Question 1

What particularly important role do courts play in a market economy?

Accepted Answer

Courts enforce prope

Question 2

Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500.

Accepted Answer

A)  Upland has higher productivity and higher real GDP per person than Lowland. 
B)  Upland has higher productivity but lower real GDP per person than Lowland. 
C)  Upland has lower productivity but higher real GDP per person than Lowland. 
D)  Upland has lower productivity and lower real GDP per person than Lowland. 
A)  Upland has higher productivity and higher real GDP per person than Lowland. 
B)  Upland has higher productivity but lower real GDP per person than Lowland. 
C)  Upland has lower productivity but higher real GDP per person than Lowland. 
D)  Upland has lower productivity and lower real GDP per person than Lowland.

Question 3

Other things the same, domestic investment will increase a country's real GDP by more than foreign investment.

Accepted Answer

A) True 
 B)False

Question 4

Countries with more than 80 percent of their population living within 100 kilometers of a coast will have an average GDP per person that is

Accepted Answer

A)  around four times a country with less than 20 percent of the population living near the coast. 
B)  around ten times a country with less than 20 percent of the population living near the coast. 
C)  around twenty times a country with less than 20 percent of the population living near the coast. 
D)  around fifty times a country with less than 20 percent of the population living near the coast. 
A)  around four times a country with less than 20 percent of the population living near the coast. 
B)  around ten times a country with less than 20 percent of the population living near the coast. 
C)  around twenty times a country with less than 20 percent of the population living near the coast. 
D)  around fifty times a country with less than 20 percent of the population living near the coast.

Question 5

A leading environmental group recently published a report contending that humans are running a "resource deficit" because we are using natural resources faster than they can be regenerated. The group claims that this means that economic growth will eventually stop, and will even be reversed. An economist would

Accepted Answer

A)  agree with the report, and would point to rising natural resource prices as evidence. 
B)  agree with the report, but wouldn't think it was important because growth will not slow down for several centuries. 
C)  disagree with the report, in part because it ignores the mitigating effects of technological change. 
D)  disagree with the report because labor and capital are the primary determinants of growth, and since they are plentiful, growth will not slow down. 
A)  agree with the report, and would point to rising natural resource prices as evidence. 
B)  agree with the report, but wouldn't think it was important because growth will not slow down for several centuries. 
C)  disagree with the report, in part because it ignores the mitigating effects of technological change. 
D)  disagree with the report because labor and capital are the primary determinants of growth, and since they are plentiful, growth will not slow down.

Question 6

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 7

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 8

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1993 to 2012.

Accepted Answer

Real GDP per person in 1993 wa

Question 9

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

Question 10

Your company discovers a better way to produce mousetraps, but your better methods are not apparent from the mousetraps themselves. Your knowledge of how to more efficiently produce mousetraps is

Accepted Answer

A)  common technological knowledge. 
B)  common, but not technological, knowledge. 
C)  proprietary technological knowledge. 
D)  proprietary, but not technological, knowledge. 
A)  common technological knowledge. 
B)  common, but not technological, knowledge. 
C)  proprietary technological knowledge. 
D)  proprietary, but not technological, knowledge.

Question 11

The United Kingdom is

Accepted Answer

A)  an advanced economy, and over the past century its rate of economic growth has been higher than that of the United States. 
B)  an advanced economy, and over the past century its rate of economic growth has been lower than that of the United States. 
C)  a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States. 
D)  a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States. 
A)  an advanced economy, and over the past century its rate of economic growth has been higher than that of the United States. 
B)  an advanced economy, and over the past century its rate of economic growth has been lower than that of the United States. 
C)  a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States. 
D)  a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States.

Question 12

In medieval Europe an important technological advance was the use of the padded horse collar for plowing. Once this idea was thought of, other people used it. This illustrates that knowledge is generally a

Accepted Answer

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

Question 13

Consider the nations of Canada, the United Kingdom, and the United States. Since 1870, which of these nations has progressed, in an economic sense, more slowly than the other two nations?

Accepted Answer

The United Kingdom's growth ra

Question 14

If a production function has constant returns to scale, then if all inputs double so does production.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Among the following countries, which one has the highest growth rate of real GDP per person over about the last 100 years?

Accepted Answer

A)  Argentina 
B)  Mexico 
C)  the United Kingdom 
D)  the United States 
A)  Argentina 
B)  Mexico 
C)  the United Kingdom 
D)  the United States

Question 17

Over the period 1900-2010, which of the following countries experienced the highest average annual growth rate of real GDP per person?

Accepted Answer

A)  Brazil 
B)  China 
C)  India 
D)  Pakistan 
A)  Brazil 
B)  China 
C)  India 
D)  Pakistan

Question 18

In the long run, a higher saving rate

Accepted Answer

A)  cannot increase the capital stock. 
B)  means that people must consume less in the future. 
C)  increases the level of productivity. 
D)  None of the above is correct. 
A)  cannot increase the capital stock. 
B)  means that people must consume less in the future. 
C)  increases the level of productivity. 
D)  None of the above is correct.

Question 19

In 2012, the imaginary nation of Dorados had a population of 8,000 and real GDP of 3,000,000. During the year its real GDP grew by about 2.9%. Which of the following sets of growth rates is consistent with this growth in real GDP?

Accepted Answer

A)  2% population growth and 6% real GDP growth 
B)  6% population growth and 2% real GDP growth 
C)  4% population growth and 7% real GDP growth 
D)  7% population growth and 4% real GDP growth 
A)  2% population growth and 6% real GDP growth 
B)  6% population growth and 2% real GDP growth 
C)  4% population growth and 7% real GDP growth 
D)  7% population growth and 4% real GDP growth

Question 20

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

Accepted Answer

A)  The total number of hours worked rose. 
B)  The total number of hours worked stayed the same. 
C)  The total number of hours worked fell. 
D)  Both b and c are correct. 
A)  The total number of hours worked rose. 
B)  The total number of hours worked stayed the same. 
C)  The total number of hours worked fell. 
D)  Both b and c are correct.

Exam 17: Production and Growth

What particularly important role do courts play in a market economy?

Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500.

Other things the same, domestic investment will increase a country's real GDP by more than foreign investment.

Countries with more than 80 percent of their population living within 100 kilometers of a coast will have an average GDP per person that is

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

National defense and knowledge are generally considered to be

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1993 to 2012.

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

Your company discovers a better way to produce mousetraps, but your better methods are not apparent from the mousetraps themselves. Your knowledge of how to more efficiently produce mousetraps is

The United Kingdom is

In medieval Europe an important technological advance was the use of the padded horse collar for plowing. Once this idea was thought of, other people used it. This illustrates that knowledge is generally a

Consider the nations of Canada, the United Kingdom, and the United States. Since 1870, which of these nations has progressed, in an economic sense, more slowly than the other two nations?

If a production function has constant returns to scale, then if all inputs double so does production.

Other things the same, higher population growth

Among the following countries, which one has the highest growth rate of real GDP per person over about the last 100 years?

Over the period 1900-2010, which of the following countries experienced the highest average annual growth rate of real GDP per person?

In the long run, a higher saving rate

In 2012, the imaginary nation of Dorados had a population of 8,000 and real GDP of 3,000,000. During the year its real GDP grew by about 2.9%. Which of the following sets of growth rates is consistent with this growth in real GDP?

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

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 Costs of Production

Firms in Competitive Markets

Monopoly

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

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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