Question 1

Which of the following is false?

Accepted Answer

A) ​Accepting a reduction in current income to acquire education and training can increase future earning ability, which can raise the standard of living. 
B) ​Improvements in literacy stimulate economic growth by reducing barriers to the flow of information and raising labor productivity. 
C) ​One problem of providing enough education in poorer countries is that since children in developing countries are an important part of the labor force at a young age, there is a higher opportunity cost of education in terms of foregone contribution to family income. 
D) ​Investment alone guarantees economic growth per capita. 
A) ​Accepting a reduction in current income to acquire education and training can increase future earning ability, which can raise the standard of living. 
B) ​Improvements in literacy stimulate economic growth by reducing barriers to the flow of information and raising labor productivity. 
C) ​One problem of providing enough education in poorer countries is that since children in developing countries are an important part of the labor force at a young age, there is a higher opportunity cost of education in terms of foregone contribution to family income. 
D) ​Investment alone guarantees economic growth per capita.

Question 2

In developing countries, the opportunity cost of an education is relatively low compared to the cost in a highly developed country.

Accepted Answer

A) True 
 B)False

Question 3

A country will roughly double its GDP in five years if its annual growth rate is:

Accepted Answer

A) ​5 percent. 
B) ​7 percent. 
C) ​12 percent. 
D) ​14 percent. 
A) ​5 percent. 
B) ​7 percent. 
C) ​12 percent. 
D) ​14 percent.

Question 4

Which of the following did not result in economic growth?

Accepted Answer

A) ​Installing a network of irrigation ditches and pumping stations in order to grow fruits and vegetables in parts of southern California 
B) ​Cyrus McCormack inventing a threshing machine for harvesting grains 
C) ​After World War II, the U.S.instituting the GI bill, which provided education subsidies to soldiers being released from service duty 
D) ​Many citizens emigrating from a nation when a politically repressive regime takes office 
A) ​Installing a network of irrigation ditches and pumping stations in order to grow fruits and vegetables in parts of southern California 
B) ​Cyrus McCormack inventing a threshing machine for harvesting grains 
C) ​After World War II, the U.S.instituting the GI bill, which provided education subsidies to soldiers being released from service duty 
D) ​Many citizens emigrating from a nation when a politically repressive regime takes office

Question 5

Which of the following is not considered a significant factor contributing to economic growth by economists today?

Accepted Answer

A) ​work effort is less intense in the heat of the tropics 
B) ​an increase in the quantity of physical capital 
C) ​increased use of land inputs 
D) ​greater division of labor and specialization 
A) ​work effort is less intense in the heat of the tropics 
B) ​an increase in the quantity of physical capital 
C) ​increased use of land inputs 
D) ​greater division of labor and specialization

Question 6

According to the Malthusian prediction in the long run:

Accepted Answer

A) ​growth in real output of an economy would eventually become negative. 
B) ​growth in real output of an economy will eventually reach a stable level. 
C) ​scarcity would be completely eliminated. 
D) ​poverty would be completely eliminated. 
A) ​growth in real output of an economy would eventually become negative. 
B) ​growth in real output of an economy will eventually reach a stable level. 
C) ​scarcity would be completely eliminated. 
D) ​poverty would be completely eliminated.

Question 7

Education would be considered investments in:

Accepted Answer

A) ​physical capital 
B) ​financial capital 
C) ​human capital 
D) ​all of the above 
A) ​physical capital 
B) ​financial capital 
C) ​human capital 
D) ​all of the above

Question 8

People who make the arguments that economic growth will deplete natural resources make the same assumption Malthus made about resources. What is that assumption?

Accepted Answer

A) ​Natural resources will never run out because they are freely available from nature. 
B) ​Natural resources cannot be produced, so they are available in fixed quantities. 
C) ​That new technology will limit our dependence on natural resources so they won't be depleted. 
D) ​That the government will eventually step in to save the natural resources from depletion. 
A) ​Natural resources will never run out because they are freely available from nature. 
B) ​Natural resources cannot be produced, so they are available in fixed quantities. 
C) ​That new technology will limit our dependence on natural resources so they won't be depleted. 
D) ​That the government will eventually step in to save the natural resources from depletion.

Question 9

Improvements in and greater stocks of land, labor, capital, and entrepreneurial activity will shift the production possibilities curve:

Accepted Answer

A) ​outward, such that more goods and services can be produced. 
B) ​outward, such that the cost-of-living rises. 
C) ​inward, such that the marketplace experiences a decrease in price and output levels. 
D) ​inward, because more resources will be used up and not renewed. 
A) ​outward, such that more goods and services can be produced. 
B) ​outward, such that the cost-of-living rises. 
C) ​inward, such that the marketplace experiences a decrease in price and output levels. 
D) ​inward, because more resources will be used up and not renewed.

Question 10

Enforcement of property rights is likely to result in:

Accepted Answer

A) ​more incentives to invest. 
B) ​lower rates of economic growth. 
C) ​political instability. 
D) ​corruption. 
A) ​more incentives to invest. 
B) ​lower rates of economic growth. 
C) ​political instability. 
D) ​corruption.

Question 11

Which of the following factors contribute to economic growth?

Accepted Answer

A) ​growth in physical capital 
B) ​technological advances 
C) ​an increase in the productivity of labor 
D) ​all of the above 
A) ​growth in physical capital 
B) ​technological advances 
C) ​an increase in the productivity of labor 
D) ​all of the above

Question 12

Given a constant rate of growth of real GDP, what would lead to an increasing real GDP per capita?

