Question 1

Which of the following is included in physical capital?

Accepted Answer

A)  roads and bridges 
B)  a university graduate in physics 
C)  an astrophysicist 
D)  a high school diploma or college degree 
E)  a successful entrepreneur 
A)  roads and bridges 
B)  a university graduate in physics 
C)  an astrophysicist 
D)  a high school diploma or college degree 
E)  a successful entrepreneur

Question 2

Why are poor countries poor?

Accepted Answer

A)  because they have more human capital 
B)  because they have more physical capital 
C)  because they experience high labor productivity 
D)  because they experience low labor productivity 
E)  because they experience bad weather 
A)  because they have more human capital 
B)  because they have more physical capital 
C)  because they experience high labor productivity 
D)  because they experience low labor productivity 
E)  because they experience bad weather

Question 3

Labor productivity tends to fall as the capital-to-labor ratio rises.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is assumed to be constant along a per-worker production function?

Accepted Answer

A)  output per worker 
B)  capital per worker 
C)  the level of technology 
D)  the amount of capital 
E)  the amount of output 
A)  output per worker 
B)  capital per worker 
C)  the level of technology 
D)  the amount of capital 
E)  the amount of output

Question 5

Suppose the production possibilities frontier (PPF) of an economy has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point outside the PPF represents _____

Accepted Answer

A)  a smaller quantity of consumer goods than that represented by a point inside the PPF. 
B)  an inefficient output combination of the two goods in the economy. 
C)  an unattainable output combination of the two goods in the economy. 
D)  an output combination of more consumer goods than capital goods. 
E)  a smaller quantity of capital goods than that represented by a point inside the PPF. 
A)  a smaller quantity of consumer goods than that represented by a point inside the PPF. 
B)  an inefficient output combination of the two goods in the economy. 
C)  an unattainable output combination of the two goods in the economy. 
D)  an output combination of more consumer goods than capital goods. 
E)  a smaller quantity of capital goods than that represented by a point inside the PPF.

Question 6

The growing use of computers led to a substantial increase in the overall U.S. productivity growth from 1995 to 2005.

Accepted Answer

A) True 
 B)False

Question 7

The output per capita of a country is equal to _____

Accepted Answer

A)  its population divided by its GDP. 
B)  its GDP divided by its population. 
C)  its population divided by its GNP. 
D)  its GNP divided by its population. 
E)  its GDP divided by the total value of capital available. 
A)  its population divided by its GDP. 
B)  its GDP divided by its population. 
C)  its population divided by its GNP. 
D)  its GNP divided by its population. 
E)  its GDP divided by the total value of capital available.

Question 8

Applied research _____

Accepted Answer

A)  is designed to answer particular questions. 
B)  is more open-ended than basic research. 
C)  contributes less to visible output changes than does basic research. 
D)  is research done by a firm to market a good. 
E)  is research done by a firm during the production of a good. 
A)  is designed to answer particular questions. 
B)  is more open-ended than basic research. 
C)  contributes less to visible output changes than does basic research. 
D)  is research done by a firm to market a good. 
E)  is research done by a firm during the production of a good.

Question 9

Many workers in developing countries are _____

Accepted Answer

A)  factory workers. 
B)  farmers. 
C)  white collar workers. 
D)  software engineers. 
E)  finance personnel. 
A)  factory workers. 
B)  farmers. 
C)  white collar workers. 
D)  software engineers. 
E)  finance personnel.

Question 10

Which of the following can expand the production possibilities frontier?

Accepted Answer

A)  improved patent laws 
B)  legal reforms that increase transaction costs 
C)  reductions in the length of patent protection 
D)  stringent tax laws for R&D companies 
E)  the advent of a labor-deepening technology 
A)  improved patent laws 
B)  legal reforms that increase transaction costs 
C)  reductions in the length of patent protection 
D)  stringent tax laws for R&D companies 
E)  the advent of a labor-deepening technology

Question 11

A small change in the rate of productivity growth will have _____

Accepted Answer

A)  a small impact on output in both the short run and the long run. 
B)  a large impact on output in both the short run and the long run. 
C)  a small impact on output in the short run but a large impact in the long run. 
D)  a large impact on output in the short run but a small impact in the long run. 
E)  no effect on output at all. 
A)  a small impact on output in both the short run and the long run. 
B)  a large impact on output in both the short run and the long run. 
C)  a small impact on output in the short run but a large impact in the long run. 
D)  a large impact on output in the short run but a small impact in the long run. 
E)  no effect on output at all.

Question 12

A point on the per-worker production function shows _____

Accepted Answer

A)  the total output produced by the labor force of an industry on the vertical axis for each level of capital per worker on the horizontal axis. 
B)  the marginal output per worker on the vertical axis for each level of worker per unit of capital on the horizontal axis. 
C)  the marginal output per worker on the vertical axis for each level of capital per worker on the horizontal axis. 
D)  the level of capital per worker on the vertical axis for respective average output per worker on the horizontal axis. 
E)  the average output per worker on the vertical axis for each level of capital per worker on the horizontal axis. 
A)  the total output produced by the labor force of an industry on the vertical axis for each level of capital per worker on the horizontal axis. 
B)  the marginal output per worker on the vertical axis for each level of worker per unit of capital on the horizontal axis. 
C)  the marginal output per worker on the vertical axis for each level of capital per worker on the horizontal axis. 
D)  the level of capital per worker on the vertical axis for respective average output per worker on the horizontal axis. 
E)  the average output per worker on the vertical axis for each level of capital per worker on the horizontal axis.

