Question 1

Over the last 100 years which of the following had growth rates higher than that of the United States?

Accepted Answer

A)  the United Kingdom
B)  India
C)  Mexico
D)  None of the above is correct.E) A) and B)
F) C) and D)

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 capitalE) C) and D)
F) B) and D)

Question 3

Which of the following is considered human capital? Knowledge acquired from

Accepted Answer

A)  early childhood education programs
B)  job training
C)  on-the-job experience
D)  All of the above are correct.E) C) and D)
F) None of the above

Question 4

For a given year, productivity in a particular country is most closely matched with that country's

Accepted Answer

A)  level of real GDP over that year.
B)  level of real GDP divided by hours worked over that year.
C)  growth rate of real GDP divided by hours worked over that year.
D)  growth rate of real GDP per person over that year.E) A) and B)
F) All of the above

Question 5

If a country's saving rate declined, then other things the same, in the long run the country would have

Accepted Answer

A)  lower productivity, but not lower real GDP per person.
B)  lower productivity and lower real GDP per person.
C)  lower real GDP per person, but not lower productivity
D)  neither lower productivity nor lower real GDP per person.E) A) and D)
F) B) and C)

Question 6

During the past century the average growth rate of U.S. real GDP per person implies that it doubled, on average, about every

Accepted Answer

A)  100 years.
B)  70 years.
C)  35 years.
D)  25 years.E) A) and B)
F) A) and C)

Question 7

How do outward-oriented policies affect a nation's productivity?

Accepted Answer

Most economists believe that poor nation...

Question 8

The average income in a rich country, such as the United States or Japan, is more than

Accepted Answer

A)  3 times, but less than 5 times, the average income in a poor country, such as Indonesia or Nigeria.
B)  5 times, but less than 10 times, the average income in a poor country, such as Indonesia or Nigeria.
C)  10 times, but less than 20 times, the average income in a poor country, such as Indonesia or Nigeria.
D)  more than 20 times the average income in a poor country, such as Indonesia or Nigeria.E) None of the above
F) A) and D)

Question 9

On a production function, as capital per worker increases, output per worker

Accepted Answer

A)  increases. This increase is larger at larger values of capital per worker.
B)  increases. This increase is smaller at larger values of capital per worker.
C)  decreases. This decrease is larger at larger value of capital per worker.
D)  decreases. This decrease is smaller at larger value of capital per worker.E) C) and D)
F) B) and D)

Question 10

In a market economy, scarcity of resources is most clearly reflected in

Accepted Answer

A)  supply.
B)  demand.
C)  market prices.
D)  the stock of the resource.E) None of the above
F) A) and C)

Question 11

Which of the following is true?

Accepted Answer

A)  Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Malthus argued that increasing population would outstrip agricultural production.
B)  Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.
C)  Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Kremer argued that increasing population would outstrip agricultural production.
D)  Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.E) None of the above
F) B) and C)

Question 12

If one wants to know how the material well-being of the average person has changed over time in a given country, one should look at the

Accepted Answer

A)  level of real GDP.
B)  growth rate of nominal GDP.
C)  growth rate of real GDP.
D)  growth rate of real GDP per person.E) B) and D)
F) All of the above

Question 13

Which of the following nations experienced average rates of economic growth of less than 2 percent over the last 100 years?

Accepted Answer

A)  Bangladesh
B)  Pakistan
C)  United Kingdom
D)  All of the above are correct.E) A) and C)
F) B) and D)

Question 14

Suppose a country imposes new restrictions on how many hours people can work. If these restrictions reduce 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.E) None of the above
F) C) and D)

Question 15

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Accepted Answer

A)  human capital.
B)  physical capital.
C)  natural resources.
D)  technological knowledge.E) A) and B)
F) B) and D)

Question 16

In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity?

Accepted Answer

A)  4000 pounds of laundry
B)  500 pounds of laundry per hour
C)  100 pounds of laundry per hour
D)  None of the above is correct.E) A) and B)
F) A) and C)

Question 17

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

Accepted Answer

A)  fall to less than one-half of its former value.
B)  fall, but it would still be greater than one-half of its former value.
C)  stay the same.
D)  rise but less than double.E) B) and C)
F) A) and D)

Question 18

Your company discovers a better way to produce mousetraps, but your better methods are not apparent from the mousetraps themselves. Your knowledge of how to more efficiently produce mousetraps is

Accepted Answer

A)  common technological knowledge.
B)  common, but not technological, knowledge.
C)  proprietary technological knowledge.
D)  proprietary, but not technological, knowledge.E) B) and C)
F) All of the above

Question 19

Incentives for parents to send their children to school, such as small monthly payments to parents if their children have regular attendance, appear to increase school attendance.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

Accepted Answer

A)  natural rights
B)  property rights
C)  input control
D)  collective controlE) A) and B)
F) B) and C)

Exam 12: Production and Growth

In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity?

Correct AnswerverifiedShow Answer

For a given year, productivity in a particular country is most closely matched with that country's

Correct AnswerverifiedShow Answer

The average income in a rich country, such as the United States or Japan, is more than

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Over the last 100 years which of the following had growth rates higher than that of the United States?

Correct AnswerverifiedShow Answer

Which of the following nations experienced average rates of economic growth of less than 2 percent over the last 100 years?

Correct AnswerverifiedShow Answer

Incentives for parents to send their children to school, such as small monthly payments to parents if their children have regular attendance, appear to increase school attendance.

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

During the past century the average growth rate of U.S. real GDP per person implies that it doubled, on average, about every

Correct AnswerverifiedShow Answer

On a production function, as capital per worker increases, output per worker

Correct AnswerverifiedShow Answer

Your company discovers a better way to produce mousetraps, but your better methods are not apparent from the mousetraps themselves. Your knowledge of how to more efficiently produce mousetraps is

Correct AnswerverifiedShow Answer

In a market economy, scarcity of resources is most clearly reflected in

Correct AnswerverifiedShow Answer

If one wants to know how the material well-being of the average person has changed over time in a given country, one should look at the

Correct AnswerverifiedShow Answer

How do outward-oriented policies affect a nation's productivity?

Correct AnswerverifiedMost economists believe that poor nation...View AnswerShow Answer

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

Correct AnswerverifiedShow Answer

Suppose a country imposes new restrictions on how many hours people can work. If these restrictions reduce the total number of hours worked in the economy, but all other factors that determine output are held fixed, then

Correct AnswerverifiedShow Answer

If a country's saving rate declined, then other things the same, in the long run the country would have

Correct AnswerverifiedShow Answer

Which of the following is considered human capital? Knowledge acquired from

Correct AnswerverifiedShow Answer

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

Correct AnswerverifiedShow Answer

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Correct AnswerverifiedShow Answer

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Most economists believe that poor nation...
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