Question 1

Over the past century in the United States, real GDP per person has grown, on average, by about

Accepted Answer

A)   1 percent per year.
B)   2 percent per year.
C)   3 percent per year.
D)   5 percent per year.E) B) and C)
F) A) and C)

Question 2

Ralph is a plumber. Which of the following are included in his human capital?

Accepted Answer

A)   the knowledge he learned on the job, and the tools he uses
B)   the knowledge he learned on the job, but not the tools he uses
C)   the tools he uses, but not the knowledge he learned on the job
D)   neither the knowledge he learned on the job nor the tools he usesE) None of the above
F) A) and B)

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Suppose a country increases trade restrictions. This country would be pursing an

Accepted Answer

A)   inward policy, which most economists believe has beneficial effects on the economy.
B)   inward policy, which most economists believe has adverse effects on the economy.
C)   outward policy, which most economists believe has beneficial effects on the economy.
D)   outward policy, which most economists believe has adverse effects on the economy.E) C) and D)
F) B) and D)

Question 5

Apple founder Steve Jobs received patents on many of his ideas. While the patents existed, his ideas were

Accepted Answer

A)   public goods and proprietary knowledge.
B)   public goods but not proprietary knowledge.
C)   private goods and proprietary knowledge.
D)   private goods but not proprietary knowledge.E) A) and D)
F) A) and C)

Question 6

Currently a country has real GDP per person of 500. Raising capital per worker by one would increase output per worker by 4. Other things the same, which of the following long-run combinations are consistent with the effects of this country increasing its saving rate?

Accepted Answer

A)   real GDP per person is 520 and raising capital per worker by one would increase output per worker by 3
B)   real GDP per person is 520 and raising capital per worker by one would increase output per worker by 5
C)   real GDP per person is 480 and raising capital per worker by one would increase output per worker by 3
D)   real GDP per person is 480 and raising capital per worker by one would increase output per worker by 5E) None of the above
F) A) and B)

Question 7

Waldo works eight hours and produces 7 units of goods per hour. Emerson works six hours and produces 10 units of goods per hour.

Accepted Answer

A)   Waldo's productivity and output are greater than Emerson's.
B)   Waldo's productivity is greater than Emerson's but his output is less.
C)   Emerson's productivity and output are greater than Waldo's.
D)   Emerson's productivity is greater than Waldo's but his output is less.E) C) and D)
F) B) and C)

Question 8

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

Question 9

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology. Yet many economists believe that patents generate growth. Explain why.

Accepted Answer

Once someone comes up with an idea it is...

Question 10

Table 25-1.
Athens and Troy both produce only ribs and baked potatoes.
 
-Refer to Table 25-1. Which of the following is correct?

Accepted Answer

A)   Both productivity and the standard of living are higher in Athens than Troy.
B)   Productivity is higher in Athens while the standard of living is higher in Troy
C)   Productivity is higher in Troy while the standard of living is higher in Athens.
D)   Both productivity and the standard of living are higher in Troy than Athens.E) B) and D)
F) B) and C)

Question 11

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) A) and C)

Question 12

In which of the following countries did real GDP per person fall by about 38% from 1991 to 2011?

Accepted Answer

A)   India
B)   Singapore
C)   Zimbabwe
D)   None of the above are correct.E) A) and B)
F) A) and D)

Question 13

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

A)   2 percent.
B)   5 percent.
C)   10 percent.
D)   15 percent.E) All of the above
F) A) and B)

Question 14

Which of the following is not correct?

Accepted Answer

A)   Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life.
B)   With a growth rate of about 2 percent per year, average income per person doubles about every 60 years.
C)   The ranking of countries by average income changes substantially over time.
D)   In some countries real income per person has changed very little over many years.E) A) and D)
F) A) and B)

Question 15

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

A)   both the demand for the resource and the supply of the resource have increased.
B)   both the demand for the resource and the supply of the resource have decreased.
C)   the demand for the resource has increased and the supply has decreased.
D)   the demand for the resource has decreased and the supply has increased.E) C) and D)
F) B) and C)

Question 16

Thomas Malthus's predictions turned out to be wrong due to

Accepted Answer

A)   technological advances such as those during the Industrial Revolution.
B)   smaller populations now than in the time of Malthus.
C)   the effects of brain-drain.
D)   unlimited natural resources.E) A) and B)
F) A) and C)

Question 17

Which of the following is an example of the "brain drain?"

Accepted Answer

A)   A country's most highly educated workers emigrate to rich countries.
B)   A country has such a poor educational system that human capital falls over time.
C)   The population of a country grows so fast that the educational system can't keep up.
D)   A country steals patented technology from another country.E) A) and B)
F) A) and C)

Question 18

An organization that tries to encourage the flow of investment to poor countries is the

Accepted Answer

A)   World Bank.
B)   Organization of Less Developed Countries.
C)   Alliance of Developing Countries.
D)   International Development Alliance.E) C) and D)
F) B) and D)

Question 19

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Accepted Answer

A)   higher productivity, and a higher growth rate of real GDP.
B)   higher productivity, but not a higher growth rate of real GDP.
C)   the same productivity and growth of real GDP it began with.
D)   None of the above is correct.E) B) and C)
F) A) and D)

Question 20

Two countries with the same saving rates must have the same growth rate of real GDP per person.

Accepted Answer

A) True 
 B)False

Exam 17: Production and Growth

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Over the past century in the United States, real GDP per person has grown, on average, by about

Correct AnswerverifiedShow Answer

Thomas Malthus's predictions turned out to be wrong due to

Correct AnswerverifiedShow Answer

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Correct AnswerverifiedShow Answer

In which of the following countries did real GDP per person fall by about 38% from 1991 to 2011?

Correct AnswerverifiedShow 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

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

Which of the following is an example of the "brain drain?"

Correct AnswerverifiedShow Answer

In which of the following cases can we be certain that a natural resource has become scarcer?

Correct AnswerverifiedShow Answer

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology. Yet many economists believe that patents generate growth. Explain why.

Correct AnswerverifiedOnce someone comes up with an idea it is...View AnswerShow Answer

Apple founder Steve Jobs received patents on many of his ideas. While the patents existed, his ideas were

Correct AnswerverifiedShow Answer

Suppose a country increases trade restrictions. This country would be pursing an

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An organization that tries to encourage the flow of investment to poor countries is the

Correct AnswerverifiedShow Answer

Table 25-1. Athens and Troy both produce only ribs and baked potatoes. -Refer to Table 25-1. Which of the following is correct?

Correct AnswerverifiedShow Answer

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Correct AnswerverifiedShow Answer

Ralph is a plumber. Which of the following are included in his human capital?

Correct AnswerverifiedShow Answer

Waldo works eight hours and produces 7 units of goods per hour. Emerson works six hours and produces 10 units of goods per hour.

Correct AnswerverifiedShow Answer

Two countries with the same saving rates must have the same growth rate of real GDP per person.

Correct AnswerverifiedShow Answer

Currently a country has real GDP per person of 500. Raising capital per worker by one would increase output per worker by 4. Other things the same, which of the following long-run combinations are consistent with the effects of this country increasing its saving rate?

Correct AnswerverifiedShow Answer

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Once someone comes up with an idea it is...
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