Question 1

Compared to the income of the typical Canadian 138 years previously, how much was the income of the typical Pakistani in 2010?

Accepted Answer

A)   about 1/2 as much
B)   about 2/3 as much
C)   about the same
D)   about 2 times as muchE) C) and D)
F) All of the above

Question 2

Last year, real GDP in Oceania was $620 billion and the population was 2.3 million. The year before, real GDP was $502 billion and the population was 2.0 million. What was the approximate growth rate of real GDP per person?

Accepted Answer

A)   3 percent
B)   7 percent
C)   10 percent
D)   17 percentE) C) and D)
F) A) and B)

Question 3

What best defines human capital?

Accepted Answer

A)   the knowledge and skills that workers acquire through education, training, and experience
B)   the stock of equipment and structures that is used to produce goods and services
C)   the total number of workers in the labour force
D)   the total amount that is paid in wages in an economyE) None of the above
F) All of the above

Question 4

A management professor discovers a way for corporate management to operate more efficiently. He publishes his findings in a journal. How are his findings best defined?

Accepted Answer

A)   proprietary knowledge, because only who the person pays for the journal has access to the findings
B)   common knowledge, because scientific publications are not subject to copyright
C)   proprietary knowledge, because the discoverer has intellectual property rights over the findings
D)   common knowledge, because all are free to use the findingsE) None of the above
F) A) and B)

Question 5

Other things equal, how do relatively poor countries tend to grow?

Accepted Answer

A)   They grow slower than relatively rich countries; this is called the poverty trap.
B)   They grow slower than relatively rich countries; this is called the Malthus effect.
C)   They grow faster than relatively rich countries; this is called the catch-up effect.
D)   They grow faster than relatively rich countries; this is called the constant-returns-to-scale effect.E) All of the above
F) None of the above

Question 6

Suppose that an economy with constant returns to scale doubled its physical capital stock, doubled its available natural resources, and doubled its human capital, but kept the size of the labour force the same. How does the change in output compare to the change in productivity?

Accepted Answer

A)   Output would stay the same and so would its productivity.
B)   Output and productivity would increase, but by less than double.
C)   Output and productivity would increase by more than double.
D)   Output would increase by less than double, but productivity would double.E) A) and C)
F) B) and C)

Question 7

Suppose an economy uses only two inputs in production: capital and labour. The following table describes a production function, where y stands for output per worker and k is capital per worker.
a) Draw approximately this production function with y on the vertical axis.
b) Show that this production function exhibits diminishing returns to scale.
c) Suppose there are two countries, A and B. The economies of the two countries can be described by this production function. If Country A has initially a capital-labour ratio k = 0.167 and Country B has k = 0.412, show that an equal increase in capital produces more extra output in country A than in Country B.

Accepted Answer

a) Here is a graph of the given producti...

Question 8

Which statement best describes the relationship between the initial wealth and the growth rate of a country?

Accepted Answer

A)   Countries with the highest growth rates over the past 100 years are the ones that had the highest level of real GDP 100 years ago.
B)   Countries that were rich a century ago had little fluctuation around their average growth rates during the past 100 years.
C)   Though the catch-up effect may suggest otherwise, the data show no strong relationship between initial conditions and growth rates.
D)   Over the past century, the United States had the highest real GDP growth rate, and now it has the highest real GDP per person.E) B) and C)
F) A) and C)

Question 9

The annual population growth rate in developed countries is about 1 percent, while the growth rate in developing countries is about 3 percent.

Accepted Answer

A) True 
 B)False

Question 10

Sydney Seger is a nurse. What is a part of her human capital?

Accepted Answer

A)   her emergency room experience
B)   the computer she uses
C)   the software she uses to record patient information
D)   the amount of time she spends with her patientsE) A) and C)
F) None of the above

Question 11

In 1870, what was the richest country in the world?

Accepted Answer

A)   Canada
B)   the United States
C)   the United Kingdom
D)   FranceE) All of the above
F) C) and D)

Question 12

On average, by how much does each year of schooling raise a person's wage in Canada?

