Question 1

Which of the following is generally an opportunity cost of investment in human capital?

Accepted Answer

A) future job security 
B) forgone present wages 
C) increased earning potential 
D) All of the above are correct. 
A) future job security 
B) forgone present wages 
C) increased earning potential 
D) All of the above are correct.

Question 2

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs.The growth that arises from capital accumulation is not a free lunch.It requires that society

Accepted Answer

A) conserve resources for future generations. 
B) sacrifice consumption goods and services now in order to enjoy more consumption in the future. 
C) recycle resources so that future generations can produce goods and services with the accumulated capital. 
D) None of the above is correct. 
A) conserve resources for future generations. 
B) sacrifice consumption goods and services now in order to enjoy more consumption in the future. 
C) recycle resources so that future generations can produce goods and services with the accumulated capital. 
D) None of the above is correct.

Question 3

If there are diminishing returns to capital,then

Accepted Answer

A) capital produces fewer goods as it ages. 
B) old ideas are not as useful as new ones. 
C) increases in the capital stock eventually decrease output. 
D) increases in the capital stock increase output by ever smaller amounts. 
A) capital produces fewer goods as it ages. 
B) old ideas are not as useful as new ones. 
C) increases in the capital stock eventually decrease output. 
D) increases in the capital stock increase output by ever smaller amounts.

Question 4

When a country removes trade barriers and imports toys and exports farm machinery,

Accepted Answer

A) its growth slows. 
B) its productivity decreases. 
C) it is essentially transforming farm machinery into toys. 
D) its economic well-being decreases while that of the country that sells toys increases. 
A) its growth slows. 
B) its productivity decreases. 
C) it is essentially transforming farm machinery into toys. 
D) its economic well-being decreases while that of the country that sells toys increases.

Question 5

Over time people have become more conscientious about recycling paper.At the same time corporations have found new ways to use this scrap paper.From these two things

Accepted Answer

A) we can be sure that scrap paper is now less scarce. 
B) we can be sure that scrap paper is now more scarce. 
C) we know that the scarcity of scrap paper has not changed. 
D) we cannot tell if the scarcity of scrap paper has changed. 
A) we can be sure that scrap paper is now less scarce. 
B) we can be sure that scrap paper is now more scarce. 
C) we know that the scarcity of scrap paper has not changed. 
D) we cannot tell if the scarcity of scrap paper has changed.

Question 6

If a good has become more scarce than we know for sure that

Accepted Answer

A) demand for it must have increased. 
B) the supply of it must have decreased. 
C) either demand for it must have increased or the supply of it must have decreased. 
D) both the supply of it and the demand for it decreased. 
A) demand for it must have increased. 
B) the supply of it must have decreased. 
C) either demand for it must have increased or the supply of it must have decreased. 
D) both the supply of it and the demand for it decreased.

Question 7

Suppose there are constant returns to scale.Now suppose that over time a country doubles its workers,its natural resources,and its human capital,but its technology is unchanged.Which of the following would double?

Accepted Answer

A) both output and productivity 
B) output, but not productivity 
C) productivity, but not output 
D) neither productivity nor output 
A) both output and productivity 
B) output, but not productivity 
C) productivity, but not output 
D) neither productivity nor output

Question 8

Which of the following would be human capital and physical capital respectively?

Accepted Answer

A) for an accounting firm, the accountants knowledge of tax laws and computer software 
B) for a grocery store, grocery carts and shelving 
C) for a school, chalkboard and desks 
D) for a library, the building and the reference librarians' knowledge of the Internet 
A) for an accounting firm, the accountants knowledge of tax laws and computer software 
B) for a grocery store, grocery carts and shelving 
C) for a school, chalkboard and desks 
D) for a library, the building and the reference librarians' knowledge of the Internet

Question 9

Countries that grew the fastest over the last 100 years had growth rates of about

Accepted Answer

A) 0.5 percent. 
B) 1.5 percent. 
C) 2.0 percent. 
D) 2.5 percent. 
A) 0.5 percent. 
B) 1.5 percent. 
C) 2.0 percent. 
D) 2.5 percent.

Question 10

In a market economy,scarcity of resources is most clearly reflected in

Accepted Answer

A) supply. 
B) demand. 
C) market prices. 
D) the stock of the resource. 
A) supply. 
B) demand. 
C) market prices. 
D) the stock of the resource.

Question 11

In a market economy,the real,or inflation adjusted,price of a resource measures its

Accepted Answer

A) contribution to revenue. 
B) relative scarcity. 
C) productivity. 
D) contribution to efficiency. 
A) contribution to revenue. 
B) relative scarcity. 
C) productivity. 
D) contribution to efficiency.

Question 12

Over the last 100 years which of the following had growth rates higher than that of the United States?

Accepted Answer

A) the United Kingdom 
B) Bangladesh 
C) Brazil 
D) None of the above is correct. 
A) the United Kingdom 
B) Bangladesh 
C) Brazil 
D) None of the above is correct.

Question 13

How do outward-oriented policies affect a nation's productivity?

