Question 1

A forest is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 2

In countries that experience political instability,standards of living tend to be low because of

Accepted Answer

A)  violations of diminishing returns. 
B)  excessive levels of caloric intake. 
C)  lack of respect for property rights. 
D)  attempts by government officials to thwart the catch-up effect. 
A)  violations of diminishing returns. 
B)  excessive levels of caloric intake. 
C)  lack of respect for property rights. 
D)  attempts by government officials to thwart the catch-up effect.

Question 3

If an inexpensive alternative to oil were found,the price of oil adjusted for inflation

Accepted Answer

A)  would decline as the alternative would reduce the demand for oil. 
B)  would decline as the alternative would reduce the supply of oil. 
C)  would increase as the alternative would increase the demand for oil. 
D)  would increase as the alternative would increase the supply of oil. 
A)  would decline as the alternative would reduce the demand for oil. 
B)  would decline as the alternative would reduce the supply of oil. 
C)  would increase as the alternative would increase the demand for oil. 
D)  would increase as the alternative would increase the supply of oil.

Question 4

In the 1800s,Europeans purchased stock in American companies that used the funds to build railroads and factories.The Europeans who did this engaged in

Accepted Answer

A)  foreign portfolio investment. 
B)  indirect domestic investment. 
C)  foreign direct investment. 
D)  foreign indirect investment. 
A)  foreign portfolio investment. 
B)  indirect domestic investment. 
C)  foreign direct investment. 
D)  foreign indirect investment.

Question 5

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not correct?

Accepted Answer

A)  China allows only one child per family and couples that violate this rule are subject to substantial fines. 
B)  In developed countries,population growth is consistently about 3 percent per year;in developing countries it is consistently about 5 percent per year. 
C)  Educational attainment tends to be lowest in countries with the highest population growth. 
D)  Economists generally believe that a country that decreases a high population growth rate can increase its economic growth rate. 
A)  China allows only one child per family and couples that violate this rule are subject to substantial fines. 
B)  In developed countries,population growth is consistently about 3 percent per year;in developing countries it is consistently about 5 percent per year. 
C)  Educational attainment tends to be lowest in countries with the highest population growth. 
D)  Economists generally believe that a country that decreases a high population growth rate can increase its economic growth rate.

Question 7

If Dark Nights,a U.S.manufacturer of winter clothing,opens a new factory in Austria,then

Accepted Answer

A)  Austrian GNP increases by more than Austrian GDP,which includes income earned by foreigners working in Austria. 
B)  Austrian GNP increases by more than Austrian GDP,which excludes income earned by foreigners working in Austria. 
C)  Austrian GNP increases by less than Austrian GDP,which includes income earned by foreigners working in Austria. 
D)  Austrian GNP increases by less than Austrian GDP,which excludes income earned by foreigners working in Austria. 
A)  Austrian GNP increases by more than Austrian GDP,which includes income earned by foreigners working in Austria. 
B)  Austrian GNP increases by more than Austrian GDP,which excludes income earned by foreigners working in Austria. 
C)  Austrian GNP increases by less than Austrian GDP,which includes income earned by foreigners working in Austria. 
D)  Austrian GNP increases by less than Austrian GDP,which excludes income earned by foreigners working in Austria.

Question 8

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

Accepted Answer

A)  fish 
B)  soybeans 
C)  wood 
D)  All of the above are correct. 
A)  fish 
B)  soybeans 
C)  wood 
D)  All of the above are correct.

Question 9

Proprietary technology is technology that is

Accepted Answer

A)  widely used because it is easy to learn. 
B)  widely used because the government subsidizes its use. 
C)  not widely used because people could,but have not,taken the time to learn how to apply it. 
D)  not widely used because it is known or controlled only by the company that discovered it. 
A)  widely used because it is easy to learn. 
B)  widely used because the government subsidizes its use. 
C)  not widely used because people could,but have not,taken the time to learn how to apply it. 
D)  not widely used because it is known or controlled only by the company that discovered it.

