Question 1

Which of the following will increase a country's real GDP per person?

Accepted Answer

A)  imposing restrictions on foreign trade and foreign investment 
B)  imposing restrictions on foreign trade and reducing restrictions on foreign investment 
C)  reducing restrictions on foreign trade and imposing restrictions on foreign investment 
D)  reducing restrictions on foreign trade and foreign investment 
A)  imposing restrictions on foreign trade and foreign investment 
B)  imposing restrictions on foreign trade and reducing restrictions on foreign investment 
C)  reducing restrictions on foreign trade and imposing restrictions on foreign investment 
D)  reducing restrictions on foreign trade and foreign investment

Question 2

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over about the last 120 years?

Accepted Answer

A)  Germany and Japan 
B)  Indonesia and Bangladesh 
C)  the United States and Argentina 
D)  Mexico and Pakistan 
A)  Germany and Japan 
B)  Indonesia and Bangladesh 
C)  the United States and Argentina 
D)  Mexico and Pakistan

Question 3

If a newly elected government takes actions that makes its country's courts more efficient and less corrupt, then

Accepted Answer

A)  producers will have greater confidence that they will benefit from their efforts. 
B)  producers are likely to be more specialized. 
C)  buyers and sellers will be more likely to honor contracts. 
D)  All of the above are correct. 
A)  producers will have greater confidence that they will benefit from their efforts. 
B)  producers are likely to be more specialized. 
C)  buyers and sellers will be more likely to honor contracts. 
D)  All of the above are correct.

Question 4

Countries with high population growth rates tend to have lower levels of educational attainment.

Accepted Answer

A) True 
 B)False

Question 5

Daniel owns a coffee kiosk. All of his employees work 8 hours per day. In 2011, he employed 6 people who produced a total of 912 cups of coffee each day. In 2012, he hired a seventh employee and production increased to 1008 cups of coffee each day. In Daniel's kiosk, productivity

Accepted Answer

A)  increased by about 10.5 percent 
B)  increased by 9.5 percent 
C)  decreased by about 5.6 percent 
D)  decreased by about 5.3 percent 
A)  increased by about 10.5 percent 
B)  increased by 9.5 percent 
C)  decreased by about 5.6 percent 
D)  decreased by about 5.3 percent

Question 6

Which of the following statements is correct?

Accepted Answer

A)  In an economy-wide sense, property rights are an important prerequisite for the price system to work. 
B)  Property rights give people the ability to exercise authority over the resources they own. 
C)  Based on the available evidence, the existence of well-established and well-enforced property rights appears to be associated with an enhanced standard of living. 
D)  All of the above are correct. 
A)  In an economy-wide sense, property rights are an important prerequisite for the price system to work. 
B)  Property rights give people the ability to exercise authority over the resources they own. 
C)  Based on the available evidence, the existence of well-established and well-enforced property rights appears to be associated with an enhanced standard of living. 
D)  All of the above are correct.

Question 7

Proprietary technology is technology that is

Accepted Answer

A)  widely used because it is easy to learn. 
B)  widely used because the government subsidizes its use. 
C)  not widely used because people could, but have not, taken the time to learn how to apply it. 
D)  not widely used because it is known or controlled only by the company that discovered it. 
A)  widely used because it is easy to learn. 
B)  widely used because the government subsidizes its use. 
C)  not widely used because people could, but have not, taken the time to learn how to apply it. 
D)  not widely used because it is known or controlled only by the company that discovered it.

Question 8

If over a short time a large number of teenagers become old enough to find employment and a much smaller number of people retire, then productivity

Accepted Answer

A)  and real GDP per person rise. 
B)  rises but real GDP per person falls. 
C)  falls but real GDP per person rises. 
D)  and real GDP per person fall. 
A)  and real GDP per person rise. 
B)  rises but real GDP per person falls. 
C)  falls but real GDP per person rises. 
D)  and real GDP per person fall.

Question 9

Greater scarcity of a natural resource is indicated

Accepted Answer

A)  by an increase in the price of the resource, whether the price increase is less than or greater than the rate of inflation. 
B)  only by an increase in the price of the resource that is less than the rate of inflation. 
C)  only by an increase in the price of the resource that is greater than the rate of inflation. 
D)  only by an increase in the price of the resource that is caused by a decrease in supply and is greater than the rate of inflation. 
A)  by an increase in the price of the resource, whether the price increase is less than or greater than the rate of inflation. 
B)  only by an increase in the price of the resource that is less than the rate of inflation. 
C)  only by an increase in the price of the resource that is greater than the rate of inflation. 
D)  only by an increase in the price of the resource that is caused by a decrease in supply and is greater than the rate of inflation.

Question 10

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

Accepted Answer

No. Japan is an example of a c

Question 11

According to research by Robert Fogel, what proportion of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake?

