Question 1

Countries that have lower levels of real GDP per person than the United States

Accepted Answer

A)   tend to have growth rates that are higher than that of the United States.
B)   tend to have growth rates that are about the same as that of the United States.
C)   tend to have growth rates that are lower than that of the United States.
D)   in some cases have growth rates that are higher than that of the United States and in other cases lower than that of the United States.E) A) and B)
F) None of the above

Question 2

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Accepted Answer

A) True 
 B)False

Question 3

Country A had a population of 2,000, of whom 1,300 worked an average of 8 hours a day and had a productivity of 5.Country B had a population of 2,500, of whom 1,700 worked 8 hours a day and had productivity of 4. Country

Accepted Answer

A)   A had the higher level of real GDP and real GDP per person.
B)   A had the higher level of real GDP and Country B had the higher level of real GDP per person
C)   B had the higher level of real GDP and Country A had the higher level of real GDP per person
D)   B had the higher level of real GDP and real GDP per person.E) C) and D)
F) B) and D)

Question 4

Which of the following best illustrates the human capital of a survivor stranded on an island?

Accepted Answer

A)   the fishing poles she has produced
B)   the invention of a better fishing lure
C)   the fresh fruit and fish on and around the island
D)   her previous training in a survival courseE) All of the above
F) A) and C)

Question 5

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Accepted Answer

A)   productivity.
B)   population.
C)   preferences.
D)   prices.E) All of the above
F) A) and C)

Question 6

Is physical capital a produced factor of production? Is human capital a produced factor of production?

Accepted Answer

Both physical capita...

Question 7

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?

Accepted Answer

A)   both output and productivity
B)   output, but not productivity
C)   productivity, but not output
D)   neither productivity nor outputE) C) and D)
F) A) and B)

Question 8

Assuming diminishing returns,

Accepted Answer

A)   the increase in output growth from an increase in the saving rate rises over time, and that, other things the same, rich countries should grow faster than poor ones.
B)   the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, rich countries should grow faster than poor ones.
C)   the increase in output growth from an increase in the saving rate rises over time, and that, other things the same, poor countries should grow faster than rich ones.
D)   the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, poor countries should grow faster than rich ones.E) A) and C)
F) C) and D)

Question 9

If your firm's production function has constant returns to scale, and if you double all your inputs, then your firm's productivity will

Accepted Answer

A)   not change.
B)   increase but not double.
C)   double.
D)   more than double.E) A) and B)
F) B) and D)

Question 10

The dictator of Turan has recently begun to arbitrarily seize farms belonging to his political opponents, and he has given the farms to his friends. His friends don't know much about farming. The courts in Turan have ruled that the seizures are illegal, but the dictator has ignored the rulings. Other things equal, we would expect that the growth rate in Turan will

Accepted Answer

A)   fall temporarily, but will return to where it was when the new owners learn how to farm.
B)   increase because the total amount of human capital in the country will increase as the new owners learn how to farm.
C)   fall and remain lower for a long time.
D)   not be affected unless widespread civil disorder or civil war results.E) None of the above
F) B) and C)

Question 11

Is coal a produced factor of production?

Accepted Answer

No. Coal is a natural resource...

Question 12

The return to schooling for society is higher than the return to schooling for the individual if

Accepted Answer

A)   the concept of diminishing returns applies to education.
B)   the concept of constant returns to scale applies to education.
C)   human capital conveys positive externalities.
D)   investment in human capital involves no opportunity costs.E) B) and C)
F) A) and B)

Question 13

A basic principle of economics is that a country's standard of living depends on its

Accepted Answer

A)   quantity of physical capital.
B)   abundance of natural resources.
C)   ability to produce goods and services.
D)   ability to thrive economically without having to interact with other countries.E) A) and B)
F) A) and C)

Question 14

In 2011, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours per day. In 2012, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per day. Productivity at Modern Electronics

Accepted Answer

A)   decreased by 4%
B)   remained constant.
C)   increased by 8.33%
D)   increased by 27.50%E) C) and D)
F) B) and C)

Question 15

The catch-up effect refers to the idea that poor countries, despite their best efforts, are not likely ever to experience the economic growth rates of wealthier countries.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is correct?

Accepted Answer

A)   Growth of productivity is the main determinant of growth in living standards.
B)   Common knowledge and proprietary technology are both important for the economy's production of goods and services.
C)   The terms capital and physical capital refer to the same thing.
D)   All of the above are correct.E) All of the above
F) A) and B)

Question 17

Productivity is the

Accepted Answer

A)   key determinant of living standards, and growth in productivity is the key determinant of growth in living standards.
B)   key determinant of living standards, but growth in productivity is not the key determinant of growth in living standards.
C)   not the key determinant of living standards, but growth in productivity is the key determinant of growth in living standards.
D)   not the key determinant of living standards, and growth in productivity is not the key determinant of growth in living standards.E) A) and C)
F) B) and C)

Question 18

How does the phenomenon of diminishing returns to capital explain the catch-up effect?

