Question 1

Outward-oriented policies

Accepted Answer

A) allow countries to take advantage of gains from trade. 
B) have generally led to high growth for the countries that pursued them. 
C) receive widespread support from economists. 
D) All of the above are correct. 
A) allow countries to take advantage of gains from trade. 
B) have generally led to high growth for the countries that pursued them. 
C) receive widespread support from economists. 
D) All of the above are correct.

Question 2

Over the past 100 years, U.S. real GDP per person has doubled about every 35 years. If it continues to double every 35 years, then in 100 years U.S. real GDP per person will be about

Accepted Answer

A) 4 times higher than it is now. 
B) 8 times higher than it is now. 
C) 12 times higher than it is now. 
D) 16 times higher than it is now. 
A) 4 times higher than it is now. 
B) 8 times higher than it is now. 
C) 12 times higher than it is now. 
D) 16 times higher than it is now.

Question 3

In 2009 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2010 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day. Productivity at Buckeye Brewing

Accepted Answer

A) increased by 20%. 
B) increased by 16.67%. 
C) decreased by 1.67%. 
D) decreased by 40%. 
A) increased by 20%. 
B) increased by 16.67%. 
C) decreased by 1.67%. 
D) decreased by 40%.

Question 4

If they could increase their growth rates slightly, countries with low income would catch up with rich countries in about ten years.

Accepted Answer

A) True 
 B)False

Question 5

Inward-oriented policies

Accepted Answer

A) include imposing tariffs and other trade restrictions. 
B) have generally increased productivity and growth in the countries that pursued them. 
C) promote the production of goods and services that the country produces most efficiently. 
D) All of the above are correct. 
A) include imposing tariffs and other trade restrictions. 
B) have generally increased productivity and growth in the countries that pursued them. 
C) promote the production of goods and services that the country produces most efficiently. 
D) All of the above are correct.

Question 6

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

Accepted Answer

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

Question 7

Country A has a population of 1,000, of whom 700 worked an average of 8 hours a day and had a productivity of 2.5. Country B has a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. The country with the higher real GDP was

Accepted Answer

A) country A, and the country with higher real GDP per person was country A. 
B) country A, and the country with higher real GDP per person was country B. 
C) country B, and the country with higher real GDP per person was country A. 
D) country B, and the country with higher real GDP per person was country B. 
A) country A, and the country with higher real GDP per person was country A. 
B) country A, and the country with higher real GDP per person was country B. 
C) country B, and the country with higher real GDP per person was country A. 
D) country B, and the country with higher real GDP per person was country B.

Question 8

Investment from abroad

Accepted Answer

A) is a way for poor countries to learn the state-of-the-art technologies developed and used in richer countries. 
B) is viewed by economists as a way to increase growth. 
C) often requires removing restrictions that governments have imposed on foreign ownership of domestic capital. 
D) All of the above are correct. 
A) is a way for poor countries to learn the state-of-the-art technologies developed and used in richer countries. 
B) is viewed by economists as a way to increase growth. 
C) often requires removing restrictions that governments have imposed on foreign ownership of domestic capital. 
D) All of the above are correct.

Question 9

Ralph is a plumber. Which of the following are included in his physical capital?

Accepted Answer

A) the knowledge he learned on the job, and the tools he uses 
B) the knowledge he learned on the job, but not the tools he uses 
C) the tools he uses, but not the knowledge he learned on the job 
D) neither the knowledge he learned on the job nor the tools he uses 
A) the knowledge he learned on the job, and the tools he uses 
B) the knowledge he learned on the job, but not the tools he uses 
C) the tools he uses, but not the knowledge he learned on the job 
D) neither the knowledge he learned on the job nor the tools he uses

Question 10

Which of the following countries had the highest growth rate over the last 100 or so years?

Accepted Answer

A) Brazil 
B) Germany 
C) Canada 
D) United States 
A) Brazil 
B) Germany 
C) Canada 
D) United States

Question 11

In a market economy, we know that a resource has become scarcer when

Accepted Answer

A) its price rises relative to other prices. 
B) it is non-renewable and some of it is used. 
C) people search for substitutes. 
D) All of the above are correct. 
A) its price rises relative to other prices. 
B) it is non-renewable and some of it is used. 
C) people search for substitutes. 
D) All of the above are correct.

Question 12

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Accepted Answer

A) True 
 B)False

Question 13

A country experiencing a growth rate of 8% per year can go from being one of the poorest to one of the richest in how many generations?

Accepted Answer

A) one 
B) two 
C) three 
D) four 
A) one 
B) two 
C) three 
D) four

Question 14

Alexis and Tara both mine salt. Alexis mines 400 pounds in 40 hours. Tara mines 300 pounds in 20 hours. Which of the following is correct?

Accepted Answer

A) Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. 
B) Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. 
C) Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. 
D) Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has. 
A) Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. 
B) Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. 
C) Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. 
D) Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has.

Question 15

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 16

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Accepted Answer

A) and physical capital per worker will increase. 
B) and physical capital per worker will decrease. 
C) will increase but physical capital per worker will decrease. 
D) will decrease but physical capital per worker will increase. 
A) and physical capital per worker will increase. 
B) and physical capital per worker will decrease. 
C) will increase but physical capital per worker will decrease. 
D) will decrease but physical capital per worker will increase.

Question 17

Historically, the market prices of most natural resources (adjusted for inflation) have

Accepted Answer

A) increased. 
B) remained stable. 
C) remained stable or decreased. 
D) decreased. 
A) increased. 
B) remained stable. 
C) remained stable or decreased. 
D) decreased.

Question 18

Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Strike Out Bowling Balls produces 800 bowling balls per day using 2 workers who each work 8 hours per day. What is Strike Out's productivity?

Accepted Answer

A) 800 bowling balls 
B) 100 bowling balls per hour 
C) 50 bowling balls per hour 
D) None of the above is correct. 
A) 800 bowling balls 
B) 100 bowling balls per hour 
C) 50 bowling balls per hour 
D) None of the above is correct.

Exam 12: Production and Growth

Outward-oriented policies

Over the past 100 years, U.S. real GDP per person has doubled about every 35 years. If it continues to double every 35 years, then in 100 years U.S. real GDP per person will be about

In 2009 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2010 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day. Productivity at Buckeye Brewing

If they could increase their growth rates slightly, countries with low income would catch up with rich countries in about ten years.

Inward-oriented policies

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

Country A has a population of 1,000, of whom 700 worked an average of 8 hours a day and had a productivity of 2.5. Country B has a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. The country with the higher real GDP was

Investment from abroad

Ralph is a plumber. Which of the following are included in his physical capital?

Which of the following countries had the highest growth rate over the last 100 or so years?

In a market economy, we know that a resource has become scarcer when

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

A country experiencing a growth rate of 8% per year can go from being one of the poorest to one of the richest in how many generations?

Alexis and Tara both mine salt. Alexis mines 400 pounds in 40 hours. Tara mines 300 pounds in 20 hours. Which of the following is correct?

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

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Historically, the market prices of most natural resources (adjusted for inflation) have

Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India.

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

Strike Out Bowling Balls produces 800 bowling balls per day using 2 workers who each work 8 hours per day. What is Strike Out's 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 Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

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 Macroeconomic Models

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

Six Debates Over Macroeconomic Policy

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