Question 1

Other things equal,relatively poor countries tend to grow

Accepted Answer

A) slower than relatively rich countries; this is called the poverty trap. 
B) slower than relatively rich countries; this is called the fall-behind effect. 
C) faster than relatively rich countries; this is called the catch-up effect. 
D) faster than relatively rich countries; this is called the constant-returns-to-scale effect. 
A) slower than relatively rich countries; this is called the poverty trap. 
B) slower than relatively rich countries; this is called the fall-behind effect. 
C) faster than relatively rich countries; this is called the catch-up effect. 
D) faster than relatively rich countries; this is called the constant-returns-to-scale effect.

Question 2

Which of the following countries benefited a lot from the catch-up effect in the last half of the twentieth century?

Accepted Answer

A) Ethiopia 
B) the United States 
C) Canada 
D) South Korea 
A) Ethiopia 
B) the United States 
C) Canada 
D) South Korea

Question 3

Average income has been stagnant for many years in

Accepted Answer

A) Ireland. 
B) Singapore. 
C) Ethiopia. 
D) All of the above are correct. 
A) Ireland. 
B) Singapore. 
C) Ethiopia. 
D) All of the above are correct.

Question 4

Suppose that a new government is elected in Tempestia.The new government takes steps toward improving the court system and reducing government corruption.The citizens of Tempestia find these efforts credible and outsiders believe these changes will be effective and long lasting.These changes will probably

Accepted Answer

A) raise real GDP per person and productivity in Tempestia. 
B) raise real GDP per person but not productivity in Tempestia. 
C) raise productivity but not real GDP per person in Tempestia. 
D) raise neither productivity nor real GDP per person in Tempestia. 
A) raise real GDP per person and productivity in Tempestia. 
B) raise real GDP per person but not productivity in Tempestia. 
C) raise productivity but not real GDP per person in Tempestia. 
D) raise neither productivity nor real GDP per person in Tempestia.

Question 5

In medieval Europe an important technological advance was the use of the padded horse collar for plowing.Once this idea was thought of,other people used it.This illustrates that knowledge is generally a

Accepted Answer

A) public good. 
B) societal good. 
C) private good. 
D) normal good. 
A) public good. 
B) societal good. 
C) private good. 
D) normal good.

Question 6

Suppose U.S.-based Intel Corporation builds and operates a new computer chip factory in Honduras.Future production from such an investment would

Accepted Answer

A) increase Honduran GDP more than it would increase Honduran GNP. 
B) increase Honduran GNP more than it would increase Honduran GDP. 
C) not affect Honduran GNP, but would increase Honduran GDP. 
D) have no affect on either Honduran GDP or GNP. 
A) increase Honduran GDP more than it would increase Honduran GNP. 
B) increase Honduran GNP more than it would increase Honduran GDP. 
C) not affect Honduran GNP, but would increase Honduran GDP. 
D) have no affect on either Honduran GDP or GNP.

Question 7

Which of the following does the level of real GDP measure?

Accepted Answer

A) total real income 
B) productivity 
C) the standard of living 
D) All of the above are correct. 
A) total real income 
B) productivity 
C) the standard of living 
D) All of the above are correct.

Question 8

A management professor discovers a way for corporate management to operate more efficiently.He publishes his findings in a journal.His findings are

Accepted Answer

A) proprietary and common knowledge. 
B) neither proprietary nor common knowledge. 
C) proprietary, but not common, knowledge. 
D) common, but not proprietary, knowledge. 
A) proprietary and common knowledge. 
B) neither proprietary nor common knowledge. 
C) proprietary, but not common, knowledge. 
D) common, but not proprietary, knowledge.

Question 9

Countries with high population growth rates tend to have lower levels of educational attainment.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a correct way to measure productivity?

Accepted Answer

A) divide the number of hours worked by output 
B) divide output by the number of hours worked 
C) compute output growth 
D) divide the change in output by the change in number of hours worked 
A) divide the number of hours worked by output 
B) divide output by the number of hours worked 
C) compute output growth 
D) divide the change in output by the change in number of hours worked

Question 11

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

Question 12

Which of the following is an example of a renewable resources?

