5 of these people are unemployed, the unemployment rate is
A) 5/100 × 100.
B) 5/75 × 100.
C) 5/80 × 100.
D) There is not enough information provided to calculate the unemployment rate.

Question

Quizplus · Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals by the labor force and multiplying by 100. Therefore, the unemployment rate in this case is (5/75) x 100 = 6.67%. Choice A is inaccurate because it uses the total population instead of the labor force in the denominator. Choice C incorrectly includes an additional 5 people in the denominator. There is enough information provided to calculate the unemployment rate, so choice D is incorrect.

The Population of Tiny Town Is 100 People and the Labor