Question 1

As of 2010, using real GDP per person as a measure, we would classify

Accepted Answer

A)  the United States and Mexico as advanced economies and Bangladesh as a middle-income country. 
B)  Canada as an advanced economy, Mexico as a middle-income country, and Pakistan as a poor country. 
C)  Japan and India as advanced economies and Mexico as a poor country. 
D)  Japan as an advanced economy, the United Kingdom as a middle-income country, and Argentina as a poor country.

Question 2

All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more?

Accepted Answer

A)  Productivity will definitely fall. 
B)  Productivity will definitely be unchanged. 
C)  Productivity will definitely rise. 
D)  None of the above are necessarily correct.

Question 3

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.

Question 4

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists
Include these skills as part of Perry's

Accepted Answer

A)  proprietary knowledge. 
B)  technological knowledge. 
C)  human capital. 
D)  physical capital.

Question 5

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

Accepted Answer

A)  These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. 
B)  These are outward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia. 
C)  These are inward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. 
D)  These are inward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.

Question 6

In which of the following countries did real GDP per person fall by about 38% from 1991 to 2011?

Accepted Answer

A)  India 
B)  Singapore 
C)  Zimbabwe 
D)  None of the above are correct.

Question 7

How do outward-oriented policies affect a nation's productivity?

Accepted Answer

The answer of How do outward-oriented policies affect a nation's...

Question 8

Which of the following lists contains, in this order, natural resources, physical capital, and human capital?

Accepted Answer

A)  For a shoe factory: leather, hand tools, the managers' knowledge of shoe making. 
B)  For a steel mill: the blast furnaces, iron ore, the workers. 
C)  For an airline: oil used to make jet fuel, the pilots' knowledge of flying, jets. 
D)  None of the above is correct.

Question 9

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.

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.

Question 11

An increase in capital will increase real GDP per person

Accepted Answer

A)  more in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. 
B)  more in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment. 
C)  less in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. 
D)  less in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment.

Question 12

The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called

Accepted Answer

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

Question 13

Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth?

Accepted Answer

A)  A country with no or few domestic natural resources is destined to be poor. 
B)  Differences in natural resources have virtually no role in explaining differences in standards of living. 
C)  Some countries can be rich mostly because of their natural resources and countries without natural resources need not be poor, but can never have very high standards of living. 
D)  Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living.

Question 14

Suppose a person receives an education in her home country. Which of the following will tend to make the increase
In GDP of the person's home country larger than the increase in this person's income?

Accepted Answer

A)  externalities and brain drain 
B)  externalities but not brain drain 
C)  brain drain but not externalities 
D)  neither externalities nor brain drain

Question 15

Suppose a country reduces restrictions on how many hours people can work. If reducing these restrictions increase the total number of hours worked in the economy, but all other factors that determine output are held fixed, then

Accepted Answer

A)  productivity and output both rise. 
B)  productivity rises and output falls. 
C)  productivity falls and output rises. 
D)  productivity and output fall.

Question 16

Productivity is defined as the quantity of

Accepted Answer

A)  labor required to produce a nation's GDP. 
B)  labor required to produce one unit of goods and services. 
C)  goods and services produced from each unit of labor input. 
D)  goods and services produced per unit of time.

Question 17

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

A)  2 percent. 
B)  5 percent. 
C)  10 percent. 
D)  15 percent.

Question 18

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 19

Adam and Doug both build birdhouses. Adam works 30 hours a week and produces 15 bird houses. Doug works 20 hours a week and produces 12 bird houses. Which of the following is correct?

Accepted Answer

A)  Adam's production and productivity are higher than Doug's. 
B)  Adam's production is higher than Doug's, but Doug's productivity is higher than Adam's. 
C)  Doug's production is higher than Adam's, but Adam's productivity is higher than Doug's. 
D)  Doug's production and productivity are higher than Adam's.

Question 20

In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity?

Accepted Answer

A)  4000 pounds of laundry 
B)  500 pounds of laundry per hour 
C)  100 pounds of laundry per hour 
D)  None of the above is correct.

Exam 7: Production and Growth