Question 1

Which of the following is an example of physical capital?

Accepted Answer

A) the strength of workers 
B) on the job training 
C) financial assets like cash and bonds 
D) the equipment in a factory 
A) the strength of workers 
B) on the job training 
C) financial assets like cash and bonds 
D) the equipment in a factory

Question 2

Phoenix furniture uses 12 workers, each working eight hours, to produce 192 rocking chairs. What is Phoenix's productivity?

Accepted Answer

A) 192 rocking chairs 
B) 24 rocking chairs per hour 
C) 2 rocking chairs per hour 
D) 2 hours per rocking chair 
A) 192 rocking chairs 
B) 24 rocking chairs per hour 
C) 2 rocking chairs per hour 
D) 2 hours per rocking chair

Question 3

The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because

Accepted Answer

A) some of the income from the factory accrues to people who do not live in Algeria. 
B) gross domestic product is income earned within a country by both residents and nonresidents, whereas gross national product is the income earned by residents of a country while producing both at home and abroad. 
C) all of the income from the factory is included in Algeria's GDP. 
D) All of the above are correct. 
A) some of the income from the factory accrues to people who do not live in Algeria. 
B) gross domestic product is income earned within a country by both residents and nonresidents, whereas gross national product is the income earned by residents of a country while producing both at home and abroad. 
C) all of the income from the factory is included in Algeria's GDP. 
D) All of the above are correct.

Question 4

Which of the following is an example of a renewable natural resource?

Accepted Answer

A) fish 
B) soybeans 
C) wood 
D) All of the above are correct. 
A) fish 
B) soybeans 
C) wood 
D) All of the above are correct.

Question 5

Country A and country B both increase their capital stock by one unit. Output in country A increases by 12 while output in country B increases by 15. Other things the same, diminishing returns implies that country A is

Accepted Answer

A) richer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units. 
B) richer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units. 
C) poorer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units. 
D) poorer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units. 
A) richer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units. 
B) richer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units. 
C) poorer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units. 
D) poorer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units.

Question 6

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. 
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.

Question 7

In 2011 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2012 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day. Productivity at Buckeye Brewing

Accepted Answer

A) increased by 20%. 
B) increased by 16.67%. 
C) decreased by 1.67%. 
D) decreased by 40%. 
A) increased by 20%. 
B) increased by 16.67%. 
C) decreased by 1.67%. 
D) decreased by 40%.

Question 8

Which of the following is an example of human capital?

Accepted Answer

A) a student loan 
B) knowledge learned from reading books 
C) training videos for new corporate employees 
D) All of the above are correct. 
A) a student loan 
B) knowledge learned from reading books 
C) training videos for new corporate employees 
D) All of the above are correct.

Question 9

According to studies using international data, an increase in the saving rate

Accepted Answer

A) does not increase the growth rate of output. 
B) increases the growth rate of output for a few years. 
C) increases the growth rate of output for about a decade. 
D) increases the growth rate of output for several decades. 
A) does not increase the growth rate of output. 
B) increases the growth rate of output for a few years. 
C) increases the growth rate of output for about a decade. 
D) increases the growth rate of output for several decades.

Question 10

Human capital

Accepted Answer

A) can be thought of, metaphorically, as the quality of society's textbooks, whereas technological knowledge can be thought of as the time that the population has devoted to reading textbooks. 
B) is more tangible than physical capital. 
C) is an input in the production of goods and services. 
D) is the same as the quantity of labor. 
A) can be thought of, metaphorically, as the quality of society's textbooks, whereas technological knowledge can be thought of as the time that the population has devoted to reading textbooks. 
B) is more tangible than physical capital. 
C) is an input in the production of goods and services. 
D) is the same as the quantity of labor.

Question 11

Which of the following is an example of the "brain drain?"

Accepted Answer

A) A country's most highly educated workers emigrate to rich countries. 
B) A country has such a poor educational system that human capital falls over time. 
C) The population of a country grows so fast that the educational system can't keep up. 
D) A country steals patented technology from another country. 
A) A country's most highly educated workers emigrate to rich countries. 
B) A country has such a poor educational system that human capital falls over time. 
C) The population of a country grows so fast that the educational system can't keep up. 
D) A country steals patented technology from another country.

Question 12

In countries where women are discriminated against, policies that increase the likelihood of career success and educational opportunities for women are likely to decrease the birth rate.

