Question 1

How does opportunity cost to education contribute to low school enrollments in developing countries?

Accepted Answer

In developing countries, children are often important members of the labor force. If children attend school, they cannot be of help in economic activities like agriculture, which rural households in depend on. This high opportunity cost to education, prevents children from entering school to gain formal education.
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Question 2

An increase in the quantity of labor inputs always leads to economic growth.

Accepted Answer

A) True 
 B)False  False

Question 3

According to the rule of 70,

Accepted Answer

A) ​if a country is growing at 14% per year, its output will double in approximately 5 years. 
B) ​if a country is growing at 10% per year, its output will double in approximately 7 years. 
C) ​if a country is growing at 2% per year, its output will double in approximately 35 years. 
D) ​all of the above are true. 
A) ​if a country is growing at 14% per year, its output will double in approximately 5 years. 
B) ​if a country is growing at 10% per year, its output will double in approximately 7 years. 
C) ​if a country is growing at 2% per year, its output will double in approximately 35 years. 
D) ​all of the above are true. D

Question 4

As more capital per worker is added, a per worker production function generally becomes:

Accepted Answer

A) ​flatter because capital is subject to diminishing marginal returns. 
B) ​flatter because labor is subject to diminishing marginal returns. 
C) ​flatter because capital is subject to increasing marginal returns. 
D) ​steeper because capital is subject to diminishing marginal returns. 
A) ​flatter because capital is subject to diminishing marginal returns. 
B) ​flatter because labor is subject to diminishing marginal returns. 
C) ​flatter because capital is subject to increasing marginal returns. 
D) ​steeper because capital is subject to diminishing marginal returns.

Question 5

Which of the following affect the growth in real GDP per capita?

Accepted Answer

A) ​the total production of final goods in the economy. 
B) ​the population. 
C) ​the production of final services in the economy. 
D) ​all of the above 
A) ​the total production of final goods in the economy. 
B) ​the population. 
C) ​the production of final services in the economy. 
D) ​all of the above

Question 6

New growth theorists believe that increased economic growth is primarily driven by:

Accepted Answer

A) ​higher level of savings. 
B) ​higher level of capital investments. 
C) ​increased foreign investment. 
D) ​technological innovation and ideas. 
A) ​higher level of savings. 
B) ​higher level of capital investments. 
C) ​increased foreign investment. 
D) ​technological innovation and ideas.

Question 7

If population is expanding at a faster rate than a country's real output is expanding:

Accepted Answer

A) ​real per capita output would increase. 
B) ​real per capita output would decrease. 
C) ​the production possibilities curve for the country as a whole will be shifting outward. 
D) ​both (b) and (c) would be true. 
A) ​real per capita output would increase. 
B) ​real per capita output would decrease. 
C) ​the production possibilities curve for the country as a whole will be shifting outward. 
D) ​both (b) and (c) would be true.

Question 8

Higher rates of real economic growth can allow a less-developed, low per capita income country to attain the same standard of living as a more developed, high per capita income country in a few years.

Accepted Answer

A) True 
 B)False

Question 9

How much a country's economy will produce at its potential output is also called:

Accepted Answer

A) ​the trough of the business cycle. 
B) ​its economic welfare. 
C) ​the trend line. 
D) ​the natural rate of output. 
A) ​the trough of the business cycle. 
B) ​its economic welfare. 
C) ​the trend line. 
D) ​the natural rate of output.

Question 10

Which of the government policies below is not likely to encourage per capita economic growth?

Accepted Answer

A) ​High taxes on companies that spend a lot on capital formation 
B) ​The use of tax revenues for investment and capital formation 
C) ​Special subsidies for capital-intensive forms of production 
D) ​Promotion of education and training programs for workers 
A) ​High taxes on companies that spend a lot on capital formation 
B) ​The use of tax revenues for investment and capital formation 
C) ​Special subsidies for capital-intensive forms of production 
D) ​Promotion of education and training programs for workers

Question 11

Which of the following factors contribute to economic growth?

Accepted Answer

A) ​a decline in the stock of physical capital 
B) ​the discovery of new oil reserves 
C) ​a decrease in the productivity of labor 
D) ​a decrease in the quantity of labor due to emigration 
A) ​a decline in the stock of physical capital 
B) ​the discovery of new oil reserves 
C) ​a decrease in the productivity of labor 
D) ​a decrease in the quantity of labor due to emigration

Question 12

Which of the following statements is not correct?