Question 10

If there are constant returns to scale,the production function can be written as

Accepted Answer

A)  xY = 2xAF(L,K,H,N). 
B)  Y/L = A F(xL,xK,xH,xN). 
C)  Y/L = A F( 1,K/L,H/L,N/L). 
D)  L = AF(Y,K,H,N). 
A)  xY = 2xAF(L,K,H,N). 
B)  Y/L = A F(xL,xK,xH,xN). 
C)  Y/L = A F( 1,K/L,H/L,N/L). 
D)  L = AF(Y,K,H,N).

Question 11

Technological knowledge refers to

Accepted Answer

A)  human capital. 
B)  available information on how to produce things. 
C)  resources expended transmitting society's understanding to the labor force. 
D)  All of the above are technological knowledge. 
A)  human capital. 
B)  available information on how to produce things. 
C)  resources expended transmitting society's understanding to the labor force. 
D)  All of the above are technological knowledge.

Question 12

The level of real GDP person

Accepted Answer

A)  differs widely across countries,but the growth rate of real GDP per person is similar across countries. 
B)  is very similar across countries,but the growth rate of real GDP per person differs widely across countries. 
C)  and the growth rate of real GDP per person are similar across countries. 
D)  and the growth rate of real GDP per person vary widely across countries. 
A)  differs widely across countries,but the growth rate of real GDP per person is similar across countries. 
B)  is very similar across countries,but the growth rate of real GDP per person differs widely across countries. 
C)  and the growth rate of real GDP per person are similar across countries. 
D)  and the growth rate of real GDP per person vary widely across countries.

Question 13

In the long run,an increase in the saving rate

Accepted Answer

A)  doesn't change the level of productivity or income. 
B)  raises the levels of both productivity and income. 
C)  raises the level of productivity but not the level of income. 
D)  raises the level of income but not the level of productivity. 
A)  doesn't change the level of productivity or income. 
B)  raises the levels of both productivity and income. 
C)  raises the level of productivity but not the level of income. 
D)  raises the level of income but not the level of productivity.

Question 14

Which of the following is true?

Accepted Answer

A)  Kremer argued that with greater population,society would generate more ideas so that growth of real GDP per person could continue.Malthus argued that increasing population would outstrip agricultural production. 
B)  Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Malthus argued that increases in technology would allow increased output growth so that even with population growth,society would enjoy a higher standard of living. 
C)  Malthus argued that with greater population,society would generate more ideas so that growth of real GDP per person could continue.Kremer argued that increasing population would outstrip agricultural production. 
D)  Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Kremer argued that increases in technology would allow increased output growth so that even with population growth,society would enjoy a higher standard of living. 
A)  Kremer argued that with greater population,society would generate more ideas so that growth of real GDP per person could continue.Malthus argued that increasing population would outstrip agricultural production. 
B)  Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Malthus argued that increases in technology would allow increased output growth so that even with population growth,society would enjoy a higher standard of living. 
C)  Malthus argued that with greater population,society would generate more ideas so that growth of real GDP per person could continue.Kremer argued that increasing population would outstrip agricultural production. 
D)  Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Kremer argued that increases in technology would allow increased output growth so that even with population growth,society would enjoy a higher standard of living.

Question 15

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,productivity would

Accepted Answer

A)  fall to less than one-half of its former value. 
B)  fall,but it would still be greater than one-half of its former value. 
C)  stay the same. 
D)  rise but less than double. 
A)  fall to less than one-half of its former value. 
B)  fall,but it would still be greater than one-half of its former value. 
C)  stay the same. 
D)  rise but less than double.

Exam 25: Production and Growth

A forest is an example of a nonrenewable resource.

In countries that experience political instability,standards of living tend to be low because of

If an inexpensive alternative to oil were found,the price of oil adjusted for inflation

In the 1800s,Europeans purchased stock in American companies that used the funds to build railroads and factories.The Europeans who did this engaged in

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Which of the following is not correct?

If Dark Nights,a U.S.manufacturer of winter clothing,opens a new factory in Austria,then

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

Proprietary technology is technology that is

If there are constant returns to scale,the production function can be written as

Technological knowledge refers to

The level of real GDP person

In the long run,an increase in the saving rate

Which of the following is true?

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,productivity would

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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