Question 13

The per capita output of an economy is likely to increase if _____

Accepted Answer

A)  the number of workers in the economy grows faster than its population. 
B)  the population of the country grows faster than its labor force. 
C)  the government increases the tax rates. 
D)  the government controls the number of illegal immigrant workers in the economy. 
E)  the government manages the foreign investment in the economy. 
A)  the number of workers in the economy grows faster than its population. 
B)  the population of the country grows faster than its labor force. 
C)  the government increases the tax rates. 
D)  the government controls the number of illegal immigrant workers in the economy. 
E)  the government manages the foreign investment in the economy.

Question 14

The slope of the per-worker production function diminishes as the amount of capital per worker increases. This is a reflection of the law of _____

Accepted Answer

A)  increasing marginal returns. 
B)  diminishing marginal returns. 
C)  constant marginal returns. 
D)  first diminishing and then increasing marginal returns. 
E)  demand. 
A)  increasing marginal returns. 
B)  diminishing marginal returns. 
C)  constant marginal returns. 
D)  first diminishing and then increasing marginal returns. 
E)  demand.

Question 15

Workers displaced due to technological change usually find it difficult to get new jobs.

Accepted Answer

A) True 
 B)False

Question 16

If the growth rate of employment is positive but labor productivity remains unchanged, which of the following is likely to happen?

Accepted Answer

A)  The per-worker production function will rotate upward. 
B)  Real GDP will decrease. 
C)  Real GDP will remain constant. 
D)  The per-worker production function will rotate downward. 
E)  Real GDP will increase. 
A)  The per-worker production function will rotate upward. 
B)  Real GDP will decrease. 
C)  Real GDP will remain constant. 
D)  The per-worker production function will rotate downward. 
E)  Real GDP will increase.

Question 17

Which of the following is not included in the rules of the game?

Accepted Answer

A)  the laws, customs, conventions, and other institutional elements associated with trade 
B)  property rights 
C)  the stock of natural resources 
D)  a stable political environment 
E)  a stable legal system 
A)  the laws, customs, conventions, and other institutional elements associated with trade 
B)  property rights 
C)  the stock of natural resources 
D)  a stable political environment 
E)  a stable legal system

Question 18

According to Nobel Laureate Simon Kuznets, the greatest increase in output and economic growth comes from changes in the _____

Accepted Answer

A)  quantity of loanable funds. 
B)  quantity of natural resources (land). 
C)  quantity of labor. 
D)  quality of resources. 
E)  quantity of capital. 
A)  quantity of loanable funds. 
B)  quantity of natural resources (land). 
C)  quantity of labor. 
D)  quality of resources. 
E)  quantity of capital.

Question 19

Empirical evidence suggests that _____

Accepted Answer

A)  technological change leads to higher unemployment rates. 
B)  the unemployment rate in the United States in the late 1990s was lower than that in the 1970s. 
C)  the unemployment rate in the United States in the late 1990s was higher than that in the 1970s. 
D)  changes in the growth rate of the population lead to higher unemployment rates. 
E)  increase in government regulation leads to higher unemployment rates. 
A)  technological change leads to higher unemployment rates. 
B)  the unemployment rate in the United States in the late 1990s was lower than that in the 1970s. 
C)  the unemployment rate in the United States in the late 1990s was higher than that in the 1970s. 
D)  changes in the growth rate of the population lead to higher unemployment rates. 
E)  increase in government regulation leads to higher unemployment rates.

Question 20

Exhibit 8.3
  
-An increase in the amount of capital per worker always increases the value of output.

Accepted Answer

A) True 
 B)False

Which of the following is included in physical capital?

Why are poor countries poor?

Labor productivity tends to fall as the capital-to-labor ratio rises.

Which of the following is assumed to be constant along a per-worker production function?

Suppose the production possibilities frontier (PPF) of an economy has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point outside the PPF represents _____

The growing use of computers led to a substantial increase in the overall U.S. productivity growth from 1995 to 2005.

The output per capita of a country is equal to _____

Applied research _____

Many workers in developing countries are _____

Which of the following can expand the production possibilities frontier?

A small change in the rate of productivity growth will have _____

A point on the per-worker production function shows _____

The per capita output of an economy is likely to increase if _____

The slope of the per-worker production function diminishes as the amount of capital per worker increases. This is a reflection of the law of _____

Workers displaced due to technological change usually find it difficult to get new jobs.

If the growth rate of employment is positive but labor productivity remains unchanged, which of the following is likely to happen?

Which of the following is not included in the rules of the game?

According to Nobel Laureate Simon Kuznets, the greatest increase in output and economic growth comes from changes in the _____

Empirical evidence suggests that _____

Exhibit 8.3 -An increase in the amount of capital per worker always increases the value of output.

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exam 8: Productivity and Growth.

Which of the following is included in physical capital?

Why are poor countries poor?

Labor productivity tends to fall as the capital-to-labor ratio rises.

Which of the following is assumed to be constant along a per-worker production function?

Suppose the production possibilities frontier (PPF) of an economy has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point outside the PPF represents _____

The growing use of computers led to a substantial increase in the overall U.S. productivity growth from 1995 to 2005.

The output per capita of a country is equal to _____

Applied research _____

Many workers in developing countries are _____

Which of the following can expand the production possibilities frontier?

A small change in the rate of productivity growth will have _____

A point on the per-worker production function shows _____

The per capita output of an economy is likely to increase if _____

The slope of the per-worker production function diminishes as the amount of capital per worker increases. This is a reflection of the law of _____

Workers displaced due to technological change usually find it difficult to get new jobs.

If the growth rate of employment is positive but labor productivity remains unchanged, which of the following is likely to happen?

Which of the following is not included in the rules of the game?

According to Nobel Laureate Simon Kuznets, the greatest increase in output and economic growth comes from changes in the _____

Empirical evidence suggests that _____

Exhibit 8.3 -An increase in the amount of capital per worker always increases the value of output.

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters