Question 1

Exhibit 8-2 
 
-The shape of the per-worker production function in Exhibit 8-2 illustrates the law of increasing marginal returns to capital.

Accepted Answer

A) True 
 B)False

Question 2

The rules of the game refer to

Accepted Answer

A) any factor that facilitates production and exchange,such as tax laws and property rights 
B) a gradual but consistent change in the price level until a fair price is attained 
C) the set of election laws that ensure that all elections are fair 
D) the requirements placed on firms in earning a profit 
E) the requirements that households must supply labor to firms 
A) any factor that facilitates production and exchange,such as tax laws and property rights 
B) a gradual but consistent change in the price level until a fair price is attained 
C) the set of election laws that ensure that all elections are fair 
D) the requirements placed on firms in earning a profit 
E) the requirements that households must supply labor to firms

Question 3

Exhibit 8-2  
-Point C in Exhibit 8-2 represents an unatainable output per worker with current technology.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following best defines basic research?

Accepted Answer

A) the search for knowledge without regard to how that knowledge will be used 
B) research that is not complex since it addresses elementary questions 
C) research that seeks to apply scientific discoveries to the development of specific products 
D) the search for knowledge to solve a particular problem 
E) the search for a cure for skin cancer 
A) the search for knowledge without regard to how that knowledge will be used 
B) research that is not complex since it addresses elementary questions 
C) research that seeks to apply scientific discoveries to the development of specific products 
D) the search for knowledge to solve a particular problem 
E) the search for a cure for skin cancer

Question 5

Which of the following is not an example of an event that fosters instability?

Accepted Answer

A) September 11,2001 
B) A greater threat to airport security 
C) The Frankfurt Book Fair where publishers from around the world gather 
D) Suicide bombers attacking shops and restaurants 
E) All of the answers foster instability 
A) September 11,2001 
B) A greater threat to airport security 
C) The Frankfurt Book Fair where publishers from around the world gather 
D) Suicide bombers attacking shops and restaurants 
E) All of the answers foster instability

Question 6

Basic research seeks to answer specific questions or to apply scientific discoveries to the development of specific products.

Accepted Answer

A) True 
 B)False

Question 7

The only way the standard of living can increase is for labor productivity to increase.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would not be considered a developed country?

Accepted Answer

A) Pakistan 
B) the United States 
C) Japan 
D) Australia 
E) Belgium 
A) Pakistan 
B) the United States 
C) Japan 
D) Australia 
E) Belgium

Question 9

The reason why small changes in productivity growth rates have large long-term effects on economic growth over the long run is that

Accepted Answer

A) lower productivity growth makes labor discouraged,compounding the problem 
B) lower productivity growth effects on the economy are compounded over the years,leading to large cumulative effects 
C) when the productivity growth rate falls,output actually falls 
D) lower productivity growth for one resource means lower productivity growth for all resources 
E) output usually falls when productivity grows 
A) lower productivity growth makes labor discouraged,compounding the problem 
B) lower productivity growth effects on the economy are compounded over the years,leading to large cumulative effects 
C) when the productivity growth rate falls,output actually falls 
D) lower productivity growth for one resource means lower productivity growth for all resources 
E) output usually falls when productivity grows

Question 10

Applied research is the search for knowledge without regard to how that knowledge will be used.

Accepted Answer

A) True 
 B)False

Question 11

An increase in labor productivity necessarily means an increase in real GDP per capita if

Accepted Answer

A) real GDP increases 
B) the employment growth rate is greater than the population growth rate 
C) the employment growth rate is less than the population growth rate 
D) the size of the labor force remains constant 
E) real GDP increases more rapidly than nominal GDP 
A) real GDP increases 
B) the employment growth rate is greater than the population growth rate 
C) the employment growth rate is less than the population growth rate 
D) the size of the labor force remains constant 
E) real GDP increases more rapidly than nominal GDP

Question 12

Human capital represents

Accepted Answer

A) the equipment that labor uses on-the-job to improve labor productivity 
B) a direct method of measuring output-per-worker 
C) the education,skills and training embodied in workers 
D) the technology,developed by humans,that is embodied in equipment 
E) the social institutions created by people which promote the accumulation of equipment for production 
A) the equipment that labor uses on-the-job to improve labor productivity 
B) a direct method of measuring output-per-worker 
C) the education,skills and training embodied in workers 
D) the technology,developed by humans,that is embodied in equipment 
E) the social institutions created by people which promote the accumulation of equipment for production

