Question 1

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 2

Which of the following statements is true?

Accepted Answer

A)  The quantity of natural resources per worker can influence productivity. 
B)  Technological knowledge and human capital are closely related. 
C)  Over long periods of time,the prices of most natural resources are stable or falling,relative to other prices. 
D)  All of the above are correct. 
A)  The quantity of natural resources per worker can influence productivity. 
B)  Technological knowledge and human capital are closely related. 
C)  Over long periods of time,the prices of most natural resources are stable or falling,relative to other prices. 
D)  All of the above are correct.

Question 3

Industrial machinery is an example of

Accepted Answer

A)  a factor of production that in the past was an output from the production process. 
B)  technological knowledge. 
C)  a production function. 
D)  an item which always has the property called constant returns to scale. 
A)  a factor of production that in the past was an output from the production process. 
B)  technological knowledge. 
C)  a production function. 
D)  an item which always has the property called constant returns to scale.

Question 4

Incentives for parents to send their children to school,such as small monthly payments to parents if their children have regular attendance,appear to increase school attendance.

Accepted Answer

A) True 
 B)False

Question 5

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million.The year before,real GDP was 500.0 billion and the population was 2.0 million.What was the growth rate of real GDP per person during the year?

Accepted Answer

A)  12 percent 
B)  10 percent 
C)  4 percent 
D)  2 percent 
A)  12 percent 
B)  10 percent 
C)  4 percent 
D)  2 percent

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

Which of the following is indicated by the data on real income per person for various countries over the past 100 or so years?

Accepted Answer

A)  If,in a relatively poor country,real income per person had grown by 3.5 percent per year for the last 100 years,it would be a relatively rich country today. 
B)  Rich countries became richer and poor countries became poorer. 
C)  In the United States,real income per person today is about four times as high as it was 100 years ago. 
D)  All of the above are correct. 
A)  If,in a relatively poor country,real income per person had grown by 3.5 percent per year for the last 100 years,it would be a relatively rich country today. 
B)  Rich countries became richer and poor countries became poorer. 
C)  In the United States,real income per person today is about four times as high as it was 100 years ago. 
D)  All of the above are correct.

Question 8

According to research by Robert Fogel,what proportion of the British population in 1780 was so malnourished that they could not perform manual labor?

Accepted Answer

A)  40 percent 
B)  20 percent 
C)  10 percent 
D)  5 percent 
A)  40 percent 
B)  20 percent 
C)  10 percent 
D)  5 percent

Question 9

Productivity is defined as

Accepted Answer

A)  the amount of difficulty that is involved in producing a given quantity of goods and services. 
B)  the quantity of labor that is required to produce one unit of goods and services. 
C)  the quantity of goods and services produced from each unit of labor input. 
D)  the quantity of goods and services produced over a given amount of time. 
A)  the amount of difficulty that is involved in producing a given quantity of goods and services. 
B)  the quantity of labor that is required to produce one unit of goods and services. 
C)  the quantity of goods and services produced from each unit of labor input. 
D)  the quantity of goods and services produced over a given amount of time.

Question 10

The quantity of goods and services produced from each unit of labor input is called

Accepted Answer

A)  standard of living. 
B)  productivity. 
C)  capitalized quantity. 
D)  the knowledge base. 
A)  standard of living. 
B)  productivity. 
C)  capitalized quantity. 
D)  the knowledge base.

Question 11

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 12

Countries that have lower levels of real GDP per person than the United States

Accepted Answer

A)  tend to have growth rates that are higher than that of the United States. 
B)  tend to have growth rates that are about the same as that of the United States. 
C)  tend to have growth rates that are lower than that of the United States. 
D)  in some cases have growth rates that are higher than that of the United States and in other cases lower than that of the United States. 
A)  tend to have growth rates that are higher than that of the United States. 
B)  tend to have growth rates that are about the same as that of the United States. 
C)  tend to have growth rates that are lower than that of the United States. 
D)  in some cases have growth rates that are higher than that of the United States and in other cases lower than that of the United States.

Question 13

Which of the following would be considered physical capital?

