Question 1

Which of the following is correct?

Accepted Answer

A)   Over the last 100 years Japan had a higher average growth rate than the United States. It follows that, today, the standard of living in Japan is higher than in the United States.
B)   The typical person in Bangladesh today has about twice the real income of a typical American 100 years ago.
C)   The typical citizen of China today has about one-half as much real income as the typical citizen of America today.
D)   None of the above is correct.E) A) and D)
F) A) and C)

Question 2

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 3

The same size decrease in the amount of capital stock per worker will cause output per worker to fall by more in a country with a relatively high level of capital per worker than in a country with a relatively low level of capital per worker.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following lists contains, in this order, natural resources, human capital, and physical capital?

Accepted Answer

A)   For a restaurant: the land the restaurant was built on, the money it borrowed to buy supplies, the freezers where the chops and steaks are kept.
B)   For a furniture company: wood, the skills and knowledge of its workers, saws.
C)   For a railroad: fuel, railroad engines, railroad tracks.
D)   None of the above is correct.E) B) and C)
F) B) and D)

Question 5

Which of the following statements is correct?

Accepted Answer

A)   In an economy-wide sense, property rights are an important prerequisite for the price system to work.
B)   Property rights give people the ability to exercise authority over the resources they own.
C)   Based on the available evidence, the existence of well-established and well-enforced property rights appears to be associated with an enhanced standard of living.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 6

Which of the following measures how the level of well-being in a country has changed over time?

Accepted Answer

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

Question 7

According to research by Robert Fogel, what proportion of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake?

Accepted Answer

A)   10 percent
B)   20 percent
C)   30 percent
D)   40 percentE) A) and B)
F) All of the above

Question 8

Once an idea enters society's pool of knowledge, the idea becomes a

Accepted Answer

A)   societal good.
B)   private good.
C)   public good.
D)   proprietary good.E) B) and C)
F) None of the above

Question 9

Daniel owns a coffee kiosk. All of his employees work 8 hours per day. In 2011, he employed 6 people who produced a total of 912 cups of coffee each day. In 2012, he hired a seventh employee and production increased to 1008 cups of coffee each day. In Daniel's kiosk, productivity

Accepted Answer

A)   increased by about 10.5 percent
B)   increased by 9.5 percent
C)   decreased by about 5.6 percent
D)   decreased by about 5.3 percentE) C) and D)
F) A) and B)

Question 10

Over the period 1960-1990,

Accepted Answer

A)   South Korea had a higher growth rate than the United States because it had a higher ratio of investment to GDP.
B)   the United States had a higher growth rate than South Korea because it had a higher ratio of investment to GDP.
C)   South Korea had a higher growth rate than the United States even though it had a similar ratio of investment to GDP.
D)   the United States had a higher growth rate than South Korea even though it had a similar ratio of investment to real GDP.E) A) and B)
F) All of the above

Question 11

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) B) and C)
F) All of the above

Question 12

Consider the nations of Brazil, Mexico, and Pakistan. Over the past century, which of these three nations has experienced, by far, slower economic growth than the other two nations?

Accepted Answer

Pakistan's growth rate 1.20 pe...

Question 13

Which of the following pairs of terms refer to the same thing?

Accepted Answer

A)   "capital" and "physical capital"
B)   "technological knowledge" and "human capital"
C)   "standard of living" and "human capital"
D)   "standard of living" and "productivity"E) B) and D)
F) C) and D)

Question 14

An increase in capital will increase real GNP per person

Accepted Answer

A)   more in a poor country than a rich country. The increase in real GNP per person will be larger if the addition to capital is from domestic rather than foreign investment.
B)   more in a poor country than a rich country. The increase in real GNP per person will be larger if the addition to capital is foreign rather than from domestic investment.
C)   less in a poor country than a rich country. The increase in real GNP per person will be larger if the addition to capital is from domestic rather than foreign investment.
D)   less in a poor country than a rich country. The increase in real GNP per person will be larger if the addition to capital is foreign rather than from domestic investment.E) A) and B)
F) B) and D)

Question 15

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

Question 16

Which country has had a higher growth rate than the US over about the last 120 years?

Accepted Answer

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

Question 17

According to the traditional view of the production function, which of the following values of the additions to output per worker would be consistent with moving from 5 to 6, and then from 6 to 7, and then from 7 to 8 units of capital per worker in that order?

Accepted Answer

A)   40, 40, 40
B)   40, 35, 38
C)   40, 34, 32
D)   40, 43, 48E) A) and B)
F) C) and D)

Question 18

Country A has real GDP per person of 250,000 while Country B has real GDP per person of 500,000. 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 5.000 in Country A and 7,500 in Country B.
B)   the level of saving per person is 3,000 in Country A and 6,000 in Country B.
C)   Both of the above are correct.
D)   None of the above are correct.E) B) and C)
F) A) and B)

Question 19

Educated people may generate ideas that increase production. These ideas

Accepted Answer

A)   produce a return to society from education that is greater than the return to the individual.
B)   could justify government subsides for education.
C)   are external benefits of education.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 20

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Accepted Answer

A)   8
B)   10
C)   80
D)   120E) A) and C)
F) A) and B)

Exam 7: Production and Growth

Educated people may generate ideas that increase production. These ideas

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

An increase in capital will increase real GNP per person

Correct AnswerverifiedShow Answer

According to the traditional view of the production function, which of the following values of the additions to output per worker would be consistent with moving from 5 to 6, and then from 6 to 7, and then from 7 to 8 units of capital per worker in that order?

Correct AnswerverifiedShow Answer

Which of the following pairs of terms refer to the same thing?

Correct AnswerverifiedShow Answer

Consider the nations of Brazil, Mexico, and Pakistan. Over the past century, which of these three nations has experienced, by far, slower economic growth than the other two nations?

Correct AnswerverifiedPakistan's growth rate 1.20 pe...View AnswerShow Answer

Which of the following is an example of human capital?

Correct AnswerverifiedShow Answer

Which of the following lists contains, in this order, natural resources, human capital, and physical capital?

Correct AnswerverifiedShow Answer

Which country has had a higher growth rate than the US over about the last 120 years?

Correct AnswerverifiedShow Answer

The same size decrease in the amount of capital stock per worker will cause output per worker to fall by more in a country with a relatively high level of capital per worker than in a country with a relatively low level of capital per worker.

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

Which of the following is correct?

Correct AnswerverifiedShow Answer

Once an idea enters society's pool of knowledge, the idea becomes a

Correct AnswerverifiedShow Answer

Country A has real GDP per person of 250,000 while Country B has real GDP per person of 500,000. All else constant, Country A will eventually have a higher standard of living than Country B if

Correct AnswerverifiedShow Answer

According to research by Robert Fogel, what proportion of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake?

Correct AnswerverifiedShow Answer

Over the period 1960-1990,

Correct AnswerverifiedShow Answer

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Correct AnswerverifiedShow Answer

Daniel owns a coffee kiosk. All of his employees work 8 hours per day. In 2011, he employed 6 people who produced a total of 912 cups of coffee each day. In 2012, he hired a seventh employee and production increased to 1008 cups of coffee each day. In Daniel's kiosk, productivity

Correct AnswerverifiedShow Answer

Which of the following measures how the level of well-being in a country has changed over time?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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Pakistan's growth rate 1.20 pe...
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When an economy initially has a small am...
View Answer

Correct Answer
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