Question 1

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. 
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.

Question 2

Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct?

Accepted Answer

A) Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. 
B) Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. 
C) Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. 
D) Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has. 
A) Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. 
B) Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. 
C) Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. 
D) Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has.

Question 3

Consider the production function   
. Suppose   
and   
. Does the production function have the property of constant returns to scale? Why or why not?

Accepted Answer

Yes, the production function has the pro

Question 4

Historically, the market prices of most natural resources (adjusted for inflation) have

Accepted Answer

A) increased. 
B) remained stable. 
C) remained stable or decreased. 
D) decreased. 
A) increased. 
B) remained stable. 
C) remained stable or decreased. 
D) decreased.

Question 5

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Accepted Answer

A) both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. 
B) both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. 
C) both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. 
D) both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia. 
A) both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. 
B) both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. 
C) both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. 
D) both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.

Question 6

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 3,000 work 7 hours a day to produce a total of 105,000 final goods.

Accepted Answer

A) Workland has higher productivity and higher real GDP per person than Laborland. 
B) Workland has higher productivity but lower real GDP per person than Laborland. 
C) Workland has lower productivity but higher real GDP per person than Laborland. 
D) Workland has lower productivity and lower real GDP per person than Laborland. 
A) Workland has higher productivity and higher real GDP per person than Laborland. 
B) Workland has higher productivity but lower real GDP per person than Laborland. 
C) Workland has lower productivity but higher real GDP per person than Laborland. 
D) Workland has lower productivity and lower real GDP per person than Laborland.

Question 7

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Accepted Answer

A) both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. 
B) both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. 
C) both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. 
D) both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia. 
A) both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. 
B) both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. 
C) both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. 
D) both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.

Question 8

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over about the last 120 years?

Accepted Answer

A) Germany and Japan 
B) Indonesia and Bangladesh 
C) the United States and Argentina 
D) Mexico and Pakistan 
A) Germany and Japan 
B) Indonesia and Bangladesh 
C) the United States and Argentina 
D) Mexico and Pakistan

Question 9

Mary looks over reports on four of her workers. Jack made 30 baskets in 5 hours. Rudy made 32 baskets in 8 hours. Sam made 40 baskets in 12 hours. Walter made 22 baskets in four hours. Who has the greatest productivity?

Accepted Answer

A) Jack 
B) Rudy 
C) Sam 
D) Walter 
A) Jack 
B) Rudy 
C) Sam 
D) Walter

Question 10

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. 
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.

Question 11

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

A) education 
B) research and development 
C) nutrition 
D) trade restrictions 
A) education 
B) research and development 
C) nutrition 
D) trade restrictions

Question 12

A forest is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 13

Other things the same, higher population growth

Accepted Answer

A) raises the amount of physical capital per worker and there is some evidence that it raises the pace of technological progress. 
B) raises the amount of physical capital per worker, but there is some evidence that it reduces the pace of technological progress. 
C) reduces the amount of physical capital per worker, but there is some evidence that it raises the pace of technological progress. 
D) reduces the amount of physical capital per worker and there is some evidence that it reduces the pace of technological progress. 
A) raises the amount of physical capital per worker and there is some evidence that it raises the pace of technological progress. 
B) raises the amount of physical capital per worker, but there is some evidence that it reduces the pace of technological progress. 
C) reduces the amount of physical capital per worker, but there is some evidence that it raises the pace of technological progress. 
D) reduces the amount of physical capital per worker and there is some evidence that it reduces the pace of technological progress.

Question 14

Which country has had a higher growth rate than the US over about the last 120 years?

Accepted Answer

A) Argentina 
B) Germany 
C) the United Kingdom 
D) None of the above is correct. 
A) Argentina 
B) Germany 
C) the United Kingdom 
D) None of the above is correct.

Question 15

Which of the following statements is correct?

Accepted Answer

A) Human capital per worker is a determinant of productivity. 
B) A nation cannot be highly productive in producing goods and services without abundant quantities of natural resources. 
C) Human capital and technological knowledge are the same thing. 
D) All technological knowledge is proprietary. 
A) Human capital per worker is a determinant of productivity. 
B) A nation cannot be highly productive in producing goods and services without abundant quantities of natural resources. 
C) Human capital and technological knowledge are the same thing. 
D) All technological knowledge is proprietary.

Question 16

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Accepted Answer

A) all three countries will grow at the same rate. 
B) Country A will grow the fastest. 
C) Country B will grow the fastest. 
D) Country C will grow the fastest. 
A) all three countries will grow at the same rate. 
B) Country A will grow the fastest. 
C) Country B will grow the fastest. 
D) Country C will grow the fastest.

Question 17

Which list contains, in this order, a country whose real GDP per person grew faster and one whose real GDP per person grew slower than real GDP per person in the U.S. over about the last 100 years?

Accepted Answer

A) Bangladesh, India 
B) China, United Kingdom 
C) Japan, Brazil 
D) Pakistan, Mexico 
A) Bangladesh, India 
B) China, United Kingdom 
C) Japan, Brazil 
D) Pakistan, Mexico

Question 18

Despite its status as one of the richest countries in the world, Japan

Accepted Answer

A) has a very low level of productivity. 
B) has few natural resources. 
C) has very little human capital. 
D) engages in a relatively small amount of international trade. 
A) has a very low level of productivity. 
B) has few natural resources. 
C) has very little human capital. 
D) engages in a relatively small amount of international trade.

Question 19

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

A) 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. 
B) 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. 
C) 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger. 
D) 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger. 
A) 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. 
B) 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. 
C) 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger. 
D) 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger.

Question 20

According to some estimates, over the last two decades China has had an annual average growth rate of about 12 percent.

Accepted Answer

A) True 
 B)False

Exam 25: Production and Growth

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

Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct?

Consider the production function . Suppose and . Does the production function have the property of constant returns to scale? Why or why not?

Historically, the market prices of most natural resources (adjusted for inflation) have

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 3,000 work 7 hours a day to produce a total of 105,000 final goods.

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over about the last 120 years?

Mary looks over reports on four of her workers. Jack made 30 baskets in 5 hours. Rudy made 32 baskets in 8 hours. Sam made 40 baskets in 12 hours. Walter made 22 baskets in four hours. Who has the greatest productivity?

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

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

A forest is an example of a nonrenewable resource.

Other things the same, higher population growth

Which country has had a higher growth rate than the US over about the last 120 years?

Which of the following statements is correct?

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Which list contains, in this order, a country whose real GDP per person grew faster and one whose real GDP per person grew slower than real GDP per person in the U.S. over about the last 100 years?

Despite its status as one of the richest countries in the world, Japan

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

According to some estimates, over the last two decades China has had an annual average growth rate of about 12 percent.

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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