Question 1

In which of the following countries has economic growth been sufficiently high that income would double every ten years?

Accepted Answer

A)   India
B)   Mexico
C)   South Korea
D)   ZimbabweE) None of the above
F) C) and D)

Question 2

In a market economy, scarcity of resources is most clearly reflected in

Accepted Answer

A)   supply.
B)   demand.
C)   market prices.
D)   the stock of the resource.E) All of the above
F) B) and C)

Question 3

Productivity

Accepted Answer

A)   is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries.
B)   explains very little of the differences in the standard of living across countries.
C)   explains some, but not most of the differences in the standard of living across countries.
D)   explains most of the differences in the standard of living across countries.E) A) and B)
F) A) and C)

Question 4

In 2010, the typical Bangladeshi had about

Accepted Answer

A)   less than half the real income of a typical American a century ago.
B)   about the same real income of a typical American a century ago.
C)   2 times as much real income as that of a typical American a century ago.
D)   4 times as much real income as that of a typical American a century ago.E) A) and B)
F) A) and D)

Question 5

If an inexpensive alternative to oil were found, the price of oil adjusted for inflation

Accepted Answer

A)   would decline as the alternative would reduce the demand for oil.
B)   would decline as the alternative would reduce the supply of oil.
C)   would increase as the alternative would increase the demand for oil.
D)   would increase as the alternative would increase the supply of oil.E) A) and B)
F) C) and D)

Question 6

Table 25-1.
Athens and Troy both produce only ribs and baked potatoes.
 
-Refer to Table 25-1. Which of the following is correct?

Accepted Answer

A)   Both real GDP and real GDP per person are higher in Athens than Troy.
B)   Real GDP is higher in Athens while real GDP per person is higher in Troy
C)   Real GDP is higher in Troy while real GDP per person is higher in Athens.
D)   Both real GDP and real GDP per person are higher in Troy than Athens.E) B) and D)
F) None of the above

Question 7

If over a short time there is an increase in the number of people retired and a decrease in the number of people working, then productivity

Accepted Answer

A)   and real GDP per person rise.
B)   rises but real GDP per person falls.
C)   falls and real GDP per person rises.
D)   and real GDP per person fall.E) None of the above
F) A) and B)

Question 8

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N) .
-Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then if we know the values of A, K/L, H/L, and N/L, we also know the value of

Accepted Answer

A)   output.
B)   labor productivity.
C)   A.
D)   All of the above are correct.E) B) and D)
F) All of the above

Question 9

All else equal, if there are diminishing returns, then if a country raised its capital by 100 units last year and by 100 units this year,

Accepted Answer

A)   the increase in output was greater for this year than last year.
B)   the increase in output was greater last year than this year.
C)   the increase in output is the same in both years.
D)   None of the above is necessarily correct.E) C) and D)
F) B) and C)

Question 10

Which of the following is an example of a produced factor of production?

Accepted Answer

A)   a plant in which automobiles are assembled
B)   skills that people accumulate in high school and college
C)   skills that people accumulate through experience in the workplace
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 11

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,275 a ton. Over the same time a measure of the overall price level increased from 150 to 156. The price of iron ore increased by

Accepted Answer

A)   less than inflation, so it became less scarce.
B)   less than inflation, so it became more scarce.
C)   more than inflation, so it became more scarce.
D)   more than inflation, so it became less scarce.E) None of the above
F) A) and B)

Question 12

Which of the following is a determinant of productivity?

Accepted Answer

A)   human capital per worker
B)   physical capital per worker
C)   natural resources per worker
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 13

Waldo works eight hours and produces 7 units of goods per hour. Emerson works six hours and produces 10 units of goods per hour.

Accepted Answer

A)   Waldo's productivity and output are greater than Emerson's.
B)   Waldo's productivity is greater than Emerson's but his output is less.
C)   Emerson's productivity and output are greater than Waldo's.
D)   Emerson's productivity is greater than Waldo's but his output is less.E) B) and C)
F) B) and D)

Question 14

An understanding of the best ways to produce goods and services is called

Accepted Answer

A)   human capital.
B)   physical capital.
C)   technology.
D)   productivity.E) None of the above
F) B) and C)

Question 15

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

Accepted Answer

A)   both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital.
B)   both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital.
C)   both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital.
D)   both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.E) All of the above
F) A) and D)

Question 16

Other things the same, if a country raises its saving rate, when is growth of real GDP per person higher?

Accepted Answer

A)   as the economy moves toward the long run and in the long run.
B)   as the economy moves toward the long run, but not in the long run.
C)   in the long run, but not as the economy moves toward the long run.
D)   neither as the economy moves toward the long run, nor in the long run.E) A) and C)
F) C) and D)

Question 17

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Accepted Answer

A)   human capital.
B)   physical capital.
C)   natural resources.
D)   technological knowledge.E) None of the above
F) A) and C)

Question 18

Productivity is the amount of goods and services

Accepted Answer

A)   an economy produces. It is not linked to a nation's economic policies.
B)   an economy produces. It is linked to a nation's economic policies.
C)   produced for each hour of a worker's time. It is not linked to a nation's economic policies.
D)   produced for each hour of a worker's time. It is linked to a nation's economic policies.E) None of the above
F) A) and D)

Question 19

In the United States in 2010 real GDP per person was about $47,000, while in some poor countries real GDP per person was less than $5,000.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following nations experienced average rates of economic growth of less than 2 percent over the last 100 years or so?

Accepted Answer

A)   Bangladesh
B)   Pakistan
C)   United Kingdom
D)   All of the above are correct.E) A) and B)
F) All of the above

Exam 7: Production and Growth

If over a short time there is an increase in the number of people retired and a decrease in the number of people working, then productivity

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Productivity

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Waldo works eight hours and produces 7 units of goods per hour. Emerson works six hours and produces 10 units of goods per hour.

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Which of the following is a determinant of productivity?

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Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N) . -Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then if we know the values of A, K/L, H/L, and N/L, we also know the value of

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In a market economy, scarcity of resources is most clearly reflected in

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In which of the following countries has economic growth been sufficiently high that income would double every ten years?

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The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

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An understanding of the best ways to produce goods and services is called

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In the United States in 2010 real GDP per person was about $47,000, while in some poor countries real GDP per person was less than $5,000.

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Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

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Productivity is the amount of goods and services

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Other things the same, if a country raises its saving rate, when is growth of real GDP per person higher?

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All else equal, if there are diminishing returns, then if a country raised its capital by 100 units last year and by 100 units this year,

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If an inexpensive alternative to oil were found, the price of oil adjusted for inflation

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Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,275 a ton. Over the same time a measure of the overall price level increased from 150 to 156. The price of iron ore increased by

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Which of the following nations experienced average rates of economic growth of less than 2 percent over the last 100 years or so?

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Which of the following is an example of a produced factor of production?

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Table 25-1. Athens and Troy both produce only ribs and baked potatoes. -Refer to Table 25-1. Which of the following is correct?

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In 2010, the typical Bangladeshi had about

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