Question 1

Investment in human capital has opportunity costs,but investment in physical capital does not.

Accepted Answer

A) True 
 B)False

Question 2

Technological knowledge refers to

Accepted Answer

A) human capital. 
B) available information on how to produce things. 
C) resources expended transmitting society's understanding to the labor force. 
D) All of the above are technological knowledge. 
A) human capital. 
B) available information on how to produce things. 
C) resources expended transmitting society's understanding to the labor force. 
D) All of the above are technological knowledge.

Question 3

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor.What was their productivity?

Accepted Answer

A) 1/8 cabinet per hour 
B) 8 hours per cabinet 
C) 40 cabinets 
D) None of the above is correct. 
A) 1/8 cabinet per hour 
B) 8 hours per cabinet 
C) 40 cabinets 
D) None of the above is correct.

Question 4

Which of the following is true?

Accepted Answer

A) Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue.Malthus argued that increasing population would outstrip agricultural production. 
B) Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
C) Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue.Kremer argued that increasing population would outstrip agricultural production. 
D) Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
A) Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue.Malthus argued that increasing population would outstrip agricultural production. 
B) Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
C) Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue.Kremer argued that increasing population would outstrip agricultural production. 
D) Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.

Question 5

Income in developing countries like India and Indonesia

Accepted Answer

A) is less than 1/7th of that in developed countries like Japan and the United States. 
B) is about 1/5th of that in developed countries like Japan and the United States. 
C) is about 1/3 of that in developed countries like Japan and the United States. 
D) is about 1/2 of that in developed countries like Japan and the United States. 
A) is less than 1/7th of that in developed countries like Japan and the United States. 
B) is about 1/5th of that in developed countries like Japan and the United States. 
C) is about 1/3 of that in developed countries like Japan and the United States. 
D) is about 1/2 of that in developed countries like Japan and the United States.

Question 6

Which of the following is considered human capital?

Accepted Answer

A) knowledge acquired from early childhood education programs 
B) knowledge acquired from grade school 
C) knowledge acquired from on-the-job training 
D) All of the above are correct. 
A) knowledge acquired from early childhood education programs 
B) knowledge acquired from grade school 
C) knowledge acquired from on-the-job training 
D) All of the above are correct.

Question 7

Suppose that an American opens and operates a candy factory in Finland.This is an example of

Accepted Answer

A) foreign direct investment.American saving is used to finance Finish investment. 
B) foreign direct investment.American saving is used to finance American investment. 
C) foreign portfolio investment.American saving is used to finance Finish investment. 
D) foreign portfolio investment.American saving is used to finance American investment. 
A) foreign direct investment.American saving is used to finance Finish investment. 
B) foreign direct investment.American saving is used to finance American investment. 
C) foreign portfolio investment.American saving is used to finance Finish investment. 
D) foreign portfolio investment.American saving is used to finance American investment.

Question 8

Over the period 1960-1991,

Accepted Answer

A) South Korea had a higher growth rate than the United States because it had a higher ratio of investment to GDP. 
B) The United States had a higher growth rate than South Korea because it had a higher ratio of investment to GDP. 
C) South Korea had a higher growth rate than the United States even though it had a similar ratio of investment to GDP. 
D) The United States had a higher growth rate than South Korea even though it had a similar ratio of investment to real GDP. 
A) South Korea had a higher growth rate than the United States because it had a higher ratio of investment to GDP. 
B) The United States had a higher growth rate than South Korea because it had a higher ratio of investment to GDP. 
C) South Korea had a higher growth rate than the United States even though it had a similar ratio of investment to GDP. 
D) The United States had a higher growth rate than South Korea even though it had a similar ratio of investment to real GDP.

Question 9

In the country of Krypton,the price of lead increased from $20 per pound to $21 per pound during a time when the overall price level increased by 5 percent.During this period,the real price of lead

Accepted Answer

A) increased. 
B) decreased. 
C) stayed the same. 
D) might have increased, decreased or stayed the same; more information is needed to be sure. 
A) increased. 
B) decreased. 
C) stayed the same. 
D) might have increased, decreased or stayed the same; more information is needed to be sure.

Question 10

National defense and knowledge are generally considered to be

Accepted Answer

A) private goods. 
B) public goods. 
C) proprietary goods. 
D) societal goods. 
A) private goods. 
B) public goods. 
C) proprietary goods. 
D) societal goods.

Question 11

Historical trends in the prices of most natural resources compared to other goods indicate that natural resources became scarcer over time.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is correct?