Accepted Answer

A)   about 5 percent
B)   about 10 percent
C)   about 15 percent
D)   about 20 percentE) All of the above
F) A) and C)

Question 13

Your company discovers a better way to produce vacuum cleaners, but your better methods are not apparent from the vacuums themselves. What kind of knowledge is this?

Accepted Answer

A)   common technological knowledge
B)   common, but not technological, knowledge
C)   proprietary technological knowledge
D)   proprietary, but not technological, knowledgeE) B) and D)
F) B) and C)

Question 14

The president of a developing country proposes that his country needs to help domestic firms by imposing trade restrictions. What kind of policies are these?

Accepted Answer

A)   These are outward-oriented policies and most economists believe they would have beneficial effects on growth.
B)   These are outward-oriented policies and most economists believe they would have adverse effects on growth.
C)   These are inward-oriented policies and most economists believe they would have beneficial effects on growth.
D)   These are inward-oriented policies and most economists believe they would have adverse effects on growth.E) B) and D)
F) A) and B)

Question 15

Laurie works 8 hours and produces 7 units of goods per hour. Iris works 6 hours and produces 10 units of goods per hour. What can we conclude?

Accepted Answer

A)   Laurie's productivity and output are greater that Iris's.
B)   Laurie's productivity is greater than Iris's, but Laurie's output is less.
C)   Iris's productivity and output are greater than Laurie's.
D)   Iris's productivity is greater that Laurie's, but Iris's output is less.E) A) and C)
F) B) and C)

Question 16

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity

Accepted Answer

In addition to investment in physical an...

Question 17

Economists differ in their views of the role of the government in promoting economic growth. According to the text, at the very least, what should the government do?

Accepted Answer

A)   lend support to the invisible hand by maintaining property rights and political stability
B)   limit foreign investment to industries that don't already exist
C)   impose trade restrictions to protect the interests of domestic producers and consumers
D)   subsidize key industriesE) A) and C)
F) A) and B)

Question 18

Compare and contrast the population theories of Malthus and Kremer.

Accepted Answer

The difference is that Malthus predicted...

Question 19

In Canada, approximately how much higher is GDP per person today than it was a century ago?

Accepted Answer

A)   4 times higher
B)   6 times higher
C)   8 times higher
D)   12 times higherE) A) and B)
F) A) and C)

Question 20

What is a direct determinant of productivity?

Accepted Answer

A)   human capital
B)   wage
C)   price of natural resources
D)   unemployment rateE) B) and C)
F) A) and D)

Exam 7: Production and Growth

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity

Correct Answer
verified
In addition to investment in physical an...
View Answer

In 1870, what was the richest country in the world?

Correct Answer
verified

Economists differ in their views of the role of the government in promoting economic growth. According to the text, at the very least, what should the government do?

Correct Answer
verified

Last year, real GDP in Oceania was $620 billion and the population was 2.3 million. The year before, real GDP was $502 billion and the population was 2.0 million. What was the approximate growth rate of real GDP per person?

Correct Answer
verified

Compared to the income of the typical Canadian 138 years previously, how much was the income of the typical Pakistani in 2010?

Correct Answer
verified

Which statement best describes the relationship between the initial wealth and the growth rate of a country?

Correct Answer
verified

The president of a developing country proposes that his country needs to help domestic firms by imposing trade restrictions. What kind of policies are these?

Correct Answer
verified

Laurie works 8 hours and produces 7 units of goods per hour. Iris works 6 hours and produces 10 units of goods per hour. What can we conclude?

Correct Answer
verified

Your company discovers a better way to produce vacuum cleaners, but your better methods are not apparent from the vacuums themselves. What kind of knowledge is this?

Correct Answer
verified

The annual population growth rate in developed countries is about 1 percent, while the growth rate in developing countries is about 3 percent.

