Question 1

The traditional view of the production process is that capital is subject to

Accepted Answer

A)  diminishing returns,so that other things the same,real GDP in poor countries should grow at a faster rate than in rich countries. 
B)  diminishing returns,so that other things the same,real GDP in poor countries should grow at a slower rate than in rich countries. 
C)  increasing returns,so that other things the same,real GDP in poor countries should grow at a faster rate than in rich countries. 
D)  increasing returns,so that other things the same,real GDP in poor countries should grow at a slower rate than in rich countries. 
A)  diminishing returns,so that other things the same,real GDP in poor countries should grow at a faster rate than in rich countries. 
B)  diminishing returns,so that other things the same,real GDP in poor countries should grow at a slower rate than in rich countries. 
C)  increasing returns,so that other things the same,real GDP in poor countries should grow at a faster rate than in rich countries. 
D)  increasing returns,so that other things the same,real GDP in poor countries should grow at a slower rate than in rich countries.

Question 2

In 2006,the typical Bangladeshi had about

Accepted Answer

A)  1/5 the real income of a typical American a century ago. 
B)  2/3 the real income of a typical American a century ago. 
C)  2 times as much real income as that of a typical American a century ago. 
D)  4 times as much real income as that of a typical American a century ago. 
A)  1/5 the real income of a typical American a century ago. 
B)  2/3 the real income of a typical American a century ago. 
C)  2 times as much real income as that of a typical American a century ago. 
D)  4 times as much real income as that of a typical American a century ago.

Question 3

Which of the following is human capital?

Accepted Answer

A)  textbooks 
B)  hand held power tools 
C)  understanding how to repair cars 
D)  All of the above are correct. 
A)  textbooks 
B)  hand held power tools 
C)  understanding how to repair cars 
D)  All of the above are correct.

Question 4

Given that a country's real output has increased,in which of the following cases can we be sure that its productivity also has increased?

Accepted Answer

A)  The total number of hours worked rose. 
B)  The total number of hours worked stayed the same. 
C)  The total number of hours worked fell. 
D)  Both b and c are correct. 
A)  The total number of hours worked rose. 
B)  The total number of hours worked stayed the same. 
C)  The total number of hours worked fell. 
D)  Both b and c are correct.

Question 5

Which of the following is correct?

Accepted Answer

A)  There is no debate about the effects of higher population growth on economic growth. 
B)  Natural resources clearly place limits on growth;there is simply no way to reduce either the amount or type of natural resources needed to produce goods. 
C)  How much an increase in capital increases a country's output is independent of that country's current level of capital. 
D)  Economists argue that outward rather than inward policies are likely to promote economic growth. 
A)  There is no debate about the effects of higher population growth on economic growth. 
B)  Natural resources clearly place limits on growth;there is simply no way to reduce either the amount or type of natural resources needed to produce goods. 
C)  How much an increase in capital increases a country's output is independent of that country's current level of capital. 
D)  Economists argue that outward rather than inward policies are likely to promote economic growth.

Question 6

Perry accumulated a lot of mathematical skills while in high school,college,and graduate school.Economists include these skills as part of Perry's

Accepted Answer

A)  standard of learning. 
B)  technological knowledge. 
C)  physical capital. 
D)  human capital. 
A)  standard of learning. 
B)  technological knowledge. 
C)  physical capital. 
D)  human capital.

Question 7

Which of the following is consistent with the catch-up effect?

Accepted Answer

A)  The United States had a higher growth rate before 1900 than after. 
B)  After World War II the United States had lower growth rates than war-ravaged European countries. 
C)  Although the United States has a relatively high level of output per person,its growth rate is rather modest compared to some countries. 
D)  All of the above are correct. 
A)  The United States had a higher growth rate before 1900 than after. 
B)  After World War II the United States had lower growth rates than war-ravaged European countries. 
C)  Although the United States has a relatively high level of output per person,its growth rate is rather modest compared to some countries. 
D)  All of the above are correct.

Question 8

Cedar Valley Furniture uses 5 workers,each working 8 hours,to produce 80 rocking chairs.What is the productivity of these workers?

Accepted Answer

A)  2 chairs per hour 
B)  10 chairs per hour 
C)  1 hour per chair 
D)  80 chairs 
A)  2 chairs per hour 
B)  10 chairs per hour 
C)  1 hour per chair 
D)  80 chairs

Question 9

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,300 a ton.Over the same time a measure of the overall price level increased from 168 to 187.The price of iron ore increased by

Accepted Answer

A)  less than inflation,and this means it became relatively less scarce. 
B)  less than inflation,and this means it became scarcer. 
C)  more than inflation,and this means it became scarcer. 
D)  more than inflation,but this doesn't necessarily mean that it become scarcer. 
A)  less than inflation,and this means it became relatively less scarce. 
B)  less than inflation,and this means it became scarcer. 
C)  more than inflation,and this means it became scarcer. 
D)  more than inflation,but this doesn't necessarily mean that it become scarcer.

Question 10

Suppose that a new government is elected in Lawrencia.The new government takes steps toward improving the court system and reducing government corruption.The citizens of Lawrencia find these efforts credible and outsiders believe these changes will be effective and long lasting.These changes will probably

Accepted Answer

A)  raise real GDP per person and productivity in Lawrencia. 
B)  raise real GDP per person but not productivity in Lawrencia. 
C)  raise productivity but not real GDP per person in Lawrencia. 
D)  raise neither productivity nor real GDP per person in Lawrencia. 
A)  raise real GDP per person and productivity in Lawrencia. 
B)  raise real GDP per person but not productivity in Lawrencia. 
C)  raise productivity but not real GDP per person in Lawrencia. 
D)  raise neither productivity nor real GDP per person in Lawrencia.