Accepted Answer

A) If a relatively poor country had grown at 3.5 percent per year for the last 100 years, it would be a relatively rich country today. 
B) International data on the history of the growth of real GDP per person shows that the rich countries get richer and the poor countries get poorer. 
C) In the United States, average income today is about four times as high as average income a century ago. 
D) All of the above are correct. 
A) If a relatively poor country had grown at 3.5 percent per year for the last 100 years, it would be a relatively rich country today. 
B) International data on the history of the growth of real GDP per person shows that the rich countries get richer and the poor countries get poorer. 
C) In the United States, average income today is about four times as high as average income a century ago. 
D) All of the above are correct.

Question 13

You bake cookies.One day you double the time you spend,double the number of chocolate chips,flour,eggs,and all your other inputs,and bake twice as many cookies.Your cookie production function has

Accepted Answer

A) decreasing returns to scale. 
B) zero returns to scale. 
C) constant returns to scale. 
D) increasing returns to scale. 
A) decreasing returns to scale. 
B) zero returns to scale. 
C) constant returns to scale. 
D) increasing returns to scale.

Question 14

Educated people may generate ideas that increase production.These ideas

Accepted Answer

A) produce a return to society from education that is greater than the return to the individual. 
B) could justify government subsides for education. 
C) are external benefits of education. 
D) All of the above are correct. 
A) produce a return to society from education that is greater than the return to the individual. 
B) could justify government subsides for education. 
C) are external benefits of education. 
D) All of the above are correct.

Question 15

Presidents of the African countries of Mali and Burkina Faso were particularly concerned with subsidies richer countries provide for domestic production of

Accepted Answer

A) oil. 
B) tobacco. 
C) gold. 
D) cotton. 
A) oil. 
B) tobacco. 
C) gold. 
D) cotton.

Question 16

After adjusting for inflation,over time the prices of most natural resources have been

Accepted Answer

A) steady or falling, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling. 
B) steady or falling, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing. 
C) rising, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling. 
D) rising, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing. 
A) steady or falling, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling. 
B) steady or falling, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing. 
C) rising, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling. 
D) rising, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing.

Question 17

The average amount of goods and services produced from each hour of a worker's time is called

Accepted Answer

A) per capita GDP 
B) per capita GNP 
C) productivity 
D) human capital 
A) per capita GDP 
B) per capita GNP 
C) productivity 
D) human capital

Question 18

Use the data on U.S.real GDP below to compute real GDP per person for each year.Then use these numbers to compute the percentage increase in real GDP per person from 1987 to 2005.

Accepted Answer

Real GDP per person in 1987 wa

Question 19

All else equal,which of the following would tend to cause real GDP per person to rise?

Accepted Answer

A) Changing policy from outward to inward oriented. 
B) Investment in human capital. 
C) In the short-term, effects of a rapid growth in the number of workers. 
D) All of the above are correct. 
A) Changing policy from outward to inward oriented. 
B) Investment in human capital. 
C) In the short-term, effects of a rapid growth in the number of workers. 
D) All of the above are correct.

Question 20

Greater scarcity of a natural resource is indicated

Accepted Answer

A) by any increase in the price whether the price increase is less than or greater than the rate of inflation. 
B) only by any increase in the price which is less than the rate of inflation. 
C) only by any increase in the price which is greater than the rate of inflation. 
D) only by an increase in price which is caused by a decrease in supply and is greater than the rate of inflation. 
A) by any increase in the price whether the price increase is less than or greater than the rate of inflation. 
B) only by any increase in the price which is less than the rate of inflation. 
C) only by any increase in the price which is greater than the rate of inflation. 
D) only by an increase in price which is caused by a decrease in supply and is greater than the rate of inflation.

Exam 25: Production and Growth

Investment in human capital has opportunity costs,but investment in physical capital does not.

Technological knowledge refers to

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor.What was their productivity?

Which of the following is true?

Income in developing countries like India and Indonesia

Which of the following is considered human capital?

Suppose that an American opens and operates a candy factory in Finland.This is an example of

Over the period 1960-1991,

In the country of Krypton,the price of lead increased from $20 per pound to $21 per pound during a time when the overall price level increased by 5 percent.During this period,the real price of lead

National defense and knowledge are generally considered to be

Historical trends in the prices of most natural resources compared to other goods indicate that natural resources became scarcer over time.

Which of the following is correct?

You bake cookies.One day you double the time you spend,double the number of chocolate chips,flour,eggs,and all your other inputs,and bake twice as many cookies.Your cookie production function has

Educated people may generate ideas that increase production.These ideas

Presidents of the African countries of Mali and Burkina Faso were particularly concerned with subsidies richer countries provide for domestic production of

After adjusting for inflation,over time the prices of most natural resources have been

The average amount of goods and services produced from each hour of a worker's time is called

Use the data on U.S.real GDP below to compute real GDP per person for each year.Then use these numbers to compute the percentage increase in real GDP per person from 1987 to 2005.

All else equal,which of the following would tend to cause real GDP per person to rise?

Greater scarcity of a natural resource is indicated

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: 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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

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 Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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