Question 1

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

Accepted Answer

A)  lend support to the invisible hand by maintaining property rights and political stability. 
B)  limit foreign investment to industries that don't already exist in the country. 
C)  impose trade restrictions to protect the interests of domestic producers and consumers. 
D)  subsidize key industries. 
A)  lend support to the invisible hand by maintaining property rights and political stability. 
B)  limit foreign investment to industries that don't already exist in the country. 
C)  impose trade restrictions to protect the interests of domestic producers and consumers. 
D)  subsidize key industries.

Question 2

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 3

In some East Asian countries, average income, as measured by real GDP per person, has recently grown at an average annual rate that implies output will double about every

Accepted Answer

A)  10 years. 
B)  15 years. 
C)  20 years. 
D)  25 years. 
A)  10 years. 
B)  15 years. 
C)  20 years. 
D)  25 years.

Question 4

In what sense is it likely that geography has an effect on a country's rate of economic growth?

Accepted Answer

Countries with natural seaport

Question 5

In 2009, the imaginary nation of Mainland had a population of 7,000 and real GDP of 210,000. In 2010 the population was 7,300 and real GDP of 223,380. Over the year in question, real GDP per person in Mainland grew by

Accepted Answer

A)  2 percent, which is high compared to average U.S. growth over the last one-hundred years. 
B)  2 percent, which is about the same as average U.S. growth over the last one-hundred years. 
C)  4 percent, which is high compared to average U.S. growth over the last one-hundred years. 
D)  4 percent, which is about the same as average U.S. growth over the last one-hundred years. 
A)  2 percent, which is high compared to average U.S. growth over the last one-hundred years. 
B)  2 percent, which is about the same as average U.S. growth over the last one-hundred years. 
C)  4 percent, which is high compared to average U.S. growth over the last one-hundred years. 
D)  4 percent, which is about the same as average U.S. growth over the last one-hundred years.

Question 6

Human capital is the

Accepted Answer

A)  knowledge and skills that workers acquire through education, training, and experience. 
B)  stock of equipment and structures that is used to produce goods and services. 
C)  total number of hours worked in an economy. 
D)  same thing as technological knowledge. 
A)  knowledge and skills that workers acquire through education, training, and experience. 
B)  stock of equipment and structures that is used to produce goods and services. 
C)  total number of hours worked in an economy. 
D)  same thing as technological knowledge.

Question 7

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Accepted Answer

A)  human capital. 
B)  physical capital. 
C)  natural resources. 
D)  technological knowledge. 
A)  human capital. 
B)  physical capital. 
C)  natural resources. 
D)  technological knowledge.

Question 8

In 2011, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours per day. In 2012, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per day. Productivity at Modern Electronics

Accepted Answer

A)  decreased by 4% 
B)  remained constant. 
C)  increased by 8.33% 
D)  increased by 27.50% 
A)  decreased by 4% 
B)  remained constant. 
C)  increased by 8.33% 
D)  increased by 27.50%

Question 9

Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and had a productivity of 2.5. Country B had a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. Country

Accepted Answer

A)  A had the higher level of real GDP and real GDP per person. 
B)  A had the higher level of real GDP and Country B had the higher level of real GDP per person 
C)  B had the higher level of real GDP and Country A had the higher level of real GDP per person 
D)  B had the higher level of real GDP and real GDP per person. 
A)  A had the higher level of real GDP and real GDP per person. 
B)  A had the higher level of real GDP and Country B had the higher level of real GDP per person 
C)  B had the higher level of real GDP and Country A had the higher level of real GDP per person 
D)  B had the higher level of real GDP and real GDP per person.

Question 10

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

Accepted Answer

A)  the knowledge possessed by scientists 
B)  carpenters' labor services 
C)  lumber 
D)  All of the above are correct. 
A)  the knowledge possessed by scientists 
B)  carpenters' labor services 
C)  lumber 
D)  All of the above are correct.

Question 11

All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit?

