Question 1

In 2009, the imaginary nation of Viloxia had a population of 5,000 and real GDP of 500,000. In 2010 it had a population of 5,100 and real GDP of 520,200. During 2009 real GDP in Viloxia grew by

Accepted Answer

A)   2 percent, which is high compared to average U.S. growth over the last one-hundred years.
B)   2 percent, which is about the same as average U.S. growth over the last one-hundred years.
C)   4 percent, which is high compared to average U.S. growth over the last one-hundred years.
D)   4 percent, which is about the same as average U.S. growth over the last one-hundred years.E) A) and D)
F) C) and D)

Question 2

Increases in both human capital per worker and physical capital per worker increase productivity.

Accepted Answer

A) True 
 B)False

Question 3

If a good has become more scarce, then we know for sure that

Accepted Answer

A)   the demand for it increased.
B)   the supply of it decreased.
C)   either the demand for it increased or the supply of it decreased.
D)   both the supply of it and the demand for it decreased.E) B) and D)
F) None of the above

Question 4

A country experiencing a growth rate of 8% per year can go from being one of the poorest to one of the richest in how many generations?

Accepted Answer

A)   one
B)   two
C)   three
D)   fourE) None of the above
F) B) and C)

Question 5

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 6

Inward-oriented policies

Accepted Answer

A)   include imposing tariffs and other trade restrictions.
B)   have generally increased productivity and growth in the countries that pursued them.
C)   promote the production of goods and services that the country produces most efficiently.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 7

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

Question 8

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

A)   education
B)   research and development
C)   nutrition
D)   trade restrictionsE) A) and D)
F) B) and C)

Question 9

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and standard of living mean. Make a list of things that determine labor productivity.

Accepted Answer

The standard of living is a measure of h...

Question 10

Which of the following would be considered physical capital?

Accepted Answer

A)   the available knowledge on how to make semiconductors
B)   a taxi-cab driver's knowledge of the fastest routes to take
C)   bulldozers, backhoes and other construction equipment
D)   All of the above are correct.E) B) and D)
F) B) and C)

Question 11

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 12

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) C) and D)

Question 13

If an economy with constant returns to scale were to double its physical capital stock, its available natural resources, and its human capital, but leave the size of the labor force the same,

Accepted Answer

A)   its output would stay the same and so would its productivity.
B)   its output and productivity would increase, but less than double.
C)   its output and productivity would increase by more than double.
D)   None of the above is correct.E) C) and D)
F) None of the above

Question 14

Which of the following is a determinant of productivity?

Accepted Answer

A)   human capital per worker
B)   physical capital per worker
C)   natural resources per worker
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 15

If a production function has constant returns to scale, output can be doubled if

Accepted Answer

A)   labor alone doubles.
B)   all inputs but labor double.
C)   all of the inputs double.
D)   None of the above is correct.E) B) and C)
F) C) and D)

Question 16

A country's human capital increases

Accepted Answer

A)   if its workers become better educated or healthier.
B)   only if its workers become better educated.
C)   only if its workers become healthier.
D)   None of the above is correct.E) None of the above
F) A) and D)

Question 17

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

Accepted Answer

A) True 
 B)False

Question 18

Mary looks over reports on four of her workers. Jack made 25 baskets in 5 hours. Walter made 36 baskets in 6 hours. Rudy made 40 baskets in 10 hours. Sam made 22 baskets in four hours. Who has the greatest productivity?

Accepted Answer

A)   Jack
B)   Walter
C)   Rudy
D)   SamE) None of the above
F) All of the above

Question 19

Country A and country B are the same except country A currently has a lower level of capital. Assuming diminishing returns, if both countries increase their capital by 100 units and other factors that determine output are unchanged, then

Accepted Answer

A)   output in country A increases by more than in country B.
B)   output in country A increases by the same amount as in country B.
C)   output in country A increases by less than in country B.
D)   None of the above is necessarily correct.E) All of the above
F) A) and B)

Question 20

Which of the following would, by itself, reveal the most about a country's standard of living?

Accepted Answer

A)   its level of capital
B)   the number of hours worked
C)   its availability of natural resources
D)   its productivityE) A) and D)
F) A) and C)

Exam 7: Production and Growth

Which of the following statements is correct?

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

Which of the following would be considered physical capital?

Correct AnswerverifiedShow Answer

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

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

Correct AnswerverifiedShow Answer

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Correct AnswerverifiedShow Answer

In 2009, the imaginary nation of Viloxia had a population of 5,000 and real GDP of 500,000. In 2010 it had a population of 5,100 and real GDP of 520,200. During 2009 real GDP in Viloxia grew by

Correct AnswerverifiedShow Answer

Educated people may generate ideas that increase production. These ideas

Correct AnswerverifiedShow Answer

Increases in both human capital per worker and physical capital per worker increase productivity.

Correct AnswerverifiedShow Answer

Which of the following would, by itself, reveal the most about a country's standard of living?

Correct AnswerverifiedShow Answer

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and standard of living mean. Make a list of things that determine labor productivity.

Correct AnswerverifiedThe standard of living is a measure of h...View AnswerShow Answer

Country A and country B are the same except country A currently has a lower level of capital. Assuming diminishing returns, if both countries increase their capital by 100 units and other factors that determine output are unchanged, then

Correct AnswerverifiedShow Answer

Mary looks over reports on four of her workers. Jack made 25 baskets in 5 hours. Walter made 36 baskets in 6 hours. Rudy made 40 baskets in 10 hours. Sam made 22 baskets in four hours. Who has the greatest productivity?

Correct AnswerverifiedShow Answer

A country's human capital increases

Correct AnswerverifiedShow Answer

Which of the following is a determinant of productivity?

Correct AnswerverifiedShow Answer

If an economy with constant returns to scale were to double its physical capital stock, its available natural resources, and its human capital, but leave the size of the labor force the same,

Correct AnswerverifiedShow Answer

If a production function has constant returns to scale, output can be doubled if

Correct AnswerverifiedShow Answer

Inward-oriented policies

Correct AnswerverifiedShow Answer

A country experiencing a growth rate of 8% per year can go from being one of the poorest to one of the richest in how many generations?

Correct AnswerverifiedShow Answer

If a good has become more scarce, then we know for sure that

Correct AnswerverifiedShow Answer

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In addition to investment in physical an...
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The standard of living is a measure of h...
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