Question 1

The slope of the production function with capital per worker on the horizontal axis and output per worker on the vertical axis

Accepted Answer

A)  is positive and gets steeper as capital per worker rises. 
B)  is positive and gets flatter as capital per worker rises. 
C)  is negative and gets steeper as capital per worker rises. 
D)  is negative and gets flatter as capital per worker rises. 
A)  is positive and gets steeper as capital per worker rises. 
B)  is positive and gets flatter as capital per worker rises. 
C)  is negative and gets steeper as capital per worker rises. 
D)  is negative and gets flatter as capital per worker rises.

Question 2

Which of the following would increase productivity?

Accepted Answer

A)  an increase in the physical capital stock per worker 
B)  an increase in human capital per worker 
C)  an increase in natural resources per worker 
D)  All of the above are correct. 
A)  an increase in the physical capital stock per worker 
B)  an increase in human capital per worker 
C)  an increase in natural resources per worker 
D)  All of the above are correct.

Question 3

Which of the following statements is correct?

Accepted Answer

A)  In the late 1800s, real GDP per person was higher in the United Kingdom than in the United States. 
B)  In 2010, real GDP per person was higher in the United Kingdom than in the United States. 
C)  The average annual growth rate of real GDP was higher in the United Kingdom than in the United States between the late 1800s and 2010. 
D)  All of the above are correct. 
A)  In the late 1800s, real GDP per person was higher in the United Kingdom than in the United States. 
B)  In 2010, real GDP per person was higher in the United Kingdom than in the United States. 
C)  The average annual growth rate of real GDP was higher in the United Kingdom than in the United States between the late 1800s and 2010. 
D)  All of the above are correct.

Question 4

Gramp's Potato Chips produces 2560 bags of potato chips a day. Each employee at Gramp's works 8 hours. If the company's productivity is 20 bags per hour, how many people does Gramp's employ?

Accepted Answer

A)  8 
B)  16 
C)  24 
D)  None of the above is correct. 
A)  8 
B)  16 
C)  24 
D)  None of the above is correct.

Question 5

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in

Accepted Answer

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

Question 6

Suppose a U.S. automaker builds and operates a new factory in Italy. Future production from such an investment will

Accepted Answer

A)  increase Italian GDP more than it increases Italian GNP. 
B)  increase Italian GNP more than it increases Italian GDP. 
C)  have no affect on Italian GNP, but will increase Italian GDP. 
D)  have no affect on either Italian GDP or GNP. 
A)  increase Italian GDP more than it increases Italian GNP. 
B)  increase Italian GNP more than it increases Italian GDP. 
C)  have no affect on Italian GNP, but will increase Italian GDP. 
D)  have no affect on either Italian GDP or GNP.

Question 7

In which of the following countries has economic growth been sufficiently high that income would double every ten years?

Accepted Answer

A)  Singapore 
B)  Nigeria 
C)  India 
D)  Indonesia 
A)  Singapore 
B)  Nigeria 
C)  India 
D)  Indonesia

Question 8

Over the period 1870-2010, the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following items plays a role in determining productivity?

Accepted Answer

A)  physical capital 
B)  natural resources 
C)  technological knowledge 
D)  All of the above are correct. 
A)  physical capital 
B)  natural resources 
C)  technological knowledge 
D)  All of the above are correct.

Question 10

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?

Accepted Answer

A)  housing 
B)  healthcare 
C)  life expectancy 
D)  All of the above. 
A)  housing 
B)  healthcare 
C)  life expectancy 
D)  All of the above.

Question 11

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N).
-Refer to Scenario 25-1. In the production function, which of the following represents technology?

Accepted Answer

A)  A 
B)  K 
C)  H 
D)  N 
A)  A 
B)  K 
C)  H 
D)  N

Question 12

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N).
-Refer to Scenario 25-1. K represents the quantity of

Accepted Answer

A)  human capital only. 
B)  physical capital only. 
C)  human capital and physical capital combined. 
D)  nonrenewable natural resources. 
A)  human capital only. 
B)  physical capital only. 
C)  human capital and physical capital combined. 
D)  nonrenewable natural resources.

Question 13

If companies from foreign countries build and operate factories in China, then China's productivity

Accepted Answer

A)  and the wages of Chinese workers increase. 
B)  increases but the wages of Chinese workers decrease. 
C)  decreases but the wages of Chinese workers increase. 
D)  and the wages of Chinese workers decrease. 
A)  and the wages of Chinese workers increase. 
B)  increases but the wages of Chinese workers decrease. 
C)  decreases but the wages of Chinese workers increase. 
D)  and the wages of Chinese workers decrease.