Accepted Answer

A) ​Economic growth is best measured by the annual percentage change in nominal GDP per capita. 
B) ​An economy producing along the production possibilities curve is operating at its potential output. 
C) ​Economic growth is a crucial determinant of people's well-being. 
D) ​If the quality of labor improves, an economy's production possibilities curve will shift outward. 
A) ​Economic growth is best measured by the annual percentage change in nominal GDP per capita. 
B) ​An economy producing along the production possibilities curve is operating at its potential output. 
C) ​Economic growth is a crucial determinant of people's well-being. 
D) ​If the quality of labor improves, an economy's production possibilities curve will shift outward.

Question 13

The GI Bill provided educational opportunities to many young men returning from military service. Using a production possibilities curve, demonstrate how the GI Bill affected economic growth and explain your answer.

Accepted Answer

Implementation of the GI Bill shifted th

Question 14

Which one of the following will determine the size of the production possibilities curve?

Accepted Answer

A) ​amount of labor 
B) ​amount of capital 
C) ​entrepreneurship 
D) ​all of the above 
A) ​amount of labor 
B) ​amount of capital 
C) ​entrepreneurship 
D) ​all of the above

Question 15

A technological advance may come in either the form of a product or a process innovation.

Accepted Answer

A) True 
 B)False

Question 16

Rapid population growth can threaten sustained economic growth if it:

Accepted Answer

A) ​leads to diminishing marginal returns in production. 
B) ​remains unmonitored by government agencies. 
C) ​enables economies of scale in production to be exploited. 
D) ​leads to increased capital formation. 
A) ​leads to diminishing marginal returns in production. 
B) ​remains unmonitored by government agencies. 
C) ​enables economies of scale in production to be exploited. 
D) ​leads to increased capital formation.

Question 17

To achieve a high standard of living, a nation should:

Accepted Answer

A) ​increase welfare payments to the poor. 
B) ​use less capital and more labor in the production process. 
C) ​promote economic growth. 
D) ​increase the tax deduction for child dependents. 
A) ​increase welfare payments to the poor. 
B) ​use less capital and more labor in the production process. 
C) ​promote economic growth. 
D) ​increase the tax deduction for child dependents.

Question 18

If the educational attainment of a nation's population increases, the economy's production possibilities curve shifts inward.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following affects the rate of economic growth?

Accepted Answer

A) ​the quality of available resources. 
B) ​the quantity of available resources. 
C) ​technological change. 
D) ​all of the above. 
A) ​the quality of available resources. 
B) ​the quantity of available resources. 
C) ​technological change. 
D) ​all of the above.

Question 20

Which of the following will not affect the size of a nation's physical or human capital stock?

Accepted Answer

A) ​A new factory is constructed. 
B) ​A new machine is installed in company's plant. 
C) ​An eighteen-year-old enrolls in college as a full-time student. 
D) ​All of the above affect the size of a nation's capital stock. 
A) ​A new factory is constructed. 
B) ​A new machine is installed in company's plant. 
C) ​An eighteen-year-old enrolls in college as a full-time student. 
D) ​All of the above affect the size of a nation's capital stock.

Exam 12: Firms in Perfectly Competitive Markets

How does opportunity cost to education contribute to low school enrollments in developing countries?

An increase in the quantity of labor inputs always leads to economic growth.

According to the rule of 70,

As more capital per worker is added, a per worker production function generally becomes:

Which of the following affect the growth in real GDP per capita?

New growth theorists believe that increased economic growth is primarily driven by:

If population is expanding at a faster rate than a country's real output is expanding:

Higher rates of real economic growth can allow a less-developed, low per capita income country to attain the same standard of living as a more developed, high per capita income country in a few years.

How much a country's economy will produce at its potential output is also called:

Which of the government policies below is not likely to encourage per capita economic growth?

Which of the following factors contribute to economic growth?

Which of the following statements is not correct?

The GI Bill provided educational opportunities to many young men returning from military service. Using a production possibilities curve, demonstrate how the GI Bill affected economic growth and explain your answer.

Which one of the following will determine the size of the production possibilities curve?

A technological advance may come in either the form of a product or a process innovation.

Rapid population growth can threaten sustained economic growth if it:

To achieve a high standard of living, a nation should:

If the educational attainment of a nation's population increases, the economy's production possibilities curve shifts inward.

Which of the following affects the rate of economic growth?

Which of the following will not affect the size of a nation's physical or human capital stock?

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

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