Question 11

Average income has been stagnant for many years in

Accepted Answer

A)  Ireland. 
B)  Singapore. 
C)  Ethiopia. 
D)  All of the above are correct. 
A)  Ireland. 
B)  Singapore. 
C)  Ethiopia. 
D)  All of the above are correct.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Figure 25-1.On the horizontal axis,K/L represents capital (K)per worker (L).On the
vertical axis,Y/L represents output (Y)per worker (L).  
-Refer to Figure 25-1.Choose a point anywhere on the curve and call it point A.If the economy is at point A in 2007,then it will definitely remain at point A in 2008 if,between 2007 and 2008,

Accepted Answer

A)  the quantity of physical capital remains constant;the number of workers doubles;and human capital,natural resources,and technology all double as well. 
B)  the quantity of physical capital doubles;human capital,natural resources,and technology all double as well;and the number of workers remains constant. 
C)  the quantity of physical capital doubles;the number of workers doubles;and human capital,natural resources,and technology all double as well. 
D)  the quantity of physical capital doubles;the number of workers doubles;and human capital,natural resources,and technology remain constant. 
A)  the quantity of physical capital remains constant;the number of workers doubles;and human capital,natural resources,and technology all double as well. 
B)  the quantity of physical capital doubles;human capital,natural resources,and technology all double as well;and the number of workers remains constant. 
C)  the quantity of physical capital doubles;the number of workers doubles;and human capital,natural resources,and technology all double as well. 
D)  the quantity of physical capital doubles;the number of workers doubles;and human capital,natural resources,and technology remain constant.

Question 14

Countries with high population growth rates tend to have lower levels of educational attainment.

Accepted Answer

A) True 
 B)False

Question 15

Senator Noitall says that in order to help poor countries develop,the United States should: 1.Prevent U.S.corporations from investing in poor countries because they take profits that the poor countries should have;2.Not import goods from poor countries that use child labor;3.Work to promote political stability in poor countries;and 4.Reduce poor countries' reliance on market forces in their economies.How many of these ideas are likely to help poor countries grow?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 16

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 17

All else equal,if there are diminishing returns,then what happens to productivity if both capital and labor increase?

Accepted Answer

A)  Productivity will definitely fall. 
B)  Productivity will definitely be unchanged. 
C)  Productivity will definitely rise. 
D)  None of the above are necessarily correct. 
A)  Productivity will definitely fall. 
B)  Productivity will definitely be unchanged. 
C)  Productivity will definitely rise. 
D)  None of the above are necessarily correct.

Question 18

In 2006 real GDP in the imaginary nation of Populia was 750 billion and the population was 3 million.In 2007 real GDP was 907.5 billion and the population was 3.3 million.What was the growth rate of real GDP per person during the year?

Accepted Answer

A)  10 percent 
B)  14 percent 
C)  17 percent 
D)  21 percent 
A)  10 percent 
B)  14 percent 
C)  17 percent 
D)  21 percent

Question 19

The dictator of Turan has recently begun to arbitrarily seize farms belonging to his political opponents,and he has given the farms to his friends.His friends don't know much about farming.The courts in Turan have ruled that the seizures are illegal,but the dictator has ignored the rulings.Other things equal,we would expect that the growth rate in Turan will

Accepted Answer

A)  fall temporarily,but will return to where it was when the new owners learn how to farm. 
B)  increase because the total amount of human capital in the country will increase as the new owners learn how to farm. 
C)  fall and remain lower for a long time. 
D)  not be affected unless widespread civil disorder or civil war results. 
A)  fall temporarily,but will return to where it was when the new owners learn how to farm. 
B)  increase because the total amount of human capital in the country will increase as the new owners learn how to farm. 
C)  fall and remain lower for a long time. 
D)  not be affected unless widespread civil disorder or civil war results.

Question 20

The dictator of a certain country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones.Other things the same,in the long run this requirement would

Accepted Answer

A)  reduce real GDP per person and productivity. 
B)  reduce real GDP per person but not productivity. 
C)  reduce productivity but not real GDP per person. 
D)  None of the above is correct. 
A)  reduce real GDP per person and productivity. 
B)  reduce real GDP per person but not productivity. 
C)  reduce productivity but not real GDP per person. 
D)  None of the above is correct.

Exam 25: Production and Growth

The traditional view of the production process is that capital is subject to

In 2006,the typical Bangladeshi had about

Which of the following is human capital?

Given that a country's real output has increased,in which of the following cases can we be sure that its productivity also has increased?

Which of the following is correct?

Perry accumulated a lot of mathematical skills while in high school,college,and graduate school.Economists include these skills as part of Perry's

Which of the following is consistent with the catch-up effect?

Cedar Valley Furniture uses 5 workers,each working 8 hours,to produce 80 rocking chairs.What is the productivity of these workers?

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,300 a ton.Over the same time a measure of the overall price level increased from 168 to 187.The price of iron ore increased by

Average income has been stagnant for many years in

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

Countries with high population growth rates tend to have lower levels of educational attainment.

Outward-oriented policies

All else equal,if there are diminishing returns,then what happens to productivity if both capital and labor increase?

In 2006 real GDP in the imaginary nation of Populia was 750 billion and the population was 3 million.In 2007 real GDP was 907.5 billion and the population was 3.3 million.What was the growth rate of real GDP per person during the year?

The dictator of a certain country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones.Other things the same,in the long run this requirement 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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