Question 1

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 2

In 2010, income per person in the United States was about 14 times that in India.

Accepted Answer

A) True 
 B)False

Question 3

If a good has become more scarce, then we know for sure that

Accepted Answer

A)  the demand for it increased. 
B)  the supply of it decreased. 
C)  either the demand for it increased or the supply of it decreased. 
D)  both the supply of it and the demand for it decreased. 
A)  the demand for it increased. 
B)  the supply of it decreased. 
C)  either the demand for it increased or the supply of it decreased. 
D)  both the supply of it and the demand for it decreased.

Question 4

In 2010, the imaginary nation of Bovina had a population of 5,000 and real GDP of 600,000. In 2011 it had a population of 5,200 and real GDP of 636,480. During 2011 real GDP per person in Bovina 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 5

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

Accepted Answer

A)  both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital. 
B)  both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital. 
C)  both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital. 
D)  both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital. 
A)  both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital. 
B)  both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital. 
C)  both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital. 
D)  both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.

Question 6

Countries that grew the fastest over the last 100 or so years had average growth rates of real income per person of about

Accepted Answer

A)  1.5 percent per year. 
B)  2.0 percent per year. 
C)  2.5 percent per year. 
D)  3.0 percent per year. 
A)  1.5 percent per year. 
B)  2.0 percent per year. 
C)  2.5 percent per year. 
D)  3.0 percent per year.

Question 7

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 8

A management professor discovers a way for corporate management to operate more efficiently. He publishes his findings in a journal. His findings are

Accepted Answer

A)  proprietary and common knowledge. 
B)  common, but not proprietary, knowledge. 
C)  proprietary, but not common, knowledge. 
D)  neither proprietary nor common knowledge. 
A)  proprietary and common knowledge. 
B)  common, but not proprietary, knowledge. 
C)  proprietary, but not common, knowledge. 
D)  neither proprietary nor common knowledge.

Question 9

Which of the following is consistent with the catch-up effect?

Accepted Answer

A)  The United States had a higher growth rate before 1900 than after. 
B)  After World War II the United States had lower growth rates than war-ravaged European countries. 
C)  Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. 
D)  All of the above are correct. 
A)  The United States had a higher growth rate before 1900 than after. 
B)  After World War II the United States had lower growth rates than war-ravaged European countries. 
C)  Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. 
D)  All of the above are correct.

Question 10

Last year the imaginary country of Basova had a population of 10,000, 6,000 people worked 8 hours a day, and produced a real GDP of $30,000,000. The imaginary country of Andovia had a population of 12,000, 8,000 people worked 8 hours a day, and produced a real GDP of $38,000,000. Which of the following is correct?

Accepted Answer

A)  Basova had higher productivity and higher real GDP per person. 
B)  Andovia had the higher productivity and higher real GDP per person. 
C)  Basova had the higher productivity while Andovia had the higher real GDP per person. 
D)  Andovia had the higher productivity while Basova had the higher real GDP per person. 
A)  Basova had higher productivity and higher real GDP per person. 
B)  Andovia had the higher productivity and higher real GDP per person. 
C)  Basova had the higher productivity while Andovia had the higher real GDP per person. 
D)  Andovia had the higher productivity while Basova had the higher real GDP per person.

Question 11

In 2012, the imaginary nation of Kanmiw had a population of 8,044 and real GDP of 36,198,000. In 2013 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Kanmiw between 2012 and 2013?

Accepted Answer

A)  -2.2 percent 
B)  -0.7 percent 
C)  2.2 percent 
D)  4.5 percent 
A)  -2.2 percent 
B)  -0.7 percent 
C)  2.2 percent 
D)  4.5 percent

Question 12

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

Accepted Answer

Inward­oriented policies are i

Question 13

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 14

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

Accepted Answer

A)  corn that is harvested from a field in Iowa 
B)  workers who are hired at a coal mine in West Virginia 
C)  skills that teachers in Texas acquire through continuing-education classes 
D)  All of the above are correct. 
A)  corn that is harvested from a field in Iowa 
B)  workers who are hired at a coal mine in West Virginia 
C)  skills that teachers in Texas acquire through continuing-education classes 
D)  All of the above are correct.

Question 15

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

Accepted Answer

N represen

Question 16

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 17

Which of the following is not correct?

Accepted Answer

A)  Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life. 
B)  With a growth rate of about 2 percent per year, average income per person doubles about every 60 years. 
C)  The ranking of countries by average income changes substantially over time. 
D)  In some countries real income per person has changed very little over many years. 
A)  Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life. 
B)  With a growth rate of about 2 percent per year, average income per person doubles about every 60 years. 
C)  The ranking of countries by average income changes substantially over time. 
D)  In some countries real income per person has changed very little over many years.

Question 18

Brazil gives cash payments to its poor citizens on the condition that those citizens' children stay in school. In terms of the determinants of productivity, how might this public policy contribute to higher productivity in Brazil?

Accepted Answer

This public policy aims to inc

Question 19

Which of the following statements is not correct?

Accepted Answer

A)  The catch-up effect is based on the assumption of diminishing returns to capital. 
B)  Investment in poor countries by citizens of rich countries is one way poor countries can learn new technologies. 
C)  Malthus argued that charity and government aid was an effective way to reduce poverty. 
D)  Peace and justice are keys to growth. 
A)  The catch-up effect is based on the assumption of diminishing returns to capital. 
B)  Investment in poor countries by citizens of rich countries is one way poor countries can learn new technologies. 
C)  Malthus argued that charity and government aid was an effective way to reduce poverty. 
D)  Peace and justice are keys to growth.

Question 20

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was Alpha Cabinet Company's productivity?

Accepted Answer

A)  1/8 cabinet per hour 
B)  8 hours per cabinet 
C)  40 cabinets 
D)  None of the above is correct. 
A)  1/8 cabinet per hour 
B)  8 hours per cabinet 
C)  40 cabinets 
D)  None of the above is correct.

Exam 25: Production and Growth

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

In 2010, income per person in the United States was about 14 times that in India.

If a good has become more scarce, then we know for sure that

In 2010, the imaginary nation of Bovina had a population of 5,000 and real GDP of 600,000. In 2011 it had a population of 5,200 and real GDP of 636,480. During 2011 real GDP per person in Bovina grew by

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

Countries that grew the fastest over the last 100 or so years had average growth rates of real income per person of about

Human capital is the

A management professor discovers a way for corporate management to operate more efficiently. He publishes his findings in a journal. His findings are

Which of the following is consistent with the catch-up effect?

In 2012, the imaginary nation of Kanmiw had a population of 8,044 and real GDP of 36,198,000. In 2013 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Kanmiw between 2012 and 2013?

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

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 an example of a produced factor of production?

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

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.

Which of the following is not correct?

Brazil gives cash payments to its poor citizens on the condition that those citizens' children stay in school. In terms of the determinants of productivity, how might this public policy contribute to higher productivity in Brazil?

Which of the following statements is not correct?

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was Alpha Cabinet Company's productivity?

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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