Question 1

An economy's production function has the constant­returns­to­scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would

Accepted Answer

A)  stay the same. 
B)  increase by exactly 50 percent. 
C)  increase by exactly 100 percent. 
D)  increase, but not necessarily by either 50 percent or 100 percent. 
A)  stay the same. 
B)  increase by exactly 50 percent. 
C)  increase by exactly 100 percent. 
D)  increase, but not necessarily by either 50 percent or 100 percent.

Question 2

In the United States in 2010 real GDP per person was about $47,000, while in some poor countries real GDP per person was less than $5,000.

Accepted Answer

A) True 
 B)False

Question 3

Suppose over the last five years that the price of recycled aluminum increased from $800 a ton to $900 a ton. Over the same time a measure of the overall price level increased from 120 to 138. The real price of recycled aluminum

Accepted Answer

A)  increased, so it became scarcer 
B)  increased, so it became less scarce 
C)  decreased, so it became scarcer 
D)  decreased, so it became less scarce 
A)  increased, so it became scarcer 
B)  increased, so it became less scarce 
C)  decreased, so it became scarcer 
D)  decreased, so it became less scarce

Question 4

For a given year, productivity in a particular country is most closely matched with that country's

Accepted Answer

A)  level of real GDP over that year. 
B)  level of real GDP divided by hours worked over that year. 
C)  growth rate of real GDP divided by hours worked over that year. 
D)  growth rate of real GDP per person over that year. 
A)  level of real GDP over that year. 
B)  level of real GDP divided by hours worked over that year. 
C)  growth rate of real GDP divided by hours worked over that year. 
D)  growth rate of real GDP per person over that year.

Question 5

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 6

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 7

Assuming constant returns to scale, if two countries are otherwise the same, the one that is poorer grows faster.

Accepted Answer

A) True 
 B)False

Question 8

Mary looks over reports on four of her workers. Jack made 30 baskets in 5 hours. Rudy made 32 baskets in 8 hours. Sam made 40 baskets in 12 hours. Walter made 22 baskets in four hours. Who has the greatest productivity?

Accepted Answer

A)  Jack 
B)  Rudy 
C)  Sam 
D)  Walter 
A)  Jack 
B)  Rudy 
C)  Sam 
D)  Walter

Question 9

If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then

Accepted Answer

A)  Austrian GNP increases by more than Austrian GDP, because GDP includes income earned by foreigners working in Austria. 
B)  Austrian GNP increases by more than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. 
C)  Austrian GNP increases by less than Austrian GDP, because GDP includes income earned by foreigners working in Austria. 
D)  Austrian GNP increases by less than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. 
A)  Austrian GNP increases by more than Austrian GDP, because GDP includes income earned by foreigners working in Austria. 
B)  Austrian GNP increases by more than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. 
C)  Austrian GNP increases by less than Austrian GDP, because GDP includes income earned by foreigners working in Austria. 
D)  Austrian GNP increases by less than Austrian GDP, because GDP excludes income earned by foreigners working in Austria.

Question 10

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 11

Which country has had a higher growth rate than the US over about the last 120 years?

Accepted Answer

A)  Argentina 
B)  Germany 
C)  the United Kingdom 
D)  None of the above is correct. 
A)  Argentina 
B)  Germany 
C)  the United Kingdom 
D)  None of the above is correct.

Question 12

Economists differ in their views of the role of the government in promoting economic growth. A controversial idea is that government should

Accepted Answer

A)  lend support to the invisible hand by maintaining property rights and political stability. 
B)  lower barriers and impediments to free trade. 
C)  encourage capital formation. 
D)  target and subsidize specific industries important for technological progress. 
A)  lend support to the invisible hand by maintaining property rights and political stability. 
B)  lower barriers and impediments to free trade. 
C)  encourage capital formation. 
D)  target and subsidize specific industries important for technological progress.

Question 13

Despite its status as one of the richest countries in the world, Japan

Accepted Answer

A)  has a very low level of productivity. 
B)  has few natural resources. 
C)  has very little human capital. 
D)  engages in a relatively small amount of international trade. 
A)  has a very low level of productivity. 
B)  has few natural resources. 
C)  has very little human capital. 
D)  engages in a relatively small amount of international trade.

Question 14

Consider the nations of China, Japan, and the United States. Over the past century, which of these nations has progressed, in an economic sense, more rapidly than the other two nations?

Accepted Answer

Japan's growth rate 2.65 perce

Question 15

Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct?

Accepted Answer

A)  Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. 
B)  Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. 
C)  Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. 
D)  Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has. 
A)  Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. 
B)  Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. 
C)  Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. 
D)  Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has.

Question 16

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 17

Other things the same, another unit of capital will increase output by more in a poor country than in a rich country.

Accepted Answer

A) True 
 B)False

Question 18

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 19

In the production function Y = AFL,K,H,N), Y represents the quantity of output; L represents the quantity of labor; K represents the quantity of physical capital; and N represents the quantity of natural resources. What does H represent?

Accepted Answer

H represen

Question 20

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?

Accepted Answer

A)  the owner's knowledge of how to prepare vegetarian entrees 
B)  the money in the owner's account at the bank from which she borrowed money 
C)  the tables and chairs in the restaurant 
D)  the fresh fruits, vegetables, and grains the restaurant uses to prepare its meals 
A)  the owner's knowledge of how to prepare vegetarian entrees 
B)  the money in the owner's account at the bank from which she borrowed money 
C)  the tables and chairs in the restaurant 
D)  the fresh fruits, vegetables, and grains the restaurant uses to prepare its meals

Exam 12: Production and Growth

An economy's production function has the constant­returns­to­scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would

In the United States in 2010 real GDP per person was about $47,000, while in some poor countries real GDP per person was less than $5,000.

Suppose over the last five years that the price of recycled aluminum increased from $800 a ton to $900 a ton. Over the same time a measure of the overall price level increased from 120 to 138. The real price of recycled aluminum

For a given year, productivity in a particular country is most closely matched with that country's

Industrial machinery is an example of

Average income has been stagnant for many years in

Assuming constant returns to scale, if two countries are otherwise the same, the one that is poorer grows faster.

Mary looks over reports on four of her workers. Jack made 30 baskets in 5 hours. Rudy made 32 baskets in 8 hours. Sam made 40 baskets in 12 hours. Walter made 22 baskets in four hours. Who has the greatest productivity?

If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then

Technological knowledge refers to

Which country has had a higher growth rate than the US over about the last 120 years?

Economists differ in their views of the role of the government in promoting economic growth. A controversial idea is that government should

Despite its status as one of the richest countries in the world, Japan

Consider the nations of China, Japan, and the United States. Over the past century, which of these nations has progressed, in an economic sense, more rapidly than the other two nations?

Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct?

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

Other things the same, another unit of capital will increase output by more in a poor country than in a rich country.

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

In the production function Y = AFL,K,H,N), Y represents the quantity of output; L represents the quantity of labor; K represents the quantity of physical capital; and N represents the quantity of natural resources. What does H represent?

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?

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

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

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

An economy's production function has the constantreturnstoscale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would