Question 13

Exhibit 8-2  
-The movement from point A to point B in Exhibit 8-2 could illustrate the result of

Accepted Answer

A) an increase in the capital stock relative to the work force 
B) an increase in the labor productivity growth rate 
C) an increase in labor productivity because of higher quality capital 
D) all of the above 
E) a and b only 
A) an increase in the capital stock relative to the work force 
B) an increase in the labor productivity growth rate 
C) an increase in labor productivity because of higher quality capital 
D) all of the above 
E) a and b only

Question 14

Exhibit 8-1  
-In Exhibit 8-1,Tasmania is currently operating at point A on the per-worker production function.An improvement in technology will produce a movement from A to

Accepted Answer

A) B 
B) D 
C) E 
D) F 
E) G 
A) B 
B) D 
C) E 
D) F 
E) G

Question 15

The rules of the game refer to

Accepted Answer

A) any factor that facilitates production and exchange 
B) a gradual but consistent change in the price level until a fair price is attained 
C) the set of election laws that ensure that all votes are counted in every election 
D) the requirements place on firms earning a profit 
E) the requirements that households must provide funding for the investments that firms need to make 
A) any factor that facilitates production and exchange 
B) a gradual but consistent change in the price level until a fair price is attained 
C) the set of election laws that ensure that all votes are counted in every election 
D) the requirements place on firms earning a profit 
E) the requirements that households must provide funding for the investments that firms need to make

Question 16

Labor productivity measures

Accepted Answer

A) input per unit of labor 
B) output per unit of labor 
C) average input per unit of labor 
D) units of capital per unit of labor 
E) output per unit of capital 
A) input per unit of labor 
B) output per unit of labor 
C) average input per unit of labor 
D) units of capital per unit of labor 
E) output per unit of capital

Question 17

The resource whose productivity is most commonly measured is

Accepted Answer

A) labor 
B) capital 
C) land 
D) energy 
E) money 
A) labor 
B) capital 
C) land 
D) energy 
E) money

Question 18

Applied research

Accepted Answer

A) is designed to answer particular questions 
B) is more open-ended than basic research 
C) contributes less to visible output changes than does basic research 
D) is research done by a firm to market a good 
E) is research done by a firm during production of a good 
A) is designed to answer particular questions 
B) is more open-ended than basic research 
C) contributes less to visible output changes than does basic research 
D) is research done by a firm to market a good 
E) is research done by a firm during production of a good

Question 19

The term industrial policy refers to

Accepted Answer

A) the policy industries develop to promote growth 
B) industry policy related to marketing strategies 
C) the illegal activity that firms sometimes engage in to reduce competition 
D) government policy arrived at enhancing our competitiveness with foreign industry 
A) the policy industries develop to promote growth 
B) industry policy related to marketing strategies 
C) the illegal activity that firms sometimes engage in to reduce competition 
D) government policy arrived at enhancing our competitiveness with foreign industry

Question 20

Exhibit 8-1  
-In Exhibit 8-1,Tasmania is currently operating at point A on the per-worker production function.Capital deepening will produce a movement from A to

Accepted Answer

A) B 
B) D 
C) E 
D) F 
E) G 
A) B 
B) D 
C) E 
D) F 
E) G

Exam 8: Productivity and Growth

Exhibit 8-2 -The shape of the per-worker production function in Exhibit 8-2 illustrates the law of increasing marginal returns to capital.

The rules of the game refer to

Exhibit 8-2 -Point C in Exhibit 8-2 represents an unatainable output per worker with current technology.

Which of the following best defines basic research?

Which of the following is not an example of an event that fosters instability?

Basic research seeks to answer specific questions or to apply scientific discoveries to the development of specific products.

The only way the standard of living can increase is for labor productivity to increase.

Which of the following would not be considered a developed country?

The reason why small changes in productivity growth rates have large long-term effects on economic growth over the long run is that

Applied research is the search for knowledge without regard to how that knowledge will be used.

An increase in labor productivity necessarily means an increase in real GDP per capita if

Human capital represents

Exhibit 8-2 -The movement from point A to point B in Exhibit 8-2 could illustrate the result of

Exhibit 8-1 -In Exhibit 8-1,Tasmania is currently operating at point A on the per-worker production function.An improvement in technology will produce a movement from A to

The rules of the game refer to

Labor productivity measures

The resource whose productivity is most commonly measured is

Applied research

The term industrial policy refers to

Exhibit 8-1 -In Exhibit 8-1,Tasmania is currently operating at point A on the per-worker production function.Capital deepening will produce a movement from A to

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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