The towns of Sawyer and Thatcher each have a labor force of 1,200 people. In Sawyer, 100 people were unemployed for the entire year, while the rest of the labor force was employed continuously. In Thatcher, every member of the labor force was unemployed for 1 month and employed for 11 months.
a. What is the average unemployment rate over the year in each of the two towns?
b. What is the average duration of unemployment spells in each of the two towns?
c. In which town do you think the costs of unemployment are higher? Explain.