Question 1

Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to

Accepted Answer

A)   raise productivity. Other things the same, this increase will be larger in a poor country.
B)   raise productivity. Other things the same, this increase will be larger in a rich country.
C)   reduce productivity. Other things the same, this decrease will be larger in a poor country.
D)   reduce productivity. Other things the same, this decrease will be larger in a rich country.E) All of the above
F) A) and B)

Question 2

An economy's production function has the constant-returns-to-scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would

Accepted Answer

A)   stay the same.
B)   increase by exactly 50 percent.
C)   increase by exactly 100 percent.
D)   increase, but not necessarily by either 50 percent or 100 percent.E) None of the above
F) B) and D)

Question 3

Suppose that an American opens and operates a recording studio in Poland. This is an example of

Accepted Answer

A)   foreign direct investment. American saving is used to finance Polish investment.
B)   foreign direct investment. American saving is used to finance American investment.
C)   foreign portfolio investment. American saving is used to finance Polish investment.
D)   foreign portfolio investment. American saving is used to finance American investment.E) A) and B)
F) A) and C)

Question 4

The key determinant of the standard of living in a country is

Accepted Answer

A)   the amount of goods and services produced from each hour of a worker's time.
B)   the total amount of goods and services produced within the country.
C)   the total amount of its physical capital.
D)   its growth rate of real GDP.E) A) and B)
F) A) and C)

Question 5

Which of the following is an example of a nonrenewable resource?

Accepted Answer

A)   coal
B)   honey
C)   livestock
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 6

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) B) and C)
F) A) and B)

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) None of the above
F) A) and C)

Question 8

In 2008, income per person in the United States was about 16 times that in India.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

Most economists believe that poor nation...

Question 10

The slope of the production function with capital per worker on the horizontal axis and output per worker on the vertical axis

Accepted Answer

A)   is positive and gets steeper as capital per worker rises.
B)   is positive and gets flatter as capital per worker rises.
C)   is negative and gets steeper as capital per worker rises.
D)   is negative and gets flatter as capital per worker rises.E) All of the above
F) B) and D)

Question 11

National defense and knowledge are generally considered to be

Accepted Answer

A)   private goods.
B)   public goods.
C)   proprietary goods.
D)   societal goods.E) A) and B)
F) A) and C)

Question 12

Productivity

Accepted Answer

A)   is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries.
B)   explains very little of the differences in the standard of living across countries.
C)   explains some, but not most of the differences in the standard of living across countries.
D)   explains most of the differences in the standard of living across countries.E) C) and D)
F) None of the above

Question 13

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Accepted Answer

A) True 
 B)False

Question 14

An increase in the saving rate would, other things the same,

Accepted Answer

A)   increase growth more for a poor country than for a rich country, and raise growth permanently.
B)   increase growth more for a poor country than for a rich country, but raise growth temporarily.
C)   increase growth more for a rich country than for a poor country, and raise growth permanently.
D)   increase growth more for a rich country than for a poor country, but raise growth temporarily.E) A) and C)
F) A) and B)

Question 15

If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then

Accepted Answer

A)   Austrian GNP increases by more than Austrian GDP, because GDP includes income earned by foreigners working in Austria.
B)   Austrian GNP increases by more than Austrian GDP, because GDP excludes income earned by foreigners working in Austria.
C)   Austrian GNP increases by less than Austrian GDP, because GDP includes income earned by foreigners working in Austria.
D)   Austrian GNP increases by less than Austrian GDP, because GDP excludes income earned by foreigners working in Austria.E) A) and B)
F) B) and C)

Question 16

The notion that our ability to conserve natural resources is growing more rapidly than their supplies are dwindling is supported by the fact that

Accepted Answer

A)   most economists do not regard the availability of natural resources as a determinant of productivity.
B)   the quantity of natural resources does not enter into any production function.
C)   inflation-adjusted prices of most natural resources have been stable or fallen over time.
D)   inflation-adjusted prices of most natural resources have risen over time.E) A) and B)
F) B) and C)

Question 17

In 2009 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2010 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day. Productivity at Buckeye Brewing

Accepted Answer

A)   increased by 20%.
B)   increased by 16.67%.
C)   decreased by 1.67%.
D)   decreased by 40%.E) None of the above
F) B) and C)

Question 18

According to research by Robert Fogel, what proportion of the British population in 1780 was so malnourished that they could not perform manual labor?

Accepted Answer

A)   40 percent
B)   20 percent
C)   10 percent
D)   5 percentE) A) and C)
F) C) and D)

Question 19

Patents turn new ideas into

Accepted Answer

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

Question 20

Real Foods produced 400,000 cans of diced tomatoes in 2009 and 460,000 cans of diced tomatoes in 2010. It employed the same number of labor hours each year. Real Foods' productivity

Accepted Answer

A)   decreased 13 percent.
B)   was unchanged.
C)   increased 13 percent.
D)   increased 15 percent.E) C) and D)
F) B) and D)

Exam 7: Production and Growth

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Correct AnswerverifiedShow Answer

The key determinant of the standard of living in a country is

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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

In 2009 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2010 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day. Productivity at Buckeye Brewing

Correct AnswerverifiedShow Answer

In 2008, income per person in the United States was about 16 times that in India.

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An increase in the saving rate would, other things the same,

Correct AnswerverifiedShow Answer

Real Foods produced 400,000 cans of diced tomatoes in 2009 and 460,000 cans of diced tomatoes in 2010. It employed the same number of labor hours each year. Real Foods' productivity

Correct AnswerverifiedShow Answer

Patents turn new ideas into

Correct AnswerverifiedShow Answer

The slope of the production function with capital per worker on the horizontal axis and output per worker on the vertical axis

Correct AnswerverifiedShow Answer

The notion that our ability to conserve natural resources is growing more rapidly than their supplies are dwindling is supported by the fact that

Correct AnswerverifiedShow Answer

Suppose that an American opens and operates a recording studio in Poland. This is an example of

Correct AnswerverifiedShow Answer

Productivity

Correct AnswerverifiedShow Answer

An economy's production function has the constant-returns-to-scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would

Correct AnswerverifiedShow Answer

Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to

Correct AnswerverifiedShow Answer

According to research by Robert Fogel, what proportion of the British population in 1780 was so malnourished that they could not perform manual labor?

Correct AnswerverifiedShow Answer

Which of the following is an example of a nonrenewable resource?

Correct AnswerverifiedShow Answer

Productivity is the

Correct AnswerverifiedShow Answer

If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then

Correct AnswerverifiedShow Answer

National defense and knowledge are generally considered to be

Correct AnswerverifiedShow Answer

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

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

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Most economists believe that poor nation...
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