Accepted Answer

A)  Output will rise by more than it did when the previous unit was added. 
B)  Output will rise but by less than it did when the previous unit was added. 
C)  Output will fall by more than it did when the previous unit was added. 
D)  Output will fall but by less then it did when the previous unit was added. 
A)  Output will rise by more than it did when the previous unit was added. 
B)  Output will rise but by less than it did when the previous unit was added. 
C)  Output will fall by more than it did when the previous unit was added. 
D)  Output will fall but by less then it did when the previous unit was added.

Question 12

Nathan owns a bakery that bakes only cakes. All of his bakers work 8 hours per day. In 2011, he employed 5 bakers who produced a total of 200 cakes each day. In 2012, he employed 6 bakers who produced a total of 249 cakes each day. The bakery's productivity

Accepted Answer

A)  decreased by 2.33%. 
B)  increased by 2.33%. 
C)  increased by 3.75%. 
D)  increased by 24.50%. 
A)  decreased by 2.33%. 
B)  increased by 2.33%. 
C)  increased by 3.75%. 
D)  increased by 24.50%.

Question 13

Which of the following is correct?

Accepted Answer

A)  Although levels of real GDP per person vary substantially from country to country, the growth rate of real GDP per person is similar across countries. 
B)  Productivity is not closely linked to government policies. 
C)  The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress. 
D)  Productivity may be measured by the growth rate of real GDP per person. 
A)  Although levels of real GDP per person vary substantially from country to country, the growth rate of real GDP per person is similar across countries. 
B)  Productivity is not closely linked to government policies. 
C)  The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress. 
D)  Productivity may be measured by the growth rate of real GDP per person.

Question 14

The short-run effects of an increase in the saving rate include

Accepted Answer

A)  a higher level of productivity. 
B)  a higher growth rate of productivity. 
C)  a higher growth rate of income. 
D)  All of the above are correct. 
A)  a higher level of productivity. 
B)  a higher growth rate of productivity. 
C)  a higher growth rate of income. 
D)  All of the above are correct.

Question 15

If your firm's production function has constant returns to scale, then if you double all your inputs, your firm's output will

Accepted Answer

A)  double and productivity will rise. 
B)  double but productivity will not change. 
C)  more than double and productivity will rise. 
D)  more then double but productivity will not change. 
A)  double and productivity will rise. 
B)  double but productivity will not change. 
C)  more than double and productivity will rise. 
D)  more then double but productivity will not change.

Question 16

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

Accepted Answer

A)  natural rights 
B)  property rights 
C)  input control 
D)  collective control 
A)  natural rights 
B)  property rights 
C)  input control 
D)  collective control

Question 17

Is physical capital a produced factor of production? Is human capital a produced factor of production?

Accepted Answer

Both physical capita

Question 18

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 19

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 20

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

Accepted Answer

A)  fall to less than one-half of its former value. 
B)  fall, but it would still be greater than one-half of its former value. 
C)  stay the same. 
D)  rise but less than double. 
A)  fall to less than one-half of its former value. 
B)  fall, but it would still be greater than one-half of its former value. 
C)  stay the same. 
D)  rise but less than double.

Exam 12: Production and Growth

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

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.

In some East Asian countries, average income, as measured by real GDP per person, has recently grown at an average annual rate that implies output will double about every

In what sense is it likely that geography has an effect on a country's rate of economic growth?

In 2009, the imaginary nation of Mainland had a population of 7,000 and real GDP of 210,000. In 2010 the population was 7,300 and real GDP of 223,380. Over the year in question, real GDP per person in Mainland grew by

Human capital is the

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

In 2011, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours per day. In 2012, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per day. Productivity at Modern Electronics

Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and had a productivity of 2.5. Country B had a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. Country

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

All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit?

Nathan owns a bakery that bakes only cakes. All of his bakers work 8 hours per day. In 2011, he employed 5 bakers who produced a total of 200 cakes each day. In 2012, he employed 6 bakers who produced a total of 249 cakes each day. The bakery's productivity

Which of the following is correct?

The short-run effects of an increase in the saving rate include

If your firm's production function has constant returns to scale, then if you double all your inputs, your firm's output will

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

Is physical capital a produced factor of production? Is human capital a produced factor of production?

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?

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

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

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

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