Question 1

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 2

Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods.

Accepted Answer

A)  Country A has higher productivity and higher real GDP per person than country B. 
B)  Country A has lower productivity and lower real GDP per person than country B. 
C)  Country A has higher productivity, but lower real GDP per person than country B. 
D)  Country B has lower productivity, but higher real GDP per person than country B. 
A)  Country A has higher productivity and higher real GDP per person than country B. 
B)  Country A has lower productivity and lower real GDP per person than country B. 
C)  Country A has higher productivity, but lower real GDP per person than country B. 
D)  Country B has lower productivity, but higher real GDP per person than country B.

Question 3

In 2010, income per person in the United States was about 14 times that in India.

Accepted Answer

A) True 
 B)False

Question 4

Technological knowledge refers to

Accepted Answer

A)  human capital. 
B)  available information on how to produce things. 
C)  resources expended transmitting society's understanding to the labor force. 
D)  All of the above are technological knowledge. 
A)  human capital. 
B)  available information on how to produce things. 
C)  resources expended transmitting society's understanding to the labor force. 
D)  All of the above are technological knowledge.

Question 5

What is the distinction between foreign direct investment and foreign portfolio investment?

Accepted Answer

A capital investment that is owned and o

Question 6

Productivity

Accepted Answer

A)  is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries. 
B)  explains very little of the differences in the standard of living across countries. 
C)  explains some, but not most of the differences in the standard of living across countries. 
D)  explains most of the differences in the standard of living across countries. 
A)  is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries. 
B)  explains very little of the differences in the standard of living across countries. 
C)  explains some, but not most of the differences in the standard of living across countries. 
D)  explains most of the differences in the standard of living across countries.

Question 7

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

A)  education 
B)  research and development 
C)  nutrition 
D)  trade restrictions 
A)  education 
B)  research and development 
C)  nutrition 
D)  trade restrictions

Question 8

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

A)  both the demand for the resource and the supply of the resource have increased 
B)  both the demand for the resource and the supply of the resource have decreased 
C)  demand for the resource is unchanged and the supply of the resource has increased 
D)  the demand for the resource has decreased and the supply of the resource is unchanged 
A)  both the demand for the resource and the supply of the resource have increased 
B)  both the demand for the resource and the supply of the resource have decreased 
C)  demand for the resource is unchanged and the supply of the resource has increased 
D)  the demand for the resource has decreased and the supply of the resource is unchanged

Question 9

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 3,000 work 7 hours a day to produce a total of 105,000 final goods.

Accepted Answer

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

Question 10

If your firm's production function has constant returns to scale and you increase all your inputs by 60%, then your firm's output will

Accepted Answer

A)  not change. 
B)  increase, but by less than 60% 
C)  increase by 60% 
D)  increase by more than 60%. 
A)  not change. 
B)  increase, but by less than 60% 
C)  increase by 60% 
D)  increase by more than 60%.

Question 11

Average income has been stagnant for many years in

Accepted Answer

A)  Western European counties. 
B)  some Asian countries like South Korea and Singapore. 
C)  some Sub-Saharan African countries. 
D)  All of the above are correct. 
A)  Western European counties. 
B)  some Asian countries like South Korea and Singapore. 
C)  some Sub-Saharan African countries. 
D)  All of the above are correct.

Question 12

Which of the following can explain faster growth of real GDP in country A than in Country B?

Accepted Answer

A)  both greater population growth and greater productivity growth in Country A 
B)  greater population growth in Country A, but not greater productivity growth in Country A 
C)  greater productivity growth in Country A, but not greater population growth in Country A 
D)  neither greater population growth nor greater productivity growth in Country A 
A)  both greater population growth and greater productivity growth in Country A 
B)  greater population growth in Country A, but not greater productivity growth in Country A 
C)  greater productivity growth in Country A, but not greater population growth in Country A 
D)  neither greater population growth nor greater productivity growth in Country A

Question 13

Which of the following is a part of your economics professor's human capital?

Accepted Answer

A)  the things she learned at some prestigious university 
B)  her copy of Mankiw's text 
C)  her chalk holder 
D)  All of the above are correct. 
A)  the things she learned at some prestigious university 
B)  her copy of Mankiw's text 
C)  her chalk holder 
D)  All of the above are correct.

Question 14

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment, poor countries tend to grow at a faster rate than rich countries.

Accepted Answer

A) True 
 B)False

Question 15

In a market economy, the real, or inflation-adjusted, price of a resource measures its

Accepted Answer

A)  contribution to revenue. 
B)  relative scarcity. 
C)  productivity. 
D)  contribution to efficiency. 
A)  contribution to revenue. 
B)  relative scarcity. 
C)  productivity. 
D)  contribution to efficiency.

Question 16

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

Accepted Answer

A)  These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. 
B)  These are outward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia. 
C)  These are inward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. 
D)  These are inward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia. 
A)  These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. 
B)  These are outward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia. 
C)  These are inward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. 
D)  These are inward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.

Question 17

What is a production function? Write an equation for a typical production function, and explain what each of the terms represents.

Accepted Answer

A production function is a mathematical

Question 18

John and Miguel are fishermen. When they go fishing, John consistently catches 2 or 3 fish per hour, while Miguel consistently catches 5 or 6 fish per hour. Miguel's _______ exceeds that of John.

Accepted Answer

The answer of John and Miguel are fishermen. When they...

Question 19

If there are constant returns to scale, the production function can be written as

Accepted Answer

A)  xY = 2xAFL, K, H, N). 
B)  Y/L = A FxL, xK, xH, xN). 
C)  Y/L = A F 1, K/L, H/L, N/L). 
D)  L = AFY, K, H, N). 
A)  xY = 2xAFL, K, H, N). 
B)  Y/L = A FxL, xK, xH, xN). 
C)  Y/L = A F 1, K/L, H/L, N/L). 
D)  L = AFY, K, H, N).

Question 20

If a good has become more scarce, then we know for sure that

Accepted Answer

A)  the demand for it increased. 
B)  the supply of it decreased. 
C)  either the demand for it increased or the supply of it decreased. 
D)  both the supply of it and the demand for it decreased. 
A)  the demand for it increased. 
B)  the supply of it decreased. 
C)  either the demand for it increased or the supply of it decreased. 
D)  both the supply of it and the demand for it decreased.

Exam 17: Production and Growth

In the long run, a higher saving rate

Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods.

In 2010, income per person in the United States was about 14 times that in India.

Technological knowledge refers to

What is the distinction between foreign direct investment and foreign portfolio investment?

Productivity

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

In which of the following cases can we be certain that a natural resource has become scarcer?

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 3,000 work 7 hours a day to produce a total of 105,000 final goods.

If your firm's production function has constant returns to scale and you increase all your inputs by 60%, then your firm's output will

Average income has been stagnant for many years in

Which of the following can explain faster growth of real GDP in country A than in Country B?

Which of the following is a part of your economics professor's human capital?

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment, poor countries tend to grow at a faster rate than rich countries.

In a market economy, the real, or inflation-adjusted, price of a resource measures its

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

What is a production function? Write an equation for a typical production function, and explain what each of the terms represents.

John and Miguel are fishermen. When they go fishing, John consistently catches 2 or 3 fish per hour, while Miguel consistently catches 5 or 6 fish per hour. Miguel's _______ exceeds that of John.

If there are constant returns to scale, the production function can be written as

If a good has become more scarce, then we know for sure that

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

Filters