Correct Answer
verified

On average, by how much does each year of schooling raise a person's wage in Canada?

Correct Answer
verified

What is a direct determinant of productivity?

Correct Answer
verified

Compare and contrast the population theories of Malthus and Kremer.

Correct Answer
verified
The difference is that Malthus predicted...
View Answer

Other things equal, how do relatively poor countries tend to grow?

Correct Answer
verified

Sydney Seger is a nurse. What is a part of her human capital?

Correct Answer
verified

In Canada, approximately how much higher is GDP per person today than it was a century ago?

Correct Answer
verified

What best defines human capital?

Correct Answer
verified

Correct Answer
verified
a) Here is a graph of the given producti...
View Answer

Suppose that an economy with constant returns to scale doubled its physical capital stock, doubled its available natural resources, and doubled its human capital, but kept the size of the labour force the same. How does the change in output compare to the change in productivity?

Correct Answer
verified

A management professor discovers a way for corporate management to operate more efficiently. He publishes his findings in a journal. How are his findings best defined?

Correct Answer
verified

Exam 7: Production and Growth

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity

Correct AnswerverifiedIn addition to investment in physical an...View AnswerShow Answer

In 1870, what was the richest country in the world?

Correct AnswerverifiedShow Answer

Economists differ in their views of the role of the government in promoting economic growth. According to the text, at the very least, what should the government do?

Correct AnswerverifiedShow Answer

Last year, real GDP in Oceania was $620 billion and the population was 2.3 million. The year before, real GDP was $502 billion and the population was 2.0 million. What was the approximate growth rate of real GDP per person?

Correct AnswerverifiedShow Answer

Compared to the income of the typical Canadian 138 years previously, how much was the income of the typical Pakistani in 2010?

Correct AnswerverifiedShow Answer

Which statement best describes the relationship between the initial wealth and the growth rate of a country?

Correct AnswerverifiedShow Answer

The president of a developing country proposes that his country needs to help domestic firms by imposing trade restrictions. What kind of policies are these?

Correct AnswerverifiedShow Answer

Laurie works 8 hours and produces 7 units of goods per hour. Iris works 6 hours and produces 10 units of goods per hour. What can we conclude?

Correct AnswerverifiedShow Answer

Your company discovers a better way to produce vacuum cleaners, but your better methods are not apparent from the vacuums themselves. What kind of knowledge is this?

Correct AnswerverifiedShow Answer

The annual population growth rate in developed countries is about 1 percent, while the growth rate in developing countries is about 3 percent.

Correct AnswerverifiedShow Answer

On average, by how much does each year of schooling raise a person's wage in Canada?

Correct AnswerverifiedShow Answer

What is a direct determinant of productivity?

Correct AnswerverifiedShow Answer

Compare and contrast the population theories of Malthus and Kremer.

Correct AnswerverifiedThe difference is that Malthus predicted...View AnswerShow Answer

Other things equal, how do relatively poor countries tend to grow?

Correct AnswerverifiedShow Answer

Sydney Seger is a nurse. What is a part of her human capital?

Correct AnswerverifiedShow Answer

In Canada, approximately how much higher is GDP per person today than it was a century ago?

Correct AnswerverifiedShow Answer

What best defines human capital?

Correct AnswerverifiedShow Answer

Correct Answerverifieda) Here is a graph of the given producti...View AnswerShow Answer

Suppose that an economy with constant returns to scale doubled its physical capital stock, doubled its available natural resources, and doubled its human capital, but kept the size of the labour force the same. How does the change in output compare to the change in productivity?

Correct AnswerverifiedShow Answer

A management professor discovers a way for corporate management to operate more efficiently. He publishes his findings in a journal. How are his findings best defined?

Correct AnswerverifiedShow Answer

Correct Answer
verified
In addition to investment in physical an...
View Answer

Correct Answer
verified

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
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The difference is that Malthus predicted...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a) Here is a graph of the given producti...
View Answer

Correct Answer
verified

Correct Answer
verified