Which of the following is an example of frictional unemployment?

• A. A factory worker who loses their job because the plant relocates overseas to reduce costs
• B. A recent college graduate who is temporarily unemployed while searching for their first full-time job
• C. A coal miner who is unemployed because the economy shifts away from coal toward renewable energy and their skills no longer match available jobs
• D. An auto worker laid off because a recession reduces demand for cars

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the definition of frictional unemployment. Frictional unemployment occurs when individuals are temporarily unemployed while transitioning between jobs or entering the labor market for the first time. It is usually short-term and voluntary.
2. Step 2: Analyze each option to see if it fits the definition of frictional unemployment. For example, a recent college graduate searching for their first full-time job is a classic case of frictional unemployment because they are temporarily between jobs.
3. Step 3: Identify other types of unemployment in the options. For instance, a factory worker losing a job due to plant relocation is structural unemployment because the job is eliminated due to changes in the economy or industry.
4. Step 4: Recognize that unemployment caused by economic downturns, such as an auto worker laid off during a recession, is cyclical unemployment, which is related to fluctuations in the business cycle.
5. Step 5: Conclude that the example fitting frictional unemployment is the recent college graduate temporarily unemployed while searching for their first full-time job, as it matches the definition of frictional unemployment.