Accepted Answer

A) fish 
B) iron 
C) petroleum 
D) All of the above are correct. 
A) fish 
B) iron 
C) petroleum 
D) All of the above are correct.

Question 13

In the United States real GDP per person is about $37,500,while in some poor countries real GDP per person is less than $3,500.

Accepted Answer

A) True 
 B)False

Question 14

A rapid increase in the number of workers,other things the same,is likely in the short term to

Accepted Answer

A) raise real GDP per person, but decrease real GDP. 
B) decrease both real GDP and real GDP per person. 
C) raise both real GDP and real GDP per person. 
D) raise real GDP, but decrease real GDP per person. 
A) raise real GDP per person, but decrease real GDP. 
B) decrease both real GDP and real GDP per person. 
C) raise both real GDP and real GDP per person. 
D) raise real GDP, but decrease real GDP per person.

Question 15

Drug companies can usually obtain patents on new drugs.This turns new ideas into

Accepted Answer

A) private goods, and increase the incentive to engage in research. 
B) private goods, but decrease the incentive to engage in research. 
C) public goods, and increase the incentive to engage in research. 
D) public goods, and decrease the incentive to engage in research. 
A) private goods, and increase the incentive to engage in research. 
B) private goods, but decrease the incentive to engage in research. 
C) public goods, and increase the incentive to engage in research. 
D) public goods, and decrease the incentive to engage in research.

Question 16

Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth?

Accepted Answer

A) A country with no or few domestic natural resources is destined to be poor. 
B) Differences in natural resources have virtually no role in explaining differences in standards of living. 
C) Some countries can be rich mostly because of their natural resources and countries without natural resources need not be poor, but can never have very high standards of living. 
D) Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living. 
A) A country with no or few domestic natural resources is destined to be poor. 
B) Differences in natural resources have virtually no role in explaining differences in standards of living. 
C) Some countries can be rich mostly because of their natural resources and countries without natural resources need not be poor, but can never have very high standards of living. 
D) Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living.

Question 17

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology.Yet many economists believe that patents generate growth.Explain why.

Accepted Answer

Once someone comes up with an idea it is

Question 18

If your firm has constant returns to scale,then if you doubled all your inputs your firm's output would

Accepted Answer

A) not change. 
B) increase, but by less than double. 
C) double. 
D) more than double. 
A) not change. 
B) increase, but by less than double. 
C) double. 
D) more than double.

Question 19

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. 
A) human capital. 
B) physical capital. 
C) natural resources. 
D) technological knowledge.

Question 20

During the past century the average growth rate of U.S.real GDP per person implies that it doubled about every

Accepted Answer

A) 100 years on average. 
B) 70 years. 
C) 35 years. 
D) 25 years. 
A) 100 years on average. 
B) 70 years. 
C) 35 years. 
D) 25 years.

Exam 25: Production and Growth

Other things equal,relatively poor countries tend to grow

Which of the following countries benefited a lot from the catch-up effect in the last half of the twentieth century?

Average income has been stagnant for many years in

In medieval Europe an important technological advance was the use of the padded horse collar for plowing.Once this idea was thought of,other people used it.This illustrates that knowledge is generally a

Suppose U.S.-based Intel Corporation builds and operates a new computer chip factory in Honduras.Future production from such an investment would

Which of the following does the level of real GDP measure?

A management professor discovers a way for corporate management to operate more efficiently.He publishes his findings in a journal.His findings are

Countries with high population growth rates tend to have lower levels of educational attainment.

Which of the following is a correct way to measure productivity?

Which of the following is a determinant of productivity?

Which of the following is an example of a renewable resources?

In the United States real GDP per person is about $37,500,while in some poor countries real GDP per person is less than $3,500.

A rapid increase in the number of workers,other things the same,is likely in the short term to

Drug companies can usually obtain patents on new drugs.This turns new ideas into

Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth?

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology.Yet many economists believe that patents generate growth.Explain why.

If your firm has constant returns to scale,then if you doubled all your inputs your firm's output would

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

During the past century the average growth rate of U.S.real GDP per person implies that it doubled about every

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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