Question 1

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) All of the above

Question 2

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

Yes, the bowed-out concave) na...

Question 3

When a country removes trade barriers and imports appliances and exports engineering services,

Accepted Answer

A)   its growth slows.
B)   its productivity decreases.
C)   it is essentially transforming engineering services into appliances.
D)   its economic well-being decreases while that of the country that sells appliances increases.E) A) and B)
F) C) and D)

Question 4

Which of the following is not correct?

Accepted Answer

A)   China allows only one child per family and couples that violate this rule are subject to substantial fines.
B)   In developed countries, population growth is consistently about 3 percent per year; in developing countries it is consistently about 5 percent per year.
C)   Educational attainment tends to be lowest in countries with the highest population growth.
D)   Economists generally believe that a country that decreases a high population growth rate can increase its economic growth rate.E) B) and C)
F) A) and D)

Question 5

Megan is a landscaper. Which of the following are included in her physical capital?

Accepted Answer

A)   her knowledge of landscaping learned in college and her landscaping equipment
B)   her knowledge of landscaping learned in college, but not her landscaping equipment
C)   her landscaping equipment, but not her knowledge of landscaping learned in college
D)   neither her knowledge of landscaping learned in college nor her landscaping equipmentE) All of the above
F) A) and C)

Question 6

Which of the following is correct?

Accepted Answer

A)   There is no debate about the effects of higher population growth on economic growth.
B)   Natural resources clearly place limits on growth; there is simply no way to reduce either the amount or type of natural resources needed to produce goods.
C)   How much an increase in capital increases a country's output is independent of that country's current level of capital.
D)   Economists argue that outward rather than inward policies are likely to promote economic growth.E) A) and B)
F) A) and C)

Question 7

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.E) None of the above
F) C) and D)

Question 8

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Accepted Answer

A)   the level of saving per person is 10,000 in country A and 10,000 in country B.
B)   the level of saving per person is 12,000 in country A and 15,000 in country B.
C)   Both of the above are correct.
D)   None of the above are correct.E) B) and C)
F) None of the above

Question 9

If the price of a good has risen over time,

Accepted Answer

A)   it must have become more scarce.
B)   it must have become less scarce.
C)   it has become more scarce only if the price adjusted for inflation has risen.
D)   it has become less scarce only if the price adjusted for inflation has risen.E) None of the above
F) C) and D)

Question 10

Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of 16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About what was the growth rate of real GDP per person between last year and this year?

Accepted Answer

A)   -5.3 percent
B)   -5 percent
C)   5 percent
D)   5.3 percentE) C) and D)
F) A) and B)

Question 11

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.E) None of the above
F) All of the above

Question 12

Because of its vast oil reserves, Saudi Arabia is a rich country. Saudi Arabia exemplifies the general fact that differences in _______ are responsible for some of the differences in standards of living around the world.

Accepted Answer

The answer of Because of its vast oil reserves, Saudi...

Question 13

Country A and country B both increase their capital stock by one unit. Output in country A increases by 12 while output in country B increases by 15. Other things the same, diminishing returns implies that country A is

Accepted Answer

A)   richer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units.
B)   richer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units.
C)   poorer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units.
D)   poorer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units.E) B) and C)
F) A) and D)

Question 14

Suppose that a new government is elected in Eurnesia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting. These changes will probably

Accepted Answer

A)   raise real GDP per person and productivity in Eurnesia.
B)   raise real GDP per person but not productivity in Eurnesia.
C)   raise productivity but not real GDP per person in Eurnesia.
D)   raise neither productivity nor real GDP per person in Eurnesia.E) All of the above
F) A) and D)

Question 15

If an inexpensive alternative to oil were found, the price of oil adjusted for inflation

Accepted Answer

A)   would decline as the alternative would reduce the demand for oil.
B)   would decline as the alternative would reduce the supply of oil.
C)   would increase as the alternative would increase the demand for oil.
D)   would increase as the alternative would increase the supply of oil.E) A) and B)
F) All of the above

Question 16

If a production function has constant returns to scale, output can be doubled if

Accepted Answer

A)   labor alone doubles.
B)   all inputs but labor double.
C)   all of the inputs double.
D)   None of the above is correct.E) None of the above
F) B) and D)

Question 17

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

Accepted Answer

Inward­oriented policies are i...

