Question 1

On a production function,as capital per worker increases,output per worker

Accepted Answer

A) increases.This increase is larger at larger values of capital per worker. 
B) increases.This increase is smaller at larger values of capital per worker. 
C) decreases.This decrease is larger at larger value of capital per worker. 
D) decreases.This decrease is smaller at larger value of capital per worker. 
A) increases.This increase is larger at larger values of capital per worker. 
B) increases.This increase is smaller at larger values of capital per worker. 
C) decreases.This decrease is larger at larger value of capital per worker. 
D) decreases.This decrease is smaller at larger value of capital per worker.

Question 2

If a newly elected government takes actions that makes its country's courts more efficient and less corrupt,then

Accepted Answer

A) producers will have greater confidence that they will benefit from their efforts. 
B) producers are likely to be more specialized. 
C) buyers and sellers will be more likely to honor contracts. 
D) All of the above are correct. 
A) producers will have greater confidence that they will benefit from their efforts. 
B) producers are likely to be more specialized. 
C) buyers and sellers will be more likely to honor contracts. 
D) All of the above are correct.

Question 3

Which of the following is correct?

Accepted Answer

A) If developing countries limit career and educational opportunities for women,birth rates are likely to be lower. 
B) Growth rates in developed and developing countries are nearly the same. 
C) Historically,in periods where the rate of population growth was high,so was the rate of growth in world real GDP per person. 
D) None of the above is correct. 
A) If developing countries limit career and educational opportunities for women,birth rates are likely to be lower. 
B) Growth rates in developed and developing countries are nearly the same. 
C) Historically,in periods where the rate of population growth was high,so was the rate of growth in world real GDP per person. 
D) None of the above is correct.

Question 4

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.The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Accepted Answer

A) In the long run,a higher saving rate leads to a higher growth rate of productivity. 
B) In the long run,a higher saving rate leads to a higher growth rate of income. 
C) Returns to capital become increasingly smaller as the amount of capital per worker increases. 
D) All of the above are correct. 
A) In the long run,a higher saving rate leads to a higher growth rate of productivity. 
B) In the long run,a higher saving rate leads to a higher growth rate of income. 
C) Returns to capital become increasingly smaller as the amount of capital per worker increases. 
D) All of the above are correct.

Question 5

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 6

Which of the following is an observation made by economist Michael Kremer?

Accepted Answer

A) World growth rates increased as the population increased. 
B) Technological progress allows for increasing population because of advances in agriculture. 
C) World population is growing so rapidly that soon it will outstrip natural resources and our standard of living will decline. 
D) All of the above are observations made by Kremer. 
A) World growth rates increased as the population increased. 
B) Technological progress allows for increasing population because of advances in agriculture. 
C) World population is growing so rapidly that soon it will outstrip natural resources and our standard of living will decline. 
D) All of the above are observations made by Kremer.

Question 7

Two countries are the same,except one is poorer.Assuming the traditional assumption about the production function is made there are

Accepted Answer

A) diminishing returns to capital so the poor country grows slower. 
B) increasing returns to capital so the poor country grows slower. 
C) diminishing returns to capital so the poor country grows faster. 
D) increasing returns to capital so the poor country grows faster. 
A) diminishing returns to capital so the poor country grows slower. 
B) increasing returns to capital so the poor country grows slower. 
C) diminishing returns to capital so the poor country grows faster. 
D) increasing returns to capital so the poor country grows faster.

Question 8

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 9

Other things equal,the likelihood that a country will experience a relatively-high level of income is greater if the country

Accepted Answer

A) pursues inward-oriented policies. 
B) has natural seaports. 
C) minimizes the role of the courts in its economy. 
D) enacts policies to encourage consumption and discourage saving. 
A) pursues inward-oriented policies. 
B) has natural seaports. 
C) minimizes the role of the courts in its economy. 
D) enacts policies to encourage consumption and discourage saving.

Question 10

If a country's saving rate increases,then in the long run

Accepted Answer

A) productivity is higher but real GDP per person is not higher. 
B) real GDP per person is higher but productivity is not higher. 
C) productivity and real GDP per person are both higher. 
D) neither productivity nor real GDP per person is higher. 
A) productivity is higher but real GDP per person is not higher. 
B) real GDP per person is higher but productivity is not higher. 
C) productivity and real GDP per person are both higher. 
D) neither productivity nor real GDP per person is higher.

