Question 1

When the real wage rate is less than the equilibrium real wage rate, there is a ________ of labor and the real wage rate will ________.

Accepted Answer

A) surplus; fall 
B) shortage; fall 
C) shortage; rise 
D) surplus; rise 
E) shortage; not change because it is fixed 
A) surplus; fall 
B) shortage; fall 
C) shortage; rise 
D) surplus; rise 
E) shortage; not change because it is fixed

Question 2

17.5 Chapter Figures
  
-The figure above shows the U.S. production function. How would an increase in unemployment benefits be shown in the figure?

Accepted Answer

A) a movement from point C to point B 
B) a movement from point A to point B 
C) an upward shift or rotation of the production function 
D) a downward shift or rotation of the production function 
E) None of the above because the effects of an increase in unemployment benefits cannot be shown in the figure. 
A) a movement from point C to point B 
B) a movement from point A to point B 
C) an upward shift or rotation of the production function 
D) a downward shift or rotation of the production function 
E) None of the above because the effects of an increase in unemployment benefits cannot be shown in the figure.

Question 3

An increase in the real wage rate ________ the quantity of labor demanded and ________ the quantity of labor supplied.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change 
A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change

Question 4

Property rights protect

Accepted Answer

A) only the rights to physical property. 
B) only the rights to financial property. 
C) all rights except rights to intellectual property. 
D) rights to physical property, financial property, and intellectual property. 
E) the government's right to impose taxes. 
A) only the rights to physical property. 
B) only the rights to financial property. 
C) all rights except rights to intellectual property. 
D) rights to physical property, financial property, and intellectual property. 
E) the government's right to impose taxes.

Question 5

If the government increases unemployment benefits, then the labor

Accepted Answer

A) demand curve shifts rightward. 
B) demand curve shifts leftward. 
C) supply curve shifts rightward. 
D) supply curve shifts leftward. 
E) Both answers B and D are correct. 
A) demand curve shifts rightward. 
B) demand curve shifts leftward. 
C) supply curve shifts rightward. 
D) supply curve shifts leftward. 
E) Both answers B and D are correct.

Question 6

The labor force participation rate

Accepted Answer

A) increases as the real wage increases. 
B) decreases as the real wage increases. 
C) has nothing to do with the real wage rate. 
D) increases as the opportunity cost of working increases. 
E) is one of the major reasons that firms pay efficiency wages. 
A) increases as the real wage increases. 
B) decreases as the real wage increases. 
C) has nothing to do with the real wage rate. 
D) increases as the opportunity cost of working increases. 
E) is one of the major reasons that firms pay efficiency wages.

Question 7

The rule of ________ can be used to calculate the number of years that it takes for the level of a variable to ________.

Accepted Answer

A) 20; double 
B) 70; triple 
C) 70; double 
D) 20; triple 
E) thumb; double 
A) 20; double 
B) 70; triple 
C) 70; double 
D) 20; triple 
E) thumb; double

Question 8

If Country A's real GDP is growing at 6 percent per year and Country B's real GDP is growing at 6 percent per year, then the standard of living is

Accepted Answer

A) growing more rapidly in Country A. 
B) higher in Country B. 
C) changing at the same rate in Country A and Country B. 
D) growing more slowly in Country A. 
E) changing at the same rate in Country A and Country B only if the rate of population growth is the same in both countries. 
A) growing more rapidly in Country A. 
B) higher in Country B. 
C) changing at the same rate in Country A and Country B. 
D) growing more slowly in Country A. 
E) changing at the same rate in Country A and Country B only if the rate of population growth is the same in both countries.

Question 9

-The above figure shows a nation's production function. Point A is

Accepted Answer

A) attainable if the economy is inefficient. 
B) unattainable given the state of the economy. 
C) attainable if the nation uses resources efficiently. 
D) the maximum amount of real GDP the nation can produce. 
E) the labor market equilibrium quantity of employment and real GDP. 
A) attainable if the economy is inefficient. 
B) unattainable given the state of the economy. 
C) attainable if the nation uses resources efficiently. 
D) the maximum amount of real GDP the nation can produce. 
E) the labor market equilibrium quantity of employment and real GDP.

