Question 1

A certain production process requires only two types of inputs - capital and labor. In 2006, 100 units of labor and 50 units of capital were employed, and 100 units of output were produced. In 2013, 112 units of labor and 56 units of capital were employed. If the production process displays constant returns to scale, then how many units of output were produced in 2013?

Accepted Answer

A)  100 
B)  112 
C)  124 
D)  144

Question 2

Other things the same, which of the following could explain an increase in productivity?

Accepted Answer

A)  either an increase in human capital or an increase in physical capital 
B)  an increase in human capital but not an increase in physical capital 
C)  an increase in physical capital but not an increase in human capital 
D)  neither an increase in human capital nor an increase in physical capital

Question 3

Consider the nations of Canada, the United Kingdom, and the United States. Since 1870, which of these nations has progressed, in an economic sense, more slowly than the other two nations?

Accepted Answer

The answer of Consider the nations of Canada, the United...

Question 4

In 2012, the imaginary nation of Platland had a population of 10,000 and real GDP of 42,000,000. During the year its real GDP per person grew by about 1.94%. Which of the following sets of growth rates is consistent with this growth in real GDP per person?

Accepted Answer

A)  3% population growth and 4% real GDP growth 
B)  3% population growth and 5% real GDP growth 
C)  6% population growth and 4% real GDP growth 
D)  6% population growth and 5% real GDP growth

Question 5

Of the following countries, which grew most slowly, in terms of real GDP per person, over about the last 120 years?

Accepted Answer

A)  Brazil 
B)  Mexico 
C)  China 
D)  United States

Question 6

In some countries in Sub-Saharan Africa real GDP per person has been stagnant for many years.

Accepted Answer

A) True 
 B)False

Question 7

Inward-oriented policies

Accepted Answer

A)  include imposing tariffs and other trade restrictions. 
B)  have generally increased productivity and growth in the countries that pursued them. 
C)  promote the production of goods and services that the country produces most efficiently. 
D)  All of the above are correct.

Question 8

Investment from abroad

Accepted Answer

A)  is a way for poor countries to learn the state-of-the-art technologies developed and used in richer countries. 
B)  is viewed by economists as a way to increase growth. 
C)  often requires removing restrictions that governments have imposed on foreign ownership of domestic capital. 
D)  All of the above are correct.

Question 9

Despite its status as one of the richest countries in the world, Japan

Accepted Answer

A)  has a very low level of productivity. 
B)  has few natural resources. 
C)  has very little human capital. 
D)  engages in a relatively small amount of international trade.

Question 10

Which country has had a higher growth rate than the U.S. over about the last 120 years?

Accepted Answer

A)  India 
B)  Mexico 
C)  United Kingdom 
D)  Pakistan

Question 11

Hit-It produces 320 baseball bats per day using 2 workers who each work 8 hours per day. What is Hit­It's productivity?

Accepted Answer

A)  320 baseball bats 
B)  160 baseball bats per hour 
C)  20 baseball bats per hour 
D)  None of the above is correct.

Question 12

Figure 25-1 
-Refer to Figure 21-1. "When the amount of capital per worker increases by one unit, a poor country experiences a greater benefit than does a rich country." Does the figure illustrate this notion? Briefly explain.

Accepted Answer

The answer of Figure 25-1 
-Refer to Figure 21-1. "When...

Question 13

When a country eliminates tariffs and other trade restrictions, intending to promote economic growth, it is pursuing_______-oriented policies.

Accepted Answer

The answer of When a country eliminates tariffs and other...

Question 14

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

The answer of Does a country have to be blessed...

Question 15

An increase in a country's population may contribute to the rate of technological progress because a larger population

Accepted Answer

A)  forces the capital stock to be spread more thinly. 
B)  forces natural resources to be spread more thinly. 
C)  brings with it more scientists, inventors, and engineers. 
D)  brings with it more favorable recognition from other countries.

Question 16

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Accepted Answer

A) True 
 B)False

Question 17

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.