Accepted Answer

A) True 
 B)False

Question 13

Proprietary technology is technology

Accepted Answer

A) that the government prohibits firms from using. 
B) conserves natural resources. 
C) that is useful while other types of technology are outdated. 
D) that is known or controlled only by the company that discovered it. 
A) that the government prohibits firms from using. 
B) conserves natural resources. 
C) that is useful while other types of technology are outdated. 
D) that is known or controlled only by the company that discovered it.

Question 14

A professor at a university finds a way to reduce the costs of producing automobile glass. The method is very easy for anyone to copy. A company develops a substance which prevents eyeglasses from smudging. It receives a patent on the formula. Which of these are common technological knowledge?

Accepted Answer

A) the method to reduce costs of producing automobile glass, and the formula for the substance that prevents smudging 
B) the method to reduce costs of producing automobile glass, but not the formula for the substance that prevents smudging 
C) the formula for the substance that prevents smudging, but not the method to reduce costs of producing automobile glass 
D) neither the method to reduce costs of producing automobile glass nor the formula for the substance that prevents smudging 
A) the method to reduce costs of producing automobile glass, and the formula for the substance that prevents smudging 
B) the method to reduce costs of producing automobile glass, but not the formula for the substance that prevents smudging 
C) the formula for the substance that prevents smudging, but not the method to reduce costs of producing automobile glass 
D) neither the method to reduce costs of producing automobile glass nor the formula for the substance that prevents smudging

Question 15

Inward-oriented policies

Accepted Answer

A) include imposing tariffs and other trade restrictions. 
B) have generally increased productivity and growth in the countries that pursued them. 
C) promote the production of goods and services that the country produces most efficiently. 
D) All of the above are correct. 
A) include imposing tariffs and other trade restrictions. 
B) have generally increased productivity and growth in the countries that pursued them. 
C) promote the production of goods and services that the country produces most efficiently. 
D) All of the above are correct.

Question 16

"Market prices give no reason to believe that natural resources are a limit to economic growth." Explain this statement.

Accepted Answer

If the world were running out of natural

Question 17

Which of the following countries had the highest growth rate over about the last 100 years?

Accepted Answer

A) Japan 
B) China 
C) Germany 
D) United States 
A) Japan 
B) China 
C) Germany 
D) United States

Question 18

John and Miguel are fishermen. When they go fishing, John consistently catches 2 or 3 fish per hour, while Miguel consistently catches 5 or 6 fish per hour. Miguel's __________ exceeds that of John.

Accepted Answer

The answer of John and Miguel are fishermen. When they...

Question 19

Like physical capital, human capital is a produced factor of production.

Accepted Answer

A) True 
 B)False

Question 20

Dilbert's Incorporated produced 5,000,000 units of accounting software in 2010. At the start of 2011 the pointy-haired boss reduced total annual hours of employment from 10,000 to 8,000 and production was 4,800,000. These numbers indicate that productivity

Accepted Answer

A) fell by 4%. 
B) fell by 20%. 
C) rose by 12%. 
D) rose by 20%. 
A) fell by 4%. 
B) fell by 20%. 
C) rose by 12%. 
D) rose by 20%.

Exam 25: Production and Growth

Which of the following is an example of physical capital?

Phoenix furniture uses 12 workers, each working eight hours, to produce 192 rocking chairs. What is Phoenix's productivity?

The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because

Which of the following is an example of a renewable natural resource?

Country A and country B both increase their capital stock by one unit. Output in country A increases by 12 while output in country B increases by 15. Other things the same, diminishing returns implies that country A is

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

In 2011 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2012 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day. Productivity at Buckeye Brewing

Which of the following is an example of human capital?

According to studies using international data, an increase in the saving rate

Human capital

Which of the following is an example of the "brain drain?"

In countries where women are discriminated against, policies that increase the likelihood of career success and educational opportunities for women are likely to decrease the birth rate.

Proprietary technology is technology

A professor at a university finds a way to reduce the costs of producing automobile glass. The method is very easy for anyone to copy. A company develops a substance which prevents eyeglasses from smudging. It receives a patent on the formula. Which of these are common technological knowledge?

Inward-oriented policies

"Market prices give no reason to believe that natural resources are a limit to economic growth." Explain this statement.

Which of the following countries had the highest growth rate over about the last 100 years?

John and Miguel are fishermen. When they go fishing, John consistently catches 2 or 3 fish per hour, while Miguel consistently catches 5 or 6 fish per hour. Miguel's __________ exceeds that of John.

Like physical capital, human capital is a produced factor of production.

Dilbert's Incorporated produced 5,000,000 units of accounting software in 2010. At the start of 2011 the pointy-haired boss reduced total annual hours of employment from 10,000 to 8,000 and production was 4,800,000. These numbers indicate that productivity

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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