Accepted Answer

A)  10 percent 
B)  20 percent 
C)  30 percent 
D)  40 percent 
A)  10 percent 
B)  20 percent 
C)  30 percent 
D)  40 percent

Question 12

In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity?

Accepted Answer

A)  1/3 laptop per hour 
B)  3 hours per laptop 
C)  1200 laptops 
D)  400 laptops 
A)  1/3 laptop per hour 
B)  3 hours per laptop 
C)  1200 laptops 
D)  400 laptops

Question 13

The catch-up effect refers to the idea that

Accepted Answer

A)  saving will always catch-up with investment spending. 
B)  it is easier for a country to grow fast and so catch-up if it starts out relatively poor. 
C)  population eventually catches-up with increased output. 
D)  if investment spending is low, increased saving will help investment to "catch-up." 
A)  saving will always catch-up with investment spending. 
B)  it is easier for a country to grow fast and so catch-up if it starts out relatively poor. 
C)  population eventually catches-up with increased output. 
D)  if investment spending is low, increased saving will help investment to "catch-up."

Question 14

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education, training, and experience.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is true?

Accepted Answer

A)  Natural resources per worker influence productivity only when those natural resources are renewable. 
B)  The prices of most natural resources are stable or falling relative to other prices. 
C)  Technology requires greater use of natural resources. 
D)  The terms human capital and technological knowledge are used interchangeably. 
A)  Natural resources per worker influence productivity only when those natural resources are renewable. 
B)  The prices of most natural resources are stable or falling relative to other prices. 
C)  Technology requires greater use of natural resources. 
D)  The terms human capital and technological knowledge are used interchangeably.

Question 16

Inward-oriented policies

Accepted Answer

A)  include imposing tariffs and other trade restrictions. 
B)  have generally increased productivity and growth in the countries that pursued them. 
C)  promote the production of goods and services that the country produces most efficiently. 
D)  All of the above are correct. 
A)  include imposing tariffs and other trade restrictions. 
B)  have generally increased productivity and growth in the countries that pursued them. 
C)  promote the production of goods and services that the country produces most efficiently. 
D)  All of the above are correct.

Question 17

Two countries are the same, except one is poorer. Assuming the traditional assumption about the production function is made there are

Accepted Answer

A)  diminishing returns to capital so the poor country grows slower. 
B)  increasing returns to capital so the poor country grows slower. 
C)  diminishing returns to capital so the poor country grows faster. 
D)  increasing returns to capital so the poor country grows faster. 
A)  diminishing returns to capital so the poor country grows slower. 
B)  increasing returns to capital so the poor country grows slower. 
C)  diminishing returns to capital so the poor country grows faster. 
D)  increasing returns to capital so the poor country grows faster.

Question 18

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

Accepted Answer

A)  foreign portfolio investment. 
B)  indirect domestic investment. 
C)  foreign direct investment. 
D)  foreign indirect investment. 
A)  foreign portfolio investment. 
B)  indirect domestic investment. 
C)  foreign direct investment. 
D)  foreign indirect investment.

Question 19

In the equation for the production function Y/L represents

Accepted Answer

A)  productivity. 
B)  output. 
C)  the availability of natural resources. 
D)  the amount of human capital. 
A)  productivity. 
B)  output. 
C)  the availability of natural resources. 
D)  the amount of human capital.

Question 20

One can argue that the average American today is "richer" than the richest American 100 years ago, given that 100 years ago,

Accepted Answer

A)  people's nominal incomes were, on average, much lower than they are today. 
B)  personal fortunes were not accurately measured. 
C)  many of the goods and services that we now take for granted were not available. 
D)  international trade had not yet begun to flourish. 
A)  people's nominal incomes were, on average, much lower than they are today. 
B)  personal fortunes were not accurately measured. 
C)  many of the goods and services that we now take for granted were not available. 
D)  international trade had not yet begun to flourish.

Exam 17: Production and Growth

Which of the following will increase a country's real GDP per person?

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over about the last 120 years?

If a newly elected government takes actions that makes its country's courts more efficient and less corrupt, then

Countries with high population growth rates tend to have lower levels of educational attainment.

Daniel owns a coffee kiosk. All of his employees work 8 hours per day. In 2011, he employed 6 people who produced a total of 912 cups of coffee each day. In 2012, he hired a seventh employee and production increased to 1008 cups of coffee each day. In Daniel's kiosk, productivity

Which of the following statements is correct?

Proprietary technology is technology that is

If over a short time a large number of teenagers become old enough to find employment and a much smaller number of people retire, then productivity

Greater scarcity of a natural resource is indicated

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

According to research by Robert Fogel, what proportion of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake?

In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity?

The catch-up effect refers to the idea that

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education, training, and experience.

Which of the following statements is true?

Inward-oriented policies

Two countries are the same, except one is poorer. Assuming the traditional assumption about the production function is made there are

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

In the equation for the production function Y/L represents

One can argue that the average American today is "richer" than the richest American 100 years ago, given that 100 years ago,

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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