Accepted Answer

A)  the refrigerators at Uncle Bob's restaurant 
B)  rivers on which goods are transported 
C)  the skills and knowledge of a lawyer 
D)  All of the above are correct. 
A)  the refrigerators at Uncle Bob's restaurant 
B)  rivers on which goods are transported 
C)  the skills and knowledge of a lawyer 
D)  All of the above are correct.

Question 14

Which of the following lists contains,in this order,natural resources,human capital,and physical capital?

Accepted Answer

A)  For a restaurant: the land the restaurant was built on,the things the Chef learned at Cooking School,the freezers where the chops and steaks are kept. 
B)  For a furniture company: wood,the company cafeteria,saws. 
C)  For a railroad: fuel,railroad engines,railroad tracks. 
D)  None of the above is correct. 
A)  For a restaurant: the land the restaurant was built on,the things the Chef learned at Cooking School,the freezers where the chops and steaks are kept. 
B)  For a furniture company: wood,the company cafeteria,saws. 
C)  For a railroad: fuel,railroad engines,railroad tracks. 
D)  None of the above is correct.

Question 15

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 16

Which of the following best describes the response of output as time passes to an increase in the saving rate?

Accepted Answer

A)  The growth rate of output does not change. 
B)  The growth rate of output increases and gets even larger as time passes. 
C)  The growth rate of output increases and does not change as time passes. 
D)  The growth rate of output increases,but diminishes to its former level as time passes. 
A)  The growth rate of output does not change. 
B)  The growth rate of output increases and gets even larger as time passes. 
C)  The growth rate of output increases and does not change as time passes. 
D)  The growth rate of output increases,but diminishes to its former level as time passes.

Question 17

Which of the following is correct?

Accepted Answer

A)  Over the last 100 years Japan had a higher average growth rate than the United States.It follows that,today,the standard of living in Japan is higher than in the United States. 
B)  The typical person in Bangladesh today has about twice the real income of a typical American 100 years ago. 
C)  The typical citizen of China today has about one-half as much real income as the typical citizen of America today. 
D)  None of the above is correct. 
A)  Over the last 100 years Japan had a higher average growth rate than the United States.It follows that,today,the standard of living in Japan is higher than in the United States. 
B)  The typical person in Bangladesh today has about twice the real income of a typical American 100 years ago. 
C)  The typical citizen of China today has about one-half as much real income as the typical citizen of America today. 
D)  None of the above is correct.

Question 18

Which of the following is an example of a renewable natural resource?

Accepted Answer

A)  the knowledge possessed by scientists 
B)  carpenters' labor services 
C)  lumber 
D)  All of the above are correct. 
A)  the knowledge possessed by scientists 
B)  carpenters' labor services 
C)  lumber 
D)  All of the above are correct.

Question 19

In countries where women are discriminated against,policies that increase the likelihood of career success and educational opportunities for women are likely to decrease the birth rate.

Accepted Answer

A) True 
 B)False

Question 20

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.

Exam 25: Production and Growth

If there are diminishing returns to capital,then

Which of the following statements is true?

Industrial machinery is an example of

Incentives for parents to send their children to school,such as small monthly payments to parents if their children have regular attendance,appear to increase school attendance.

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million.The year before,real GDP was 500.0 billion and the population was 2.0 million.What was the growth rate of real GDP per person during the year?

Which of the following is considered human capital?

Which of the following is indicated by the data on real income per person for various countries over the past 100 or so years?

According to research by Robert Fogel,what proportion of the British population in 1780 was so malnourished that they could not perform manual labor?

Productivity is defined as

The quantity of goods and services produced from each unit of labor input is called

Which of the following is human capital?

Countries that have lower levels of real GDP per person than the United States

Which of the following would be considered physical capital?

Which of the following lists contains,in this order,natural resources,human capital,and physical capital?

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

Which of the following best describes the response of output as time passes to an increase in the saving rate?

Which of the following is correct?

Which of the following is an example of a renewable natural resource?

In countries where women are discriminated against,policies that increase the likelihood of career success and educational opportunities for women are likely to decrease the birth rate.

Other things equal,relatively poor countries tend to grow

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

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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