Question 1

All else equal,if there are diminishing returns,then if a country raised its capital by 100 units last year and by 100 units this year,

Accepted Answer

A)  the increase in output was greater for this year than last year. 
B)  the increase in output was greater last year than this year. 
C)  the increase in output is the same in both years. 
D)  None of the above is necessarily correct. 
A)  the increase in output was greater for this year than last year. 
B)  the increase in output was greater last year than this year. 
C)  the increase in output is the same in both years. 
D)  None of the above is necessarily correct.

Question 2

The return to schooling for society is higher than the return to schooling for the individual if

Accepted Answer

A)  the concept of diminishing returns applies to education. 
B)  the concept of constant returns to scale applies to education. 
C)  human capital conveys positive externalities. 
D)  investment in human capital involves no opportunity costs. 
A)  the concept of diminishing returns applies to education. 
B)  the concept of constant returns to scale applies to education. 
C)  human capital conveys positive externalities. 
D)  investment in human capital involves no opportunity costs.

Question 3

The relationship between the quantity of output created and the quantity of inputs needed to create it is called

Accepted Answer

A)  the capital accumulation function. 
B)  technological knowledge. 
C)  the production function. 
D)  human capital. 
A)  the capital accumulation function. 
B)  technological knowledge. 
C)  the production function. 
D)  human capital.

Question 4

All else equal,which of the following would tend to cause real GDP per person to rise?

Accepted Answer

A)  a change from outward-oriented policies to inward-oriented policies 
B)  an increase in investment in human capital 
C)  a weakening of property rights 
D)  All of the above are correct. 
A)  a change from outward-oriented policies to inward-oriented policies 
B)  an increase in investment in human capital 
C)  a weakening of property rights 
D)  All of the above are correct.

Question 5

Other things the same,a country that increases its savings rate will have

Accepted Answer

A)  higher future capital and higher future real GDP per person. 
B)  higher future capital but not higher future real GDP per person. 
C)  higher future real GDP per person but not higher future capital. 
D)  neither higher future capital nor higher future real GDP per person. 
A)  higher future capital and higher future real GDP per person. 
B)  higher future capital but not higher future real GDP per person. 
C)  higher future real GDP per person but not higher future capital. 
D)  neither higher future capital nor higher future real GDP per person.

Question 6

Which of the following statements is correct?

Accepted Answer

A)  In an economy-wide sense,property rights are an important prerequisite for the price system to work. 
B)  Property rights give people the ability to exercise authority over the resources they own. 
C)  Based on the available evidence,the existence of well-established and well-enforced property rights appears to be associated with an enhanced standard of living. 
D)  All of the above are correct. 
A)  In an economy-wide sense,property rights are an important prerequisite for the price system to work. 
B)  Property rights give people the ability to exercise authority over the resources they own. 
C)  Based on the available evidence,the existence of well-established and well-enforced property rights appears to be associated with an enhanced standard of living. 
D)  All of the above are correct.

Question 7

A management professor discovers a way for corporate management to operate more efficiently.He publishes his findings in a journal.His findings are

Accepted Answer

A)  proprietary and common knowledge. 
B)  neither proprietary nor common knowledge. 
C)  proprietary,but not common,knowledge. 
D)  common,but not proprietary,knowledge. 
A)  proprietary and common knowledge. 
B)  neither proprietary nor common knowledge. 
C)  proprietary,but not common,knowledge. 
D)  common,but not proprietary,knowledge.

Question 8

Which of the following provide benefits to society at large and not just to the person(s)who pursues it?

Accepted Answer

A)  both technological knowledge that is a public good and education 
B)  technological knowledge that is a public good,but not education 
C)  education,but not technological knowledge that is a public good 
D)  neither education,nor technological knowledge that is a public good 
A)  both technological knowledge that is a public good and education 
B)  technological knowledge that is a public good,but not education 
C)  education,but not technological knowledge that is a public good 
D)  neither education,nor technological knowledge that is a public good

Question 9

Nathan owns a bakery that bakes only cakes.All of his bakers work 8 hours per day.In 2006,he employed 5 bakers and they produced 200 cakes each day.In 2007,he employed 6 bakers and they produced 249 cakes each day.In Nathan's bakery,productivity

Accepted Answer

A)  decreased by 2.33 percent between 2006 and 2007. 
B)  increased by 2.33 percent between 2006 and 2007. 
C)  increased by 3.75 percent between 2006 and 2007. 
D)  increased by 24.50 percent between 2006 and 2007. 
A)  decreased by 2.33 percent between 2006 and 2007. 
B)  increased by 2.33 percent between 2006 and 2007. 
C)  increased by 3.75 percent between 2006 and 2007. 
D)  increased by 24.50 percent between 2006 and 2007.

Question 10

Which of the following is correct?

Accepted Answer

A)  Although levels of real GDP per person vary substantially from country to country,the growth rate of real GDP per person is similar across countries. 
B)  Productivity is not closely linked to government policies. 
C)  The level of real GDP per person is a good gauge of economic prosperity,and the growth rate of real GDP per person is a good gauge of economic progress. 
D)  Productivity may be measured by the growth rate of real GDP per person. 
A)  Although levels of real GDP per person vary substantially from country to country,the growth rate of real GDP per person is similar across countries. 
B)  Productivity is not closely linked to government policies. 
C)  The level of real GDP per person is a good gauge of economic prosperity,and the growth rate of real GDP per person is a good gauge of economic progress. 
D)  Productivity may be measured by the growth rate of real GDP per person.