Question 18

Suppose over the last five years that the price of recycled aluminum increased from $800 a ton to $900 a ton. Over the same time a measure of the overall price level increased from 120 to 138. The real price of recycled aluminum

Accepted Answer

A)  increased, so it became scarcer 
B)  increased, so it became less scarce 
C)  decreased, so it became scarcer 
D)  decreased, so it became less scarce

Question 19

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

Accepted Answer

A)  productivity is greater than Will's. 
B)  output is greater than Will's. 
C)  standard of living is higher than Will's. 
D)  All of the above are correct.

Question 20

Which of the following is an example of physical capital?

Accepted Answer

A)  the available knowledge on how to make semiconductors 
B)  a taxi­cab driver's knowledge of the fastest routes to take 
C)  bulldozers, backhoes and other construction equipment 
D)  All of the above are correct.

Exam 7: Production and Growth

Other things the same, which of the following could explain an increase in productivity?

Consider the nations of Canada, the United Kingdom, and the United States. Since 1870, which of these nations has progressed, in an economic sense, more slowly than the other two nations?

In 2012, the imaginary nation of Platland had a population of 10,000 and real GDP of 42,000,000. During the year its real GDP per person grew by about 1.94%. Which of the following sets of growth rates is consistent with this growth in real GDP per person?

Of the following countries, which grew most slowly, in terms of real GDP per person, over about the last 120 years?

In some countries in Sub-Saharan Africa real GDP per person has been stagnant for many years.

Inward-oriented policies

Investment from abroad

Despite its status as one of the richest countries in the world, Japan

Which country has had a higher growth rate than the U.S. over about the last 120 years?

Hit-It produces 320 baseball bats per day using 2 workers who each work 8 hours per day. What is HitIt's productivity?

Figure 25-1 -Refer to Figure 21-1. "When the amount of capital per worker increases by one unit, a poor country experiences a greater benefit than does a rich country." Does the figure illustrate this notion? Briefly explain.

When a country eliminates tariffs and other trade restrictions, intending to promote economic growth, it is pursuing_______-oriented policies.

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

An increase in a country's population may contribute to the rate of technological progress because a larger population

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Which of the following is correct?

Suppose over the last five years that the price of recycled aluminum increased from $800 a ton to $900 a ton. Over the same time a measure of the overall price level increased from 120 to 138. The real price of recycled aluminum

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

Which of the following is an example of physical capital?

Exam 7: Production and Growth

Other things the same, which of the following could explain an increase in productivity?

Consider the nations of Canada, the United Kingdom, and the United States. Since 1870, which of these nations has progressed, in an economic sense, more slowly than the other two nations?

In 2012, the imaginary nation of Platland had a population of 10,000 and real GDP of 42,000,000. During the year its real GDP per person grew by about 1.94%. Which of the following sets of growth rates is consistent with this growth in real GDP per person?

Of the following countries, which grew most slowly, in terms of real GDP per person, over about the last 120 years?

In some countries in Sub-Saharan Africa real GDP per person has been stagnant for many years.

Inward-oriented policies

Investment from abroad

Despite its status as one of the richest countries in the world, Japan

Which country has had a higher growth rate than the U.S. over about the last 120 years?

Hit-It produces 320 baseball bats per day using 2 workers who each work 8 hours per day. What is Hit­It's productivity?

Figure 25-1 -Refer to Figure 21-1. "When the amount of capital per worker increases by one unit, a poor country experiences a greater benefit than does a rich country." Does the figure illustrate this notion? Briefly explain.

When a country eliminates tariffs and other trade restrictions, intending to promote economic growth, it is pursuing_______-oriented policies.

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

An increase in a country's population may contribute to the rate of technological progress because a larger population

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Which of the following is correct?

Suppose over the last five years that the price of recycled aluminum increased from $800 a ton to $900 a ton. Over the same time a measure of the overall price level increased from 120 to 138. The real price of recycled aluminum

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

Which of the following is an example of physical capital?

Hit-It produces 320 baseball bats per day using 2 workers who each work 8 hours per day. What is HitIt's productivity?