Question 10

In 2009, U.S. real GDP decreased by 3 percent and the population grew by 1 percent. Thus, real GDP per person

Accepted Answer

A) increased 2 percent. 
B) decreased 2 percent. 
C) increased 4 percent. 
D) decreased 4 percent. 
E) decreased 3 percent. 
A) increased 2 percent. 
B) decreased 2 percent. 
C) increased 4 percent. 
D) decreased 4 percent. 
E) decreased 3 percent.

Question 11

A reason why many of the third world countries are not achieving an increase in their standard of living is that they

Accepted Answer

A) don't have enough natural resources. 
B) don't have strong military power to force people to work harder. 
C) don't have social institutions with a strong rule of law and economic freedom. 
D) strongly encouraged international trade. 
E) don't have a strong central government. 
A) don't have enough natural resources. 
B) don't have strong military power to force people to work harder. 
C) don't have social institutions with a strong rule of law and economic freedom. 
D) strongly encouraged international trade. 
E) don't have a strong central government.

Question 12

What policies can a government undertake to achieve faster economic growth?

Accepted Answer

There are several policies a government

Question 13

-The above figure shows a nation's production function. Point C is

Accepted Answer

A) unattainable given the nation's resource level. 
B) attainable if the nation uses resources efficiently. 
C) attainable if the nation uses resources inefficiently. 
D) the maximum amount of real GDP the nation can produce. 
E) the labor market equilibrium point. 
A) unattainable given the nation's resource level. 
B) attainable if the nation uses resources efficiently. 
C) attainable if the nation uses resources inefficiently. 
D) the maximum amount of real GDP the nation can produce. 
E) the labor market equilibrium point.

Question 14

Diminishing returns along a production function means that each additional hour of labor employed

Accepted Answer

A) produces a successively smaller additional amount of real GDP. 
B) produces a successively larger additional amount of real GDP. 
C) produces a constant additional amount of real GDP. 
D) does not produce any additional real GDP. 
E) forces the real wage rate to rise. 
A) produces a successively smaller additional amount of real GDP. 
B) produces a successively larger additional amount of real GDP. 
C) produces a constant additional amount of real GDP. 
D) does not produce any additional real GDP. 
E) forces the real wage rate to rise.

Question 15

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20. Then the firm's real wage is

Accepted Answer

A) $20. 
B) $80. 
C) $5. 
D) $0.20 
E) $4. 
A) $20. 
B) $80. 
C) $5. 
D) $0.20 
E) $4.

Question 16

The presence of government corruption in some countries

Accepted Answer

A) slows their economic growth. 
B) speeds their economic growth. 
C) invalidates the new growth theory's predictions. 
D) supports the classical growth theory's predictions. 
E) invalidates the neoclassical growth theory's predictions. 
A) slows their economic growth. 
B) speeds their economic growth. 
C) invalidates the new growth theory's predictions. 
D) supports the classical growth theory's predictions. 
E) invalidates the neoclassical growth theory's predictions.

Question 17

Holding all other influences constant, the quantity of labor supplied in a given time period depends

Accepted Answer

A) inversely on the real wage rate so that a higher real wage decreases the quantity of labor supplied. 
B) directly on the real wage rate so that a higher real wage increases the quantity of labor supplied. 
C) inversely on the quantity of labor demanded. 
D) on the money wage rate not the real wage rate. 
E) directly on the quantity of labor demanded. 
A) inversely on the real wage rate so that a higher real wage decreases the quantity of labor supplied. 
B) directly on the real wage rate so that a higher real wage increases the quantity of labor supplied. 
C) inversely on the quantity of labor demanded. 
D) on the money wage rate not the real wage rate. 
E) directly on the quantity of labor demanded.

Question 18

$$\begin{array}{l}
\text { Real GDP }\
\begin{array} { c c } 
\text { Year } & \text { (trillions of 2005 yen) } \
\hline 1997 & 484 \
1996 & 480
\end{array}
\end{array}$$
-The table gives information about the economy of Japan. The economic growth rate in 1997 is ________ percent.

