Question 1

Which of the following is correct?

Accepted Answer

A)  Once adjustment is made for inflation, the prices of most natural resources have been about steady or falling. 
B)  Technological progress has allowed us to substitute renewable resources for some nonrenewable resources. 
C)  Technological progress has made once-crucial natural resources less necessary. 
D)  All of the above are correct. 
A)  Once adjustment is made for inflation, the prices of most natural resources have been about steady or falling. 
B)  Technological progress has allowed us to substitute renewable resources for some nonrenewable resources. 
C)  Technological progress has made once-crucial natural resources less necessary. 
D)  All of the above are correct.

Question 2

Scenario 25-1. An economy's production form takes the form Y = AF(L, 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 3

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.

Question 4

Other things the same, when an economy increases its saving rate

Accepted Answer

A)  consumption and production rise now. 
B)  consumption rises now and production rises later 
C)  consumption falls now and production rises later. 
D)  consumption falls now and production falls later. 
A)  consumption and production rise now. 
B)  consumption rises now and production rises later 
C)  consumption falls now and production rises later. 
D)  consumption falls now and production falls later.

Question 5

On a production function, as capital per worker increases, output per worker

Accepted Answer

A)  increases. This increase is larger at larger values of capital per worker. 
B)  increases. This increase is smaller at larger values of capital per worker. 
C)  decreases. This decrease is larger at larger value of capital per worker. 
D)  decreases. This decrease is smaller at larger value of capital per worker. 
A)  increases. This increase is larger at larger values of capital per worker. 
B)  increases. This increase is smaller at larger values of capital per worker. 
C)  decreases. This decrease is larger at larger value of capital per worker. 
D)  decreases. This decrease is smaller at larger value of capital per worker.

Question 6

Which of the following statements is correct? In 2010,

Accepted Answer

A)  real income per person in the U.S. was about 6 times that in China. 
B)  real income per person in China was more than 2 times that in India. 
C)  the typical resident of India had less real income than the typical resident of England in 1870. 
D)  All of the above are correct. 
A)  real income per person in the U.S. was about 6 times that in China. 
B)  real income per person in China was more than 2 times that in India. 
C)  the typical resident of India had less real income than the typical resident of England in 1870. 
D)  All of the above are correct.

Question 7

Suppose that a new government is elected in Eurnesia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting. These changes will probably

Accepted Answer

A)  raise real GDP per person and productivity in Eurnesia. 
B)  raise real GDP per person but not productivity in Eurnesia. 
C)  raise productivity but not real GDP per person in Eurnesia. 
D)  raise neither productivity nor real GDP per person in Eurnesia. 
A)  raise real GDP per person and productivity in Eurnesia. 
B)  raise real GDP per person but not productivity in Eurnesia. 
C)  raise productivity but not real GDP per person in Eurnesia. 
D)  raise neither productivity nor real GDP per person in Eurnesia.

Question 8

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

Accepted Answer

A)  India 
B)  Mexico 
C)  South Korea 
D)  Zimbabwe 
A)  India 
B)  Mexico 
C)  South Korea 
D)  Zimbabwe

Question 9

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)  technological knowledge. 
C)  a production function. 
D)  an item which always has the property called constant returns to scale. 
A)  a factor of production that in the past was an output from the production process. 
B)  technological knowledge. 
C)  a production function. 
D)  an item which always has the property called constant returns to scale.

Question 10

In the long run, a higher saving rate

Accepted Answer

A)  cannot increase the capital stock. 
B)  increases the growth rate of income. 
C)  increases the growth rate of productivity. 
D)  None of the above is correct. 
A)  cannot increase the capital stock. 
B)  increases the growth rate of income. 
C)  increases the growth rate of productivity. 
D)  None of the above is correct.

Question 11

Suppose an economy experiences an increase in its saving rate. The higher saving rate leads to a higher growth rate of productivity

Accepted Answer

A)  in the short run, but not in the long run. 
B)  in the long run, but not in the short run. 
C)  in both the short run and the long run. 
D)  in neither the short run nor the long run. 
A)  in the short run, but not in the long run. 
B)  in the long run, but not in the short run. 
C)  in both the short run and the long run. 
D)  in neither the short run nor the long run.

Question 12

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 13

Suppose that in some country the price of silver increased from $30 per ounce to $31 per ounce during a time when the overall price level increased by 5 percent. During this period, the real price of silver

Accepted Answer

A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  might have increased, decreased or stayed the same; more information is needed to be sure. 
A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  might have increased, decreased or stayed the same; more information is needed to be sure.

Question 14

Which of the following is generally an opportunity cost of investment in human capital?

Accepted Answer

A)  future job security 
B)  forgone present wages 
C)  increased earning potential 
D)  All of the above are correct. 
A)  future job security 
B)  forgone present wages 
C)  increased earning potential 
D)  All of the above are correct.

Question 15

Which of the following public policies would be least likely to result in more rapid economic growth for a poor or developing country?

Accepted Answer

A)  policies designed to promote economic development in coastal areas 
B)  policies designed to foster strict enforcement of property rights 
C)  policies designed to foster free trade 
D)  inward-oriented policies 
A)  policies designed to promote economic development in coastal areas 
B)  policies designed to foster strict enforcement of property rights 
C)  policies designed to foster free trade 
D)  inward-oriented policies

Question 16

Which of the following is an example of a produced factor of production?

Accepted Answer

A)  a plant in which automobiles are assembled 
B)  skills that people accumulate in high school and college 
C)  skills that people accumulate through experience in the workplace 
D)  All of the above are correct. 
A)  a plant in which automobiles are assembled 
B)  skills that people accumulate in high school and college 
C)  skills that people accumulate through experience in the workplace 
D)  All of the above are correct.

Question 17

In a market economy, scarcity of resources is most clearly reflected in

Accepted Answer

A)  supply. 
B)  demand. 
C)  market prices. 
D)  the stock of the resource. 
A)  supply. 
B)  demand. 
C)  market prices. 
D)  the stock of the resource.

Question 18

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Accepted Answer

A)  8 
B)  10 
C)  80 
D)  120 
A)  8 
B)  10 
C)  80 
D)  120

Question 19

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Accepted Answer

A)  both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. 
B)  both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. 
C)  both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. 
D)  both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia. 
A)  both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. 
B)  both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. 
C)  both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. 
D)  both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.

Question 20

Which of the following statements is true?

Accepted Answer

A)  Productivity is calculated as hours worked divided by output produced. 
B)  Americans have a higher standard of living than Indonesians because American workers are more productive than Indonesian workers. 
C)  Both A and B are correct. 
D)  None of the above are correct. 
A)  Productivity is calculated as hours worked divided by output produced. 
B)  Americans have a higher standard of living than Indonesians because American workers are more productive than Indonesian workers. 
C)  Both A and B are correct. 
D)  None of the above are correct.

Exam 25: Production and Growth

Which of the following is correct?

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

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

Other things the same, when an economy increases its saving rate

On a production function, as capital per worker increases, output per worker

Which of the following statements is correct? In 2010,

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

Industrial machinery is an example of

In the long run, a higher saving rate

Suppose an economy experiences an increase in its saving rate. The higher saving rate leads to a higher growth rate of productivity

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.

Suppose that in some country the price of silver increased from $30 per ounce to $31 per ounce during a time when the overall price level increased by 5 percent. During this period, the real price of silver

Which of the following is generally an opportunity cost of investment in human capital?

Which of the following public policies would be least likely to result in more rapid economic growth for a poor or developing country?

Which of the following is an example of a produced factor of production?

In a market economy, scarcity of resources is most clearly reflected in

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Which of the following statements is true?

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 Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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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