Question 1

On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is not one of these conclusions?

Accepted Answer

A)  A relatively simple way to increase growth rates permanently is to increase a country's saving rate. 
B)  Growth is generally inhibited rather than promoted by policies like protective tariffs. 
C)  Well-established property rights that are enforced by fair and efficient courts are important to economic growth. 
D)  Countries with few domestic natural resources still have opportunities for economic growth. 
A)  A relatively simple way to increase growth rates permanently is to increase a country's saving rate. 
B)  Growth is generally inhibited rather than promoted by policies like protective tariffs. 
C)  Well-established property rights that are enforced by fair and efficient courts are important to economic growth. 
D)  Countries with few domestic natural resources still have opportunities for economic growth.

Question 2

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N).
-Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then if we know the values of A, K/L, H/L, and N/L, we also know the value of

Accepted Answer

A)  output. 
B)  labor productivity. 
C)  A. 
D)  All of the above are correct. 
A)  output. 
B)  labor productivity. 
C)  A. 
D)  All of the above are correct.

Question 3

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Accepted Answer

A)  as the economy moves toward the long run and in the long run. 
B)  as the economy moves toward the long run, but not in the long run. 
C)  in the long run, but not as the economy moves toward the long run. 
D)  neither as the economy moves toward the long run, nor in the long run. 
A)  as the economy moves toward the long run and in the long run. 
B)  as the economy moves toward the long run, but not in the long run. 
C)  in the long run, but not as the economy moves toward the long run. 
D)  neither as the economy moves toward the long run, nor in the long run.

Question 4

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?

Accepted Answer

A)  both output and productivity 
B)  output, but not productivity 
C)  productivity, but not output 
D)  neither productivity nor output 
A)  both output and productivity 
B)  output, but not productivity 
C)  productivity, but not output 
D)  neither productivity nor output

Question 5

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 6

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 7

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period?

Accepted Answer

A)  1.6 percent 
B)  2.5 percent 
C)  3.7 percent 
D)  6 percent 
A)  1.6 percent 
B)  2.5 percent 
C)  3.7 percent 
D)  6 percent

Question 8

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Accepted Answer

A) True 
 B)False

Question 9

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Accepted Answer

A)  all three countries will grow at the same rate. 
B)  Country A will grow the fastest. 
C)  Country B will grow the fastest. 
D)  Country C will grow the fastest. 
A)  all three countries will grow at the same rate. 
B)  Country A will grow the fastest. 
C)  Country B will grow the fastest. 
D)  Country C will grow the fastest.

Question 10

Both the standard of living and the growth of real GDP per person vary widely across countries.

Accepted Answer

A) True 
 B)False

Question 11

If a production function has constant returns to scale, output can be doubled if

Accepted Answer

A)  labor alone doubles. 
B)  all inputs but labor double. 
C)  all of the inputs double. 
D)  None of the above is correct. 
A)  labor alone doubles. 
B)  all inputs but labor double. 
C)  all of the inputs double. 
D)  None of the above is correct.

Question 12

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 13

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

Question 14

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 15

The Economic Development Minister of a country has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries. She asks you to pick the one you think most likely explains her country's low growth. Which of the following contributes to low growth?

Accepted Answer

A)  poorly enforced property rights 
B)  outward-oriented trade policies 
C)  policies that permit foreign investment 
D)  All of the above are correct. 
A)  poorly enforced property rights 
B)  outward-oriented trade policies 
C)  policies that permit foreign investment 
D)  All of the above are correct.

Question 16

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 perc

Question 17

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Accepted Answer

A) True 
 B)False

Question 18

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Accepted Answer

A)  Popeye's production and productivity are greater than Wimpy's. 
B)  Popeye's production is greater than Wimpy's, but his productivity is less. 
C)  Wimpy's production and productivity are greater than Popeye's. 
D)  Wimpy's production is greater than Popeye's, but his productivity is less. 
A)  Popeye's production and productivity are greater than Wimpy's. 
B)  Popeye's production is greater than Wimpy's, but his productivity is less. 
C)  Wimpy's production and productivity are greater than Popeye's. 
D)  Wimpy's production is greater than Popeye's, but his productivity is less.

Question 19

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Accepted Answer

A)  the level of saving per person is 10,000 in country A and 10,000 in country B. 
B)  the level of saving per person is 12,000 in country A and 15,000 in country B. 
C)  Both of the above are correct. 
D)  None of the above are correct. 
A)  the level of saving per person is 10,000 in country A and 10,000 in country B. 
B)  the level of saving per person is 12,000 in country A and 15,000 in country B. 
C)  Both of the above are correct. 
D)  None of the above are correct.

Question 20

Technological knowledge

Accepted Answer

A)  is the same thing as human capital. 
B)  can be discovered but it can never be kept secret. 
C)  is a determinant of productivity. 
D)  does not play a role in the relationship that economists call the production function. 
A)  is the same thing as human capital. 
B)  can be discovered but it can never be kept secret. 
C)  is a determinant of productivity. 
D)  does not play a role in the relationship that economists call the production function.

Exam 25: Production and Growth

On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is not one of these conclusions?

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N). -Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then if we know the values of A, K/L, H/L, and N/L, we also know the value of

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?

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

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

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period?

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Both the standard of living and the growth of real GDP per person vary widely across countries.

If a production function has constant returns to scale, output can be doubled if

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

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

Educational attainment tends to be

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?

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Technological knowledge

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

Filters