Question

A survey reveals that on a small island 100 people have jobs, 25 people are looking for jobs, and 45 people are neither working nor looking for work. The unemployment rate on the island is:

A) 12.5%.
B) 50%.
C) 25%.
D) 20%.

Answer 1

The correct answer is option D. The unemployment rate on the small island is calculated by dividing the number of unemployed people (25) by the total labor force (125) and multiplying by 100, resulting in a rate of 20%.

Step-by-step explanation:

The question of determining the unemployment rate on a small island requires the application of basic mathematical concepts related to percentages. To calculate the unemployment rate, you divide the number of unemployed people by the total number of people in the labor force, and then multiply by 100 to convert it into a percentage.

The labor force includes only those who are employed or actively looking for work. Therefore, in this case, the labor force is the sum of people who have jobs (100) and people who are looking for jobs (25), which totals 125 individuals. The number of individuals who are neither working nor looking for work (45) are not considered in the labor force and thus not included in the calculation.

To find the unemployment rate, we take the number of people looking for jobs (25) and divide it by the total labor force (125), resulting in 0.20. Multiplying by 100 gives us a 20% unemployment rate. Therefore, the correct answer is D) 20%.