Accepted Answer

A) ​a rate of population growth that is less than the rate of growth of real GDP 
B) ​a rate of population growth that is greater than the rate of growth of real GDP 
C) ​an increase in the size of the labor force 
D) ​an increase in the capital stock 
A) ​a rate of population growth that is less than the rate of growth of real GDP 
B) ​a rate of population growth that is greater than the rate of growth of real GDP 
C) ​an increase in the size of the labor force 
D) ​an increase in the capital stock

Question 13

Which of the following will not contribute to increasing the stock of physical or human capital of a nation?

Accepted Answer

A) ​an increase in savings 
B) ​a reduction in taxes on capital gains and stock dividends 
C) ​a lack of enforcement of private property rights 
D) ​the subsidization of higher education 
A) ​an increase in savings 
B) ​a reduction in taxes on capital gains and stock dividends 
C) ​a lack of enforcement of private property rights 
D) ​the subsidization of higher education

Question 14

Foreign direct investment-capital injections from abroad-can promote economic growth.

Accepted Answer

A) True 
 B)False

Question 15

In countries with low levels of income:

Accepted Answer

A) ​the opportunity cost of an education is higher than in high-income countries. 
B) ​illiteracy rates are higher than in high-income countries. 
C) ​economies are primarily agricultural-based. 
D) ​all of the above tend to be true. 
A) ​the opportunity cost of an education is higher than in high-income countries. 
B) ​illiteracy rates are higher than in high-income countries. 
C) ​economies are primarily agricultural-based. 
D) ​all of the above tend to be true.

Question 16

In a consumer-oriented economy, the decision to save in order to promote economic growth:

Accepted Answer

A) ​means a sacrifice of current consumption in order to enhance future consumption. 
B) ​must be enforced by high levels of taxation. 
C) ​cannot be expected to benefit future generations. 
D) ​none of the above. 
A) ​means a sacrifice of current consumption in order to enhance future consumption. 
B) ​must be enforced by high levels of taxation. 
C) ​cannot be expected to benefit future generations. 
D) ​none of the above.

Question 17

Which of the following is true?

Accepted Answer

A) ​The Rule of 70 says that the number of years necessary for a nation to double its output is approximately equal to the nation's growth rate divided by 70. 
B) ​Economic growth is usually measured by the annual percent change in the nominal output of goods and services per capita. 
C) ​An increase in labor input necessarily increases output per capita. 
D) ​Neither the initial development process nor the sustained growth of an economy is dependent on a large natural resource base. 
A) ​The Rule of 70 says that the number of years necessary for a nation to double its output is approximately equal to the nation's growth rate divided by 70. 
B) ​Economic growth is usually measured by the annual percent change in the nominal output of goods and services per capita. 
C) ​An increase in labor input necessarily increases output per capita. 
D) ​Neither the initial development process nor the sustained growth of an economy is dependent on a large natural resource base.

Question 18

Which of the following is not considered a factor contributing to economic growth?

Accepted Answer

A) ​Growth in the quantity and quality of labor resources used 
B) ​Growth in physical capital inputs (machines, tools, buildings, and inventories) 
C) ​Growth in the money supply relative to the growth of final goods and services 
D) ​Government protection of property rights 
A) ​Growth in the quantity and quality of labor resources used 
B) ​Growth in physical capital inputs (machines, tools, buildings, and inventories) 
C) ​Growth in the money supply relative to the growth of final goods and services 
D) ​Government protection of property rights

Question 19

The measure most commonly used by economists to gauge the standard of living of a nation is:

Accepted Answer

A) ​labor productivity. 
B) ​nominal GDP. 
C) ​real GDP. 
D) ​real GDP per capita. 
A) ​labor productivity. 
B) ​nominal GDP. 
C) ​real GDP. 
D) ​real GDP per capita.

Question 20

Why is China still poor in per capita terms despite having the second-largest economy in the world in terms of real GDP?

Accepted Answer

China has over 1 billion peopl

Exam 12: Firms in Perfectly Competitive Markets

Which of the following is false?

In developing countries, the opportunity cost of an education is relatively low compared to the cost in a highly developed country.

A country will roughly double its GDP in five years if its annual growth rate is:

Which of the following did not result in economic growth?

Which of the following is not considered a significant factor contributing to economic growth by economists today?

According to the Malthusian prediction in the long run:

Education would be considered investments in:

People who make the arguments that economic growth will deplete natural resources make the same assumption Malthus made about resources. What is that assumption?

Improvements in and greater stocks of land, labor, capital, and entrepreneurial activity will shift the production possibilities curve:

Enforcement of property rights is likely to result in:

Which of the following factors contribute to economic growth?

Given a constant rate of growth of real GDP, what would lead to an increasing real GDP per capita?

Which of the following will not contribute to increasing the stock of physical or human capital of a nation?

Foreign direct investment-capital injections from abroad-can promote economic growth.

In countries with low levels of income:

In a consumer-oriented economy, the decision to save in order to promote economic growth:

Which of the following is true?

Which of the following is not considered a factor contributing to economic growth?

The measure most commonly used by economists to gauge the standard of living of a nation is:

Why is China still poor in per capita terms despite having the second-largest economy in the world in terms of real GDP?

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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