Question 1

Inventors often obtain patents on new products and processes, thereby turning new ideas into

Accepted Answer

A)   private goods and increasing the incentive to engage in research.
B)   private goods but decreasing the incentive to engage in research.
C)   public goods and increasing the incentive to engage in research.
D)   public goods but decreasing the incentive to engage in research.E) None of the above
F) A) and B)

Question 2

In the equation for the production function Y/L represents

Accepted Answer

A)   productivity.
B)   output.
C)   the availability of natural resources.
D)   the amount of human capital.E) A) and C)
F) A) and D)

Question 3

A rapid increase in the number of workers, other things the same, is likely in the short term to

Accepted Answer

A)   raise real GDP per person, but decrease real GDP.
B)   decrease both real GDP and real GDP per person.
C)   raise both real GDP and real GDP per person.
D)   raise real GDP, but decrease real GDP per person.E) A) and D)
F) A) and C)

Question 4

Which of the following is not correct?

Accepted Answer

A)   Countries that have had higher output growth per person have typically done so without higher productivity growth.
B)   A country's standard of living and its productivity are closely related.
C)   Productivity refers to output produced per hour of work.
D)   Increases in productivity can be used to increase output or leisure.E) A) and D)
F) A) and C)

Question 5

Which of the following is considered human capital?

Accepted Answer

A)   the comfortable chair in your dorm room where you read economics texts
B)   the amount you get paid each week to work at the library
C)   the things you have learned this semester
D)   any capital goods that require a human to be present to operateE) A) and D)
F) None of the above

Question 6

In some East Asian countries, average income, as measured by real GDP per person, has recently grown at an average annual rate that implies output will double about every

Accepted Answer

A)   10 years.
B)   15 years.
C)   20 years.
D)   25 years.E) C) and D)
F) B) and D)

Question 7

Average income has been stagnant for many years in

Accepted Answer

A)   Chad.
B)   Gabon.
C)   Senegal.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 8

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Accepted Answer

A) True 
 B)False

Question 9

Suppose that real GDP grew more in Country A than in Country B last year.

Accepted Answer

A)   Country A must have a higher standard of living than country B.
B)   Country A's productivity must have grown faster than country B's.
C)   Both of the above are correct.
D)   None of the above are correct.E) A) and D)
F) B) and C)

Question 10

Which of the following statements is correct?

Accepted Answer

A)   By definition, all natural resources are nonrenewable.
B)   Market prices give us reason to believe that natural resources are a limit to economic growth.
C)   An economy must be blessed with ample quantities of natural resources if it is to be a highly productive economy.
D)   Differences in natural resources can explain some of the differences in standards of living around the world.E) All of the above
F) None of the above

Question 11

Scenario 7-1. An economy's production form takes the form Y = AF(L, K, H, N) .
-Refer to Scenario 7-1. If the production function has the constant-returns-to-scale property, then it could be rewritten as

Accepted Answer

A)   Y/L = AF(1, K/L, H/L, N/L) 
B)   Y/L = AF(L, 1, H/L, N/L) 
C)   Y/L = AF(L, K/L, 1, N/L) 
D)   Y/L = AF(L, K/L, H/L, 1) E) A) and D)
F) B) and C)

Question 12

As of 2008, 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.E) A) and D)
F) A) and C)

Question 13

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

Accepted Answer

A)   5 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller.
B)   10 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller.
C)   5 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger.
D)   10 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger.E) None of the above
F) B) and D)

Question 14

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 15

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Accepted Answer

A)   represents an unconventional view of the production process.
B)   is an assertion that capital is subject to increasing returns.
C)   is made under the assumption that the quantities of human capital, natural resources, and technology are being held constant.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 16

If a Brazilian. company opens a new factory in Peru, it makes

Accepted Answer

A)   foreign direct investment. The factory will make a bigger impact on Peru's GDP than on its GNP.
B)   foreign direct investment. The factory will make a bigger impact on Peru's GNP than on its GDP.
C)   foreign portfolio investment. The factory will make a bigger impact on Peru's GDP than on its GNP.
D)   foreign portfolio investment. The factory will make a bigger impact on Peru's GNP than on its GDP.E) B) and D)
F) A) and D)

Question 17

Scenario 7-1. An economy's production form takes the form Y = AF(L, K, H, N) .
-Refer to Scenario 7-1. K represents the quantity of

Accepted Answer

A)   human capital only.
B)   physical capital only.
C)   human capital and physical capital combined.
D)   nonrenewable natural resources.E) A) and B)
F) A) and C)

Question 18

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Accepted Answer

Since bearing a child has an opportunity...

Question 19

Figure 7-1. On the horizontal axis, K/L represents capital (K)  per worker (L) . On the vertical axis, Y/L represents output (Y)  per worker (L) .
 
-Refer to Figure 7-1. The curve becomes flatter as the amount of capital per worker increases because of

Accepted Answer

A)   increasing returns to capital.
B)   increasing returns to labor.
C)   diminishing returns to capital.
D)   diminishing returns to labor.E) A) and B)
F) All of the above

Question 20

Country A experienced a growth rate of real GDP per person of 4 percent per year throughout the 1900's. In view of other countries' experiences during this time country A's growth was

Accepted Answer

A)   exceptionally high.
B)   moderately high.
C)   moderately low.
D)   exceptionally low.E) None of the above
F) A) and B)

Exam 7: Production and Growth

Figure 7-1. On the horizontal axis, K/L represents capital (K) per worker (L) . On the vertical axis, Y/L represents output (Y) per worker (L) . -Refer to Figure 7-1. The curve becomes flatter as the amount of capital per worker increases because of

Correct AnswerverifiedShow Answer

Scenario 7-1. An economy's production form takes the form Y = AF(L, K, H, N) . -Refer to Scenario 7-1. K represents the quantity of

Correct AnswerverifiedShow Answer

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Correct AnswerverifiedShow Answer

Suppose that real GDP grew more in Country A than in Country B last year.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a Brazilian. company opens a new factory in Peru, it makes

Correct AnswerverifiedShow Answer

Which of the following is considered human capital?

Correct AnswerverifiedShow Answer

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Correct AnswerverifiedShow Answer

In the equation for the production function Y/L represents

Correct AnswerverifiedShow Answer

As of 2008, using real GDP per person as a measure, we would classify

Correct AnswerverifiedShow Answer

A rapid increase in the number of workers, other things the same, is likely in the short term to

Correct AnswerverifiedShow Answer

In some East Asian countries, average income, as measured by real GDP per person, has recently grown at an average annual rate that implies output will double about every

Correct AnswerverifiedShow Answer

Average income has been stagnant for many years in

Correct AnswerverifiedShow Answer

Country A experienced a growth rate of real GDP per person of 4 percent per year throughout the 1900's. In view of other countries' experiences during this time country A's growth was

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Scenario 7-1. An economy's production form takes the form Y = AF(L, K, H, N) . -Refer to Scenario 7-1. If the production function has the constant-returns-to-scale property, then it could be rewritten as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Inventors often obtain patents on new products and processes, thereby turning new ideas into

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Correct AnswerverifiedSince bearing a child has an opportunity...View AnswerShow Answer

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Since bearing a child has an opportunity...
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