Accepted Answer

When an economy initially has a small am...

Question 19

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Accepted Answer

A)   both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia.
B)   both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia.
C)   both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia.
D)   both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.E) B) and D)
F) B) and C)

Question 20

Economists differ in their views of the role of the government in promoting economic growth. A controversial idea is that government should

Accepted Answer

A)   lend support to the invisible hand by maintaining property rights and political stability.
B)   lower barriers and impediments to free trade.
C)   encourage capital formation.
D)   target and subsidize specific industries important for technological progress.E) A) and B)
F) A) and C)

Exam 17: Production and Growth

Is physical capital a produced factor of production? Is human capital a produced factor of production?

Correct Answer
verified
Both physical capita...
View Answer

In 2011, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours per day. In 2012, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per day. Productivity at Modern Electronics

Correct Answer
verified

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Correct Answer
verified

Which of the following best illustrates the human capital of a survivor stranded on an island?

Correct Answer
verified

The return to schooling for society is higher than the return to schooling for the individual if

Correct Answer
verified

How does the phenomenon of diminishing returns to capital explain the catch-up effect?

Correct Answer
verified
When an economy initially has a small am...
View Answer

Productivity is the

Correct Answer
verified

Country A had a population of 2,000, of whom 1,300 worked an average of 8 hours a day and had a productivity of 5.Country B had a population of 2,500, of whom 1,700 worked 8 hours a day and had productivity of 4. Country

Correct Answer
verified

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Correct Answer
verified

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Correct Answer
verified

A basic principle of economics is that a country's standard of living depends on its

Correct Answer
verified

Economists differ in their views of the role of the government in promoting economic growth. A controversial idea is that government should

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Correct Answer
verified

Assuming diminishing returns,

Correct Answer
verified

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?

Correct Answer
verified

Countries that have lower levels of real GDP per person than the United States

Correct Answer
verified

If your firm's production function has constant returns to scale, and if you double all your inputs, then your firm's productivity will

Correct Answer
verified

The catch-up effect refers to the idea that poor countries, despite their best efforts, are not likely ever to experience the economic growth rates of wealthier countries.

Correct Answer
verified

Is coal a produced factor of production?

Correct Answer
verified
No. Coal is a natural resource...
View Answer

Exam 17: Production and Growth

Is physical capital a produced factor of production? Is human capital a produced factor of production?

Correct AnswerverifiedBoth physical capita...View AnswerShow Answer

In 2011, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours per day. In 2012, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per day. Productivity at Modern Electronics

Correct AnswerverifiedShow Answer

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Correct AnswerverifiedShow Answer

Which of the following best illustrates the human capital of a survivor stranded on an island?

Correct AnswerverifiedShow Answer

The return to schooling for society is higher than the return to schooling for the individual if

Correct AnswerverifiedShow Answer

How does the phenomenon of diminishing returns to capital explain the catch-up effect?

Correct AnswerverifiedWhen an economy initially has a small am...View AnswerShow Answer

Productivity is the

Correct AnswerverifiedShow Answer

Country A had a population of 2,000, of whom 1,300 worked an average of 8 hours a day and had a productivity of 5.Country B had a population of 2,500, of whom 1,700 worked 8 hours a day and had productivity of 4. Country

Correct AnswerverifiedShow Answer

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Correct AnswerverifiedShow Answer

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Correct AnswerverifiedShow Answer

A basic principle of economics is that a country's standard of living depends on its

Correct AnswerverifiedShow Answer

Economists differ in their views of the role of the government in promoting economic growth. A controversial idea is that government should

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assuming diminishing returns,

Correct AnswerverifiedShow Answer

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?

Correct AnswerverifiedShow Answer

Countries that have lower levels of real GDP per person than the United States

Correct AnswerverifiedShow Answer

If your firm's production function has constant returns to scale, and if you double all your inputs, then your firm's productivity will

Correct AnswerverifiedShow Answer

The catch-up effect refers to the idea that poor countries, despite their best efforts, are not likely ever to experience the economic growth rates of wealthier countries.

Correct AnswerverifiedShow Answer

Is coal a produced factor of production?

Correct AnswerverifiedNo. Coal is a natural resource...View AnswerShow Answer

Correct Answer
verified
Both physical capita...
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
verified
When an economy initially has a small am...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
No. Coal is a natural resource...
View Answer