Accepted Answer

A) 8.0 
B) 0.8 
C) 0.08 
D) 0.008 
E) 4 
A) 8.0 
B) 0.8 
C) 0.08 
D) 0.008 
E) 4

Question 19

-Based on the production function in the above figure, which of the following is an attainable combination of labor and real GDP?
I. 300 billion hours of labor and real GDP of $15 trillion
Ii. 300 billion hours of labor and real GDP of $6 trillion
Iii. 100 billion hours of labor and real GDP of $12 trillion

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) ii and iii 
E) i and ii 
A) i only 
B) ii only 
C) iii only 
D) ii and iii 
E) i and ii

Question 20

In the United States between the 1970s and the 2000s, the productivity of labor increased. This increase led to

Accepted Answer

A) an increase in the demand for labor. 
B) an increase in the supply of labor. 
C) a downward shift of the production function. 
D) a decrease in the supply of labor. 
E) no change in either the demand for or the supply of labor. 
A) an increase in the demand for labor. 
B) an increase in the supply of labor. 
C) a downward shift of the production function. 
D) a decrease in the supply of labor. 
E) no change in either the demand for or the supply of labor.

When the real wage rate is less than the equilibrium real wage rate, there is a of labor and the real wage rate will .

17.5 Chapter Figures -The figure above shows the U.S. production function. How would an increase in unemployment benefits be shown in the figure?

An increase in the real wage rate the quantity of labor demanded and the quantity of labor supplied.

Property rights protect

If the government increases unemployment benefits, then the labor

The labor force participation rate

The rule of can be used to calculate the number of years that it takes for the level of a variable to .

If Country A's real GDP is growing at 6 percent per year and Country B's real GDP is growing at 6 percent per year, then the standard of living is

-The above figure shows a nation's production function. Point A is

In 2009, U.S. real GDP decreased by 3 percent and the population grew by 1 percent. Thus, real GDP per person

A reason why many of the third world countries are not achieving an increase in their standard of living is that they

What policies can a government undertake to achieve faster economic growth?

-The above figure shows a nation's production function. Point C is

Diminishing returns along a production function means that each additional hour of labor employed

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20. Then the firm's real wage is

The presence of government corruption in some countries

Holding all other influences constant, the quantity of labor supplied in a given time period depends

Real GDP Year (trillions of 2005 yen) 1997 484 1996 480 -The table gives information about the economy of Japan. The economic growth rate in 1997 is ________ percent.

In the United States between the 1970s and the 2000s, the productivity of labor increased. This increase led to

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 17: Potential Gdp and Economic Growth

When the real wage rate is less than the equilibrium real wage rate, there is a ________ of labor and the real wage rate will ________.

17.5 Chapter Figures -The figure above shows the U.S. production function. How would an increase in unemployment benefits be shown in the figure?

An increase in the real wage rate ________ the quantity of labor demanded and ________ the quantity of labor supplied.

Property rights protect

If the government increases unemployment benefits, then the labor

The labor force participation rate

The rule of ________ can be used to calculate the number of years that it takes for the level of a variable to ________.

If Country A's real GDP is growing at 6 percent per year and Country B's real GDP is growing at 6 percent per year, then the standard of living is

-The above figure shows a nation's production function. Point A is

In 2009, U.S. real GDP decreased by 3 percent and the population grew by 1 percent. Thus, real GDP per person

A reason why many of the third world countries are not achieving an increase in their standard of living is that they

What policies can a government undertake to achieve faster economic growth?

-The above figure shows a nation's production function. Point C is

Diminishing returns along a production function means that each additional hour of labor employed

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20. Then the firm's real wage is

The presence of government corruption in some countries

Holding all other influences constant, the quantity of labor supplied in a given time period depends

Real GDP Year (trillions of 2005 yen) 1997 484 1996 480 -The table gives information about the economy of Japan. The economic growth rate in 1997 is ________ percent.

In the United States between the 1970s and the 2000s, the productivity of labor increased. This increase led to

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

When the real wage rate is less than the equilibrium real wage rate, there is a of labor and the real wage rate will .

An increase in the real wage rate the quantity of labor demanded and the quantity of labor supplied.

The rule of can be used to calculate the number of years that it takes for the level of a variable to .