Question 14

Which of the following is an example of human capital?

Accepted Answer

A)  textbooks 
B)  hand held power tools 
C)  knowing how to repair cars 
D)  All of the above are correct. 
A)  textbooks 
B)  hand held power tools 
C)  knowing how to repair cars 
D)  All of the above are correct.

Question 15

In a market economy, we know that a resource has become scarcer when

Accepted Answer

A)  its price rises relative to other prices. 
B)  it is non-renewable and some of it is used. 
C)  people search for substitutes. 
D)  All of the above are correct. 
A)  its price rises relative to other prices. 
B)  it is non-renewable and some of it is used. 
C)  people search for substitutes. 
D)  All of the above are correct.

Question 16

What term do we use to refer to the understanding of the best ways to produce goods and services?

Accepted Answer

The term i

Question 17

Country A and country B both increase their capital stock by one unit. Output in country A increases by 10 while output in country B increases by 8. Other things the same, diminishing returns implies that country A is

Accepted Answer

A)  richer than Country B. If Country A adds another unit of capital, output will increase by more than 10 units. 
B)  richer than Country B. If Country A adds another unit of capital, output will increase by less than 10 units. 
C)  poorer than Country B. If Country A adds another unit of capital, output will increase by more than 10 units. 
D)  poorer than Country B. If Country A adds another unit of capital, output will increase by less than 10 units. 
A)  richer than Country B. If Country A adds another unit of capital, output will increase by more than 10 units. 
B)  richer than Country B. If Country A adds another unit of capital, output will increase by less than 10 units. 
C)  poorer than Country B. If Country A adds another unit of capital, output will increase by more than 10 units. 
D)  poorer than Country B. If Country A adds another unit of capital, output will increase by less than 10 units.

Question 18

Which of the following are human capital and physical capital, respectively?

Accepted Answer

A)  for an accounting firm: the accountants' knowledge of tax laws and computer software 
B)  for a grocery store: grocery carts and shelving 
C)  for a school: chalkboard and desks 
D)  for a library: the building and the reference librarians' knowledge of the Internet 
A)  for an accounting firm: the accountants' knowledge of tax laws and computer software 
B)  for a grocery store: grocery carts and shelving 
C)  for a school: chalkboard and desks 
D)  for a library: the building and the reference librarians' knowledge of the Internet

Question 19

Educational attainment tends to be

Accepted Answer

A)  low in countries with high population growth. 
B)  low in countries with low population growth. 
C)  high in countries with high population growth. 
D)  None of the above are true. 
A)  low in countries with high population growth. 
B)  low in countries with low population growth. 
C)  high in countries with high population growth. 
D)  None of the above are true.

Question 20

Inventors often obtain patents on new products and processes, thereby turning new ideas into

Accepted Answer

A)  private goods and increasing the incentive to engage in research. 
B)  private goods but decreasing the incentive to engage in research. 
C)  public goods and increasing the incentive to engage in research. 
D)  public goods but decreasing the incentive to engage in research. 
A)  private goods and increasing the incentive to engage in research. 
B)  private goods but decreasing the incentive to engage in research. 
C)  public goods and increasing the incentive to engage in research. 
D)  public goods but decreasing the incentive to engage in research.

Exam 17: Production and Growth

The slope of the production function with capital per worker on the horizontal axis and output per worker on the vertical axis

Which of the following would increase productivity?

Which of the following statements is correct?

Gramp's Potato Chips produces 2560 bags of potato chips a day. Each employee at Gramp's works 8 hours. If the company's productivity is 20 bags per hour, how many people does Gramp's employ?

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in

Suppose a U.S. automaker builds and operates a new factory in Italy. Future production from such an investment will

In which of the following countries has economic growth been sufficiently high that income would double every ten years?

Over the period 1870-2010, the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Which of the following items plays a role in determining productivity?

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N). -Refer to Scenario 25-1. In the production function, which of the following represents technology?

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N). -Refer to Scenario 25-1. K represents the quantity of

If companies from foreign countries build and operate factories in China, then China's productivity

Which of the following is an example of human capital?

In a market economy, we know that a resource has become scarcer when

What term do we use to refer to the understanding of the best ways to produce goods and services?

Country A and country B both increase their capital stock by one unit. Output in country A increases by 10 while output in country B increases by 8. Other things the same, diminishing returns implies that country A is

Which of the following are human capital and physical capital, respectively?

Educational attainment tends to be

Inventors often obtain patents on new products and processes, thereby turning new ideas into

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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