Question 11

Other things the same,higher population growth

Accepted Answer

A)  raises the amount of physical capital per worker and there is some evidence that it raises the pace of technological progress. 
B)  raises the amount of physical capital per worker,but there is some evidence that it reduces the pace of technological progress. 
C)  reduces the amount of physical capital per worker,but there is some evidence that it raises the pace of technological progress. 
D)  reduces the amount of physical capital per worker and there is some evidence that it reduces the pace of technological progress. 
A)  raises the amount of physical capital per worker and there is some evidence that it raises the pace of technological progress. 
B)  raises the amount of physical capital per worker,but there is some evidence that it reduces the pace of technological progress. 
C)  reduces the amount of physical capital per worker,but there is some evidence that it raises the pace of technological progress. 
D)  reduces the amount of physical capital per worker and there is some evidence that it reduces the pace of technological progress.

Question 12

Real GDP per person is $30,000 in Country A,$20,000 in Country B,and $11,000 in Country C.Saving per person is $1,000 in all three countries.Other things equal,we would expect that

Accepted Answer

A)  all three countries will grow at the same rate. 
B)  Country A will grow the fastest. 
C)  Country B will grow the fastest. 
D)  Country C will grow the fastest. 
A)  all three countries will grow at the same rate. 
B)  Country A will grow the fastest. 
C)  Country B will grow the fastest. 
D)  Country C will grow the fastest.

Question 13

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor.What was their productivity?

Accepted Answer

A)  1/8 cabinet per hour 
B)  8 hours per cabinet 
C)  40 cabinets 
D)  None of the above is correct. 
A)  1/8 cabinet per hour 
B)  8 hours per cabinet 
C)  40 cabinets 
D)  None of the above is correct.

Question 14

Productivity can be computed as number of hours worked divided by output.

Accepted Answer

A) True 
 B)False

Question 15

Suppose that real GDP grew more in Country A than in Country B last year.

Accepted Answer

A)  Country A must have a higher standard of living than country B. 
B)  Country A's productivity must have grown faster than country B's. 
C)  Both of the above are correct. 
D)  None of the above is correct. 
A)  Country A must have a higher standard of living than country B. 
B)  Country A's productivity must have grown faster than country B's. 
C)  Both of the above are correct. 
D)  None of the above is correct.

Question 16

If the price of a good has risen over time,

Accepted Answer

A)  it must have become more scarce. 
B)  it must have become less scarce. 
C)  it has become more scarce only if the price adjusted for inflation has risen. 
D)  it has become less scarce only if the price adjusted for inflation has risen. 
A)  it must have become more scarce. 
B)  it must have become less scarce. 
C)  it has become more scarce only if the price adjusted for inflation has risen. 
D)  it has become less scarce only if the price adjusted for inflation has risen.

Question 17

In 1870,the richest country in the world was

Accepted Answer

A)  the United States. 
B)  Spain. 
C)  the United Kingdom. 
D)  Germany. 
A)  the United States. 
B)  Spain. 
C)  the United Kingdom. 
D)  Germany.

Question 18

Studies on health,nutrition,and living standards suggest that

Accepted Answer

A)  short height can be an indicator of malnutrition. 
B)  workers' height and their productivity are unrelated. 
C)  nations' economic development and their workers' eating habits are unrelated. 
D)  there is no causal link between nutrition and economic growth. 
A)  short height can be an indicator of malnutrition. 
B)  workers' height and their productivity are unrelated. 
C)  nations' economic development and their workers' eating habits are unrelated. 
D)  there is no causal link between nutrition and economic growth.

Question 19

One reason that governments may find it useful to sponsor universities and basic research is that to a large extent knowledge is generally a private good.

Accepted Answer

A) True 
 B)False

Question 20

In the length of one generation,which of the following countries has gone from being among the poorest countries in the world to being among the richest?

Accepted Answer

A)  Chad 
B)  Ethiopia 
C)  India 
D)  South Korea 
A)  Chad 
B)  Ethiopia 
C)  India 
D)  South Korea

Exam 25: Production and Growth

All else equal,if there are diminishing returns,then if a country raised its capital by 100 units last year and by 100 units this year,

The return to schooling for society is higher than the return to schooling for the individual if

The relationship between the quantity of output created and the quantity of inputs needed to create it is called

All else equal,which of the following would tend to cause real GDP per person to rise?

Other things the same,a country that increases its savings rate will have

Which of the following statements is correct?

A management professor discovers a way for corporate management to operate more efficiently.He publishes his findings in a journal.His findings are

Which of the following provide benefits to society at large and not just to the person(s)who pursues it?

Nathan owns a bakery that bakes only cakes.All of his bakers work 8 hours per day.In 2006,he employed 5 bakers and they produced 200 cakes each day.In 2007,he employed 6 bakers and they produced 249 cakes each day.In Nathan's bakery,productivity

Which of the following is correct?

Other things the same,higher population growth

Real GDP per person is $30,000 in Country A,$20,000 in Country B,and $11,000 in Country C.Saving per person is $1,000 in all three countries.Other things equal,we would expect that

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor.What was their productivity?

Productivity can be computed as number of hours worked divided by output.

Suppose that real GDP grew more in Country A than in Country B last year.

If the price of a good has risen over time,

In 1870,the richest country in the world was

Studies on health,nutrition,and living standards suggest that

One reason that governments may find it useful to sponsor universities and basic research is that to a large extent knowledge is generally a private good.

In the length of one generation,which of the following countries has gone from being among the poorest countries in the world to being among the richest?

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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