Question 18

Which of the following is an example of human capital?

Accepted Answer

A)   a student loan
B)   knowledge learned from reading books
C)   training videos for new corporate employees
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 19

As capital per worker rises, output per worker rises. However, this increase in output per worker is smaller at smaller levels of existing capital per worker.

Accepted Answer

A) True 
 B)False

Question 20

If an economy with constant returns to scale were to double its physical capital stock, its available natural resources, and its human capital, but leave the size of the labor force the same,

Accepted Answer

A)   its output would stay the same and so would its productivity.
B)   its output and productivity would increase, but less than double.
C)   its output and productivity would increase by more than double.
D)   None of the above is correct.E) A) and D)
F) A) and C)

Exam 17: Production and Growth

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

Correct Answer
verified

If an inexpensive alternative to oil were found, the price of oil adjusted for inflation

Correct Answer
verified

Because of its vast oil reserves, Saudi Arabia is a rich country. Saudi Arabia exemplifies the general fact that differences in _______ are responsible for some of the differences in standards of living around the world.

Correct Answer
verified

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.

Correct Answer
verified
Yes, the bowed-out concave) na...
View Answer

Which of the following is not correct?

Correct Answer
verified

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Correct Answer
verified

Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of 16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About what was the growth rate of real GDP per person between last year and this year?

Correct Answer
verified

If an economy with constant returns to scale were to double its physical capital stock, its available natural resources, and its human capital, but leave the size of the labor force the same,

Correct Answer
verified

As capital per worker rises, output per worker rises. However, this increase in output per worker is smaller at smaller levels of existing capital per worker.

Correct Answer
verified

If the price of a good has risen over time,

Correct Answer
verified

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

When a country removes trade barriers and imports appliances and exports engineering services,

Correct Answer
verified

If a production function has constant returns to scale, output can be doubled if

Correct Answer
verified

Which of the following is an example of human capital?

Correct Answer
verified

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

Correct Answer
verified
Inwardoriented policies are i...
View Answer

Country A and country B both increase their capital stock by one unit. Output in country A increases by 12 while output in country B increases by 15. Other things the same, diminishing returns implies that country A is

Correct Answer
verified

Megan is a landscaper. Which of the following are included in her physical capital?

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Exam 17: Production and Growth

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

Correct AnswerverifiedShow Answer

If an inexpensive alternative to oil were found, the price of oil adjusted for inflation

Correct AnswerverifiedShow Answer

Because of its vast oil reserves, Saudi Arabia is a rich country. Saudi Arabia exemplifies the general fact that differences in _______ are responsible for some of the differences in standards of living around the world.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedYes, the bowed-out concave) na...View AnswerShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Correct AnswerverifiedShow Answer

Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of 16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About what was the growth rate of real GDP per person between last year and this year?

Correct AnswerverifiedShow Answer

If an economy with constant returns to scale were to double its physical capital stock, its available natural resources, and its human capital, but leave the size of the labor force the same,

Correct AnswerverifiedShow Answer

As capital per worker rises, output per worker rises. However, this increase in output per worker is smaller at smaller levels of existing capital per worker.

Correct AnswerverifiedShow Answer

If the price of a good has risen over time,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

When a country removes trade barriers and imports appliances and exports engineering services,

Correct AnswerverifiedShow Answer

If a production function has constant returns to scale, output can be doubled if

Correct AnswerverifiedShow Answer

Which of the following is an example of human capital?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedInward­oriented policies are i...View AnswerShow Answer

Country A and country B both increase their capital stock by one unit. Output in country A increases by 12 while output in country B increases by 15. Other things the same, diminishing returns implies that country A is

Correct AnswerverifiedShow Answer

Megan is a landscaper. Which of the following are included in her physical capital?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Yes, the bowed-out concave) na...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Inwardoriented policies are i...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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