Question 1

Once an idea enters society's pool of knowledge, the idea becomes a

Accepted Answer

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

Question 2

Over the period 1960-1990,

Accepted Answer

A)  South Korea had a higher growth rate than the United States because it had a higher ratio of investment to GDP. 
B)  the United States had a higher growth rate than South Korea because it had a higher ratio of investment to GDP. 
C)  South Korea had a higher growth rate than the United States even though it had a similar ratio of investment to GDP. 
D)  the United States had a higher growth rate than South Korea even though it had a similar ratio of investment to real GDP. 
A)  South Korea had a higher growth rate than the United States because it had a higher ratio of investment to GDP. 
B)  the United States had a higher growth rate than South Korea because it had a higher ratio of investment to GDP. 
C)  South Korea had a higher growth rate than the United States even though it had a similar ratio of investment to GDP. 
D)  the United States had a higher growth rate than South Korea even though it had a similar ratio of investment to real GDP.

Question 3

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Accepted Answer

A)  the production process cannot be enhanced by technological advances. 
B)  no mathematical representation of the relevant production function can be formulated. 
C)  the relevant production function has the limits-to-growth property. 
D)  the relevant production function has the constant-returns-to-scale property. 
A)  the production process cannot be enhanced by technological advances. 
B)  no mathematical representation of the relevant production function can be formulated. 
C)  the relevant production function has the limits-to-growth property. 
D)  the relevant production function has the constant-returns-to-scale property.

Question 4

Greg's Ice Cream produces 1120 gallons of ice cream per day. Each employed works seven hours and has productivity of 20 gallons an hour. How many employees does Greg's employ?

Accepted Answer

A)  160 
B)  56 
C)  8 
D)  None of the above is correct. 
A)  160 
B)  56 
C)  8 
D)  None of the above is correct.

Question 5

Historically, the market prices of most natural resources adjusted for inflation) have

Accepted Answer

A)  increased. 
B)  remained stable. 
C)  remained stable or decreased. 
D)  decreased. 
A)  increased. 
B)  remained stable. 
C)  remained stable or decreased. 
D)  decreased.

Question 6

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Accepted Answer

A)  all three countries will grow at the same rate. 
B)  Country A will grow the fastest. 
C)  Country B will grow the fastest. 
D)  Country C will grow the fastest. 
A)  all three countries will grow at the same rate. 
B)  Country A will grow the fastest. 
C)  Country B will grow the fastest. 
D)  Country C will grow the fastest.

Question 7

Figure 25-1  
-Refer to Figure 21-1. In order for the figure to make sense, do we have to assume that capital is the only determinant of output? Briefly explain.

Accepted Answer

No, we do not have to assume that capita

Question 8

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N).
-Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then it is possible that the specific form of the production function is

Accepted Answer

A)  Y = 4L + 2K + 3H + N 
B)  Y = L + K + H + N)/4 
C)  Y =2 
D)  Y = 4 
A)  Y = 4L + 2K + 3H + N 
B)  Y = L + K + H + N)/4 
C)  Y =2 
D)  Y = 4

Question 9

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has more capital per worker and so it has more real GDP per worker than the other. Finally, suppose that the saving rate in both countries increases from 4 percent to 7 percent. Over the next ten years we would expect that

Accepted Answer

A)  the growth rate will not change in either country. 
B)  the country that started with less capital per worker will grow faster. 
C)  the country that started with more capital per worker will grow faster. 
D)  both countries will grow and at the same higher rate. 
A)  the growth rate will not change in either country. 
B)  the country that started with less capital per worker will grow faster. 
C)  the country that started with more capital per worker will grow faster. 
D)  both countries will grow and at the same higher rate.

Question 10

An increase in a country's saving rate permanently raises its productivity.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an example of a renewable natural resource?

Accepted Answer

A)  fish 
B)  soybeans 
C)  wood 
D)  All of the above are correct. 
A)  fish 
B)  soybeans 
C)  wood 
D)  All of the above are correct.

Question 12

Over the period 1900­2010, Brazil's rate of economic growth exceeded that of China.

