Question 1

The short-run effects of an increase in the saving rate include

Accepted Answer

A)  a higher level of productivity. 
B)  a higher growth rate of productivity. 
C)  a higher growth rate of income. 
D)  All of the above are correct.

Question 2

Allied Business Consultants employs five researchers that each work 8 hour days. In one day the researchers prepared 10 reports for its 2 largest clients. What was Allied Business Consultants' productivity?

Accepted Answer

A)  10 reports 
B)  5 reports per client 
C)  1.25 reports per hour 
D)  1/4 report per hour

Question 3

Petroleum is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 4

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 5

If per capita real income grows by 2 percent per year, then it will double in approximately 20 years.

Accepted Answer

A) True 
 B)False

Question 6

Consider the nations of Brazil, Mexico, and Pakistan. Over the past century, which of these three nations has experienced, by far, slower economic growth than the other two nations?

Accepted Answer

The answer of Consider the nations of Brazil, Mexico, and...

Question 7

Human capital

Accepted Answer

A)  can be thought of, metaphorically, as the quality of society's textbooks, whereas technological knowledge can be thought of as the time that the population has devoted to reading textbooks. 
B)  is more tangible than physical capital. 
C)  is an input in the production of goods and services. 
D)  is the same as the quantity of labor.

Question 8

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 9

You sell cupcakes. One day you double the time you spend and double all your inputs, and make twice as many cupcakes. Your cupcake production function has

Accepted Answer

A)  decreasing returns to scale. 
B)  zero returns to scale. 
C)  constant returns to scale. 
D)  increasing returns to scale.

Question 10

Consider three imaginary countries. In Aziria, saving amounts to $3,000 and consumption amounts to $7,000; in Graniva, saving amounts to $2,000 and consumption amounts to $8,000; and in Tanistan, saving amounts to $4,500 and consumption amounts to $10,500. The saving rate is

Accepted Answer

A)  higher in Aziria than in Tanistan, and it is higher in Tanistan than in Graniva. 
B)  higher in Graniva than in Tanistan, and it is higher in Tanistan than in Aziria. 
C)  higher in Tanistan than in Graniva, and it is the same in Graniva and Aziria. 
D)  higher in Aziria than in Graniva, and it is the same in Aziria and Tanistan.

Question 11

Susan and Calvin paint houses. Susan consistently paints about 400 square feet of a house's exterior per hour, while Calvin consistently paints about 300 square feet per hour. Susan's _______ exceeds that of Calvin.

Accepted Answer

The answer of Susan and Calvin paint houses. Susan consistently...

Question 12

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 13

Other things the same, a country that increases its saving rate increases

Accepted Answer

A)  its future productivity and future real GDP. 
B)  neither its future productivity nor future real GDP. 
C)  its future productivity, but not its future real GDP. 
D)  its future real GDP, but not its future productivity.

Question 14

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

Accepted Answer

A)  The poor country has outward-oriented trade policies. 
B)  The poor country allows foreign direct investment. 
C)  The poor country has poorly developed property rights. 
D)  All of the above are correct.

Question 15

Which of the following is correct?

Accepted Answer

A)  If developing countries limit career and educational opportunities for women, birth rates are likely to be lower. 
B)  Growth rates in developed and developing countries are nearly the same. 
C)  Historically, in periods where the rate of population growth was high, so was the rate of growth in world real GDP per person. 
D)  None of the above is correct.

Question 16

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

Question 17

Which of the following pairs of terms refer to the same thing?

Accepted Answer

A)  "capital" and "physical capital" 
B)  "technological knowledge" and "human capital" 
C)  "standard of living" and "human capital" 
D)  "standard of living" and "productivity"

Question 18

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 19

According to the traditional view of the production function, which of the following values of the additions to output per worker would be consistent with moving from 5 to 6, and then from 6 to 7, and then from 7 to 8 units of capital per worker in that order?

Accepted Answer

A)  40, 40, 40 
B)  40, 35, 38 
C)  40, 34, 32 
D)  40, 43, 48

Question 20

What is the relationship between education and human capital?

Accepted Answer

The answer of What is the relationship between education and...

Exam 17: Production and Growth

The short-run effects of an increase in the saving rate include

Allied Business Consultants employs five researchers that each work 8 hour days. In one day the researchers prepared 10 reports for its 2 largest clients. What was Allied Business Consultants' productivity?

Petroleum is an example of a nonrenewable resource.

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

If per capita real income grows by 2 percent per year, then it will double in approximately 20 years.

Consider the nations of Brazil, Mexico, and Pakistan. Over the past century, which of these three nations has experienced, by far, slower economic growth than the other two nations?

Human capital

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

You sell cupcakes. One day you double the time you spend and double all your inputs, and make twice as many cupcakes. Your cupcake production function has

Consider three imaginary countries. In Aziria, saving amounts to $3,000 and consumption amounts to $7,000; in Graniva, saving amounts to $2,000 and consumption amounts to $8,000; and in Tanistan, saving amounts to $4,500 and consumption amounts to $10,500. The saving rate is

Susan and Calvin paint houses. Susan consistently paints about 400 square feet of a house's exterior per hour, while Calvin consistently paints about 300 square feet per hour. Susan's _______ exceeds that of Calvin.

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

Other things the same, a country that increases its saving rate increases

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

Which of the following is correct?

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?

Which of the following pairs of terms refer to the same thing?

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?

According to the traditional view of the production function, which of the following values of the additions to output per worker would be consistent with moving from 5 to 6, and then from 6 to 7, and then from 7 to 8 units of capital per worker in that order?

What is the relationship between education and human capital?