Accepted Answer

Most economists believe that poor nation

Question 14

Consider two countries.Country A has a population of 1,000,of whom 800 work 8 hours a day to make 128,000 final goods.Country B has a population of 2,000 of whom 1,800 work 6 hours a day to make 270,000 final goods

Accepted Answer

A) Country A has higher productivity and higher real GDP per person than country B. 
B) Country A has lower productivity and lower real GDP per person than country B. 
C) Country A has higher productivity, but lower real GDP per person than country B. 
D) Country B has lower productivity, but higher real GDP per person than country B. 
A) Country A has higher productivity and higher real GDP per person than country B. 
B) Country A has lower productivity and lower real GDP per person than country B. 
C) Country A has higher productivity, but lower real GDP per person than country B. 
D) Country B has lower productivity, but higher real GDP per person than country B.

Question 15

Both Tom and Jerry work eight hours a day.Tom can produce six baskets of goods per hour while Jerry can produce four baskets of the same goods per hour.It follows that Tom's

Accepted Answer

A) productivity is greater than Jerry's. 
B) output is greater than Jerry's. 
C) standard of living is higher than Jerry's. 
D) All of the above are correct. 
A) productivity is greater than Jerry's. 
B) output is greater than Jerry's. 
C) standard of living is higher than Jerry's. 
D) All of the above are correct.

Question 16

Other things the same,if a country increased its saving rate,in 40 years or so it would likely have

Accepted Answer

A) higher productivity, and a higher growth rate of real GDP. 
B) higher productivity, but not a higher growth rate of real GDP. 
C) the same productivity and growth of real GDP it began with. 
D) None of the above is correct. 
A) higher productivity, and a higher growth rate of real GDP. 
B) higher productivity, but not a higher growth rate of real GDP. 
C) the same productivity and growth of real GDP it began with. 
D) None of the above is correct.

Question 17

Which of the following is human capital?

Accepted Answer

A) a student loan 
B) understanding how to use a company's accounting software 
C) training videos for new corporate employees 
D) All of the above are correct. 
A) a student loan 
B) understanding how to use a company's accounting software 
C) training videos for new corporate employees 
D) All of the above are correct.

Question 18

The Peapod Restaurant uses all of the following to produce vegetarian meals.Which of them is an example of physical capital?

Accepted Answer

A) The owner's knowledge of how to prepare vegetarian entrees. 
B) The money in the owner's account at the bank she borrowed money from. 
C) The tables and chairs in the restaurant. 
D) The land the restaurant was built on. 
A) The owner's knowledge of how to prepare vegetarian entrees. 
B) The money in the owner's account at the bank she borrowed money from. 
C) The tables and chairs in the restaurant. 
D) The land the restaurant was built on.

Question 19

Suppose that Turkey undertakes a policy to increase its saving rate.This policy will likely

Accepted Answer

A) have no impact on GDP growth. 
B) lead to higher GDP growth for a few years. 
C) lead to higher GDP growth for a period of several decades. 
D) lead to a permanently higher growth rate. 
A) have no impact on GDP growth. 
B) lead to higher GDP growth for a few years. 
C) lead to higher GDP growth for a period of several decades. 
D) lead to a permanently higher growth rate.

Question 20

Indonesians,for example,have a lower standard of living than Americans because they have a lower level of productivity.

Accepted Answer

A) True 
 B)False

Exam 25: Production and Growth

Which of the following is generally an opportunity cost of investment in human capital?

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs.The growth that arises from capital accumulation is not a free lunch.It requires that society

If there are diminishing returns to capital,then

When a country removes trade barriers and imports toys and exports farm machinery,

Over time people have become more conscientious about recycling paper.At the same time corporations have found new ways to use this scrap paper.From these two things

If a good has become more scarce than we know for sure that

Suppose there are constant returns to scale.Now suppose that over time a country doubles its workers,its natural resources,and its human capital,but its technology is unchanged.Which of the following would double?

Which of the following would be human capital and physical capital respectively?

Countries that grew the fastest over the last 100 years had growth rates of about

In a market economy,scarcity of resources is most clearly reflected in

In a market economy,the real,or inflation adjusted,price of a resource measures its

Over the last 100 years which of the following had growth rates higher than that of the United States?

How do outward-oriented policies affect a nation's productivity?

Consider two countries.Country A has a population of 1,000,of whom 800 work 8 hours a day to make 128,000 final goods.Country B has a population of 2,000 of whom 1,800 work 6 hours a day to make 270,000 final goods

Both Tom and Jerry work eight hours a day.Tom can produce six baskets of goods per hour while Jerry can produce four baskets of the same goods per hour.It follows that Tom's

Other things the same,if a country increased its saving rate,in 40 years or so it would likely have

Which of the following is human capital?

The Peapod Restaurant uses all of the following to produce vegetarian meals.Which of them is an example of physical capital?

Suppose that Turkey undertakes a policy to increase its saving rate.This policy will likely

Indonesians,for example,have a lower standard of living than Americans because they have a lower level of 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 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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