Accepted Answer

A) True 
 B)False

Question 13

In the long run, an increase in the saving rate

Accepted Answer

A)  doesn't change the level of productivity or income. 
B)  raises the levels of both productivity and income. 
C)  raises the level of productivity but not the level of income. 
D)  raises the level of income but not the level of productivity. 
A)  doesn't change the level of productivity or income. 
B)  raises the levels of both productivity and income. 
C)  raises the level of productivity but not the level of income. 
D)  raises the level of income but not the level of productivity.

Question 14

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists include these skills as part of Perry's

Accepted Answer

A)  proprietary knowledge. 
B)  technological knowledge. 
C)  human capital. 
D)  physical capital. 
A)  proprietary knowledge. 
B)  technological knowledge. 
C)  human capital. 
D)  physical capital.

Question 15

Industrial machinery is an example of

Accepted Answer

A)  a factor of production that in the past was an output from the production process. 
B)  physical capital. 
C)  something that influences productivity. 
D)  All of the above are correct. 
A)  a factor of production that in the past was an output from the production process. 
B)  physical capital. 
C)  something that influences productivity. 
D)  All of the above are correct.

Question 16

Malthus predicted that the power of population

Accepted Answer

A)  was greater than the power of the earth to produce subsistence. His forecast was on the mark. 
B)  was greater than the power of the earth to produce subsistence. His forecast was off the mark. 
C)  was less than the power of the earth to produce subsistence. His forecast was on the mark. 
D)  was less than the power of the earth to produce subsistence. His forecast was off the mark. 
A)  was greater than the power of the earth to produce subsistence. His forecast was on the mark. 
B)  was greater than the power of the earth to produce subsistence. His forecast was off the mark. 
C)  was less than the power of the earth to produce subsistence. His forecast was on the mark. 
D)  was less than the power of the earth to produce subsistence. His forecast was off the mark.

Question 17

You bake cookies. One day you double the time you spend, double the number of chocolate chips, flour, eggs, and all your other inputs, and bake twice as many cookies. Your cookie production function has

Accepted Answer

A)  decreasing returns to scale. 
B)  zero returns to scale. 
C)  constant returns to scale. 
D)  increasing returns to scale. 
A)  decreasing returns to scale. 
B)  zero returns to scale. 
C)  constant returns to scale. 
D)  increasing returns to scale.

Question 18

Janet is a farmer. Which of the following are included in her human capital?

Accepted Answer

A)  her tractor and what she's learned from experience 
B)  her tractor but not what she's learned from experience 
C)  what she's learned from experience but not her tractor 
D)  neither her tractor nor what she's learned from experience 
A)  her tractor and what she's learned from experience 
B)  her tractor but not what she's learned from experience 
C)  what she's learned from experience but not her tractor 
D)  neither her tractor nor what she's learned from experience

Question 19

A certain production process requires only two types of inputs - capital and labor. In 2006, 100 units of labor and 50 units of capital were employed, and 100 units of output were produced. In 2013, 112 units of labor and 56 units of capital were employed. If the production process displays constant returns to scale, then how many units of output were produced in 2013?

Accepted Answer

A)  100 
B)  112 
C)  124 
D)  144 
A)  100 
B)  112 
C)  124 
D)  144

Question 20

Other things the same, an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Accepted Answer

A) True 
 B)False

Exam 17: Production and Growth

Once an idea enters society's pool of knowledge, the idea becomes a

Over the period 1960-1990,

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Greg's Ice Cream produces 1120 gallons of ice cream per day. Each employed works seven hours and has productivity of 20 gallons an hour. How many employees does Greg's employ?

Historically, the market prices of most natural resources adjusted for inflation) have

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Figure 25-1 -Refer to Figure 21-1. In order for the figure to make sense, do we have to assume that capital is the only determinant of output? Briefly explain.

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N). -Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then it is possible that the specific form of the production function is

An increase in a country's saving rate permanently raises its productivity.

Which of the following is an example of a renewable natural resource?

Over the period 1900­2010, Brazil's rate of economic growth exceeded that of China.

In the long run, an increase in the saving rate

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists include these skills as part of Perry's

Industrial machinery is an example of

Malthus predicted that the power of population

You bake cookies. One day you double the time you spend, double the number of chocolate chips, flour, eggs, and all your other inputs, and bake twice as many cookies. Your cookie production function has

Janet is a farmer. Which of the following are included in her human capital?

Other things the same, an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

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

Over the period 19002010, Brazil's rate of economic growth exceeded that of China.