Question 11

If an American-based firm opens and operates a factory in China,then it is engaging in

Accepted Answer

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

Question 12

Suppose a U.S.automaker builds and operates a new factory in Italy.Future production from such an investment will

Accepted Answer

A) increase Italian GDP more than it increases Italian GNP. 
B) increase Italian GNP more than it increases Italian GDP. 
C) have no affect on Italian GNP,but will increase Italian GDP. 
D) have no affect on either Italian GDP or GNP. 
A) increase Italian GDP more than it increases Italian GNP. 
B) increase Italian GNP more than it increases Italian GDP. 
C) have no affect on Italian GNP,but will increase Italian GDP. 
D) have no affect on either Italian GDP or GNP.

Question 13

All else equal,if there are diminishing returns,then which of the following is true if a country increases its capital by one unit?

Accepted Answer

A) Output will rise by more than it did when the previous unit was added. 
B) Output will rise but by less than it did when the previous unit was added. 
C) Output will fall by more than it did when the previous unit was added. 
D) Output will fall but by less then it did when the previous unit was added. 
A) Output will rise by more than it did when the previous unit was added. 
B) Output will rise but by less than it did when the previous unit was added. 
C) Output will fall by more than it did when the previous unit was added. 
D) Output will fall but by less then it did when the previous unit was added.

Question 14

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 15

Malthus predicted that the power of population

Accepted Answer

A) was greater than the power of the earth to produce subsistence.His forecast was on the mark. 
B) was greater than the power of the earth to produce subsistence.His forecast was off the mark. 
C) was less than the power of the earth to produce subsistence.His forecast was on the mark. 
D) was less than the power of the earth to produce subsistence.His forecast was off the mark. 
A) was greater than the power of the earth to produce subsistence.His forecast was on the mark. 
B) was greater than the power of the earth to produce subsistence.His forecast was off the mark. 
C) was less than the power of the earth to produce subsistence.His forecast was on the mark. 
D) was less than the power of the earth to produce subsistence.His forecast was off the mark.

Question 16

Once an idea enters society's pool of knowledge,the idea becomes a

Accepted Answer

A) societal good. 
B) private good. 
C) public good. 
D) proprietary good. 
A) societal good. 
B) private good. 
C) public good. 
D) proprietary good.

Question 17

When a society decides to increase its quantity of physical capital,the society

Accepted Answer

A) can avoid the usual need to face trade-offs. 
B) is apparently not very concerned about its rate of economic growth in the future. 
C) is in effect deciding to consume fewer goods and services in the present. 
D) is in effect deciding to save less of its current income in the present. 
A) can avoid the usual need to face trade-offs. 
B) is apparently not very concerned about its rate of economic growth in the future. 
C) is in effect deciding to consume fewer goods and services in the present. 
D) is in effect deciding to save less of its current income in the present.

Question 18

National defense and knowledge are generally considered to be

Accepted Answer

A) private goods. 
B) public goods. 
C) proprietary goods. 
D) societal goods. 
A) private goods. 
B) public goods. 
C) proprietary goods. 
D) societal goods.

Question 19

In the long run,a higher saving rate

Accepted Answer

A) cannot increase the capital stock. 
B) increases the growth rate of income. 
C) increases the growth rate of productivity. 
D) None of the above is correct. 
A) cannot increase the capital stock. 
B) increases the growth rate of income. 
C) increases the growth rate of productivity. 
D) None of the above is correct.

Question 20

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.

Exam 12: Production and Growth: Economic Growth and Public Policy

On a production function,as capital per worker increases,output per worker

If a newly elected government takes actions that makes its country's courts more efficient and less corrupt,then

Which of the following is correct?

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.The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

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

Which of the following is an observation made by economist Michael Kremer?

Two countries are the same,except one is poorer.Assuming the traditional assumption about the production function is made there are

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

Other things equal,the likelihood that a country will experience a relatively-high level of income is greater if the country

If a country's saving rate increases,then in the long run

If an American-based firm opens and operates a factory in China,then it is engaging in

Suppose a U.S.automaker builds and operates a new factory in Italy.Future production from such an investment will

All else equal,if there are diminishing returns,then which of the following is true if a country increases its capital by one unit?

Inward-oriented policies

Malthus predicted that the power of population

Once an idea enters society's pool of knowledge,the idea becomes a

When a society decides to increase its quantity of physical capital,the society

National defense and knowledge are generally considered to be

In the long run,a higher saving rate

Which of the following is not correct?

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion