Question 1

The Economic Development Minister of a country has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries. She asks you to pick the one you think most likely explains her country's low growth. Which of the following contributes to low growth?

Accepted Answer

A)   poorly enforced property rights
B)   outward-oriented trade policies
C)   policies that permit foreign investment
D)   All of the above are correct.E) B) and C)
F) A) and C)

Question 2

On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is not one of these conclusions?

Accepted Answer

A)   A relatively simple way to increase growth rates permanently is to increase a country's saving rate.
B)   Growth is generally inhibited rather than promoted by policies like protective tariffs.
C)   Well-established property rights that are enforced by fair and efficient courts are important to economic growth.
D)   Countries with few domestic natural resources still have opportunities for economic growth.E) A) and B)
F) None of the above

Question 3

In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity?

Accepted Answer

A)   1/3 laptop per hour
B)   3 hours per laptop
C)   1200 laptops
D)   400 laptopsE) B) and C)
F) All of the above

Question 4

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Accepted Answer

A) True 
 B)False

Question 5

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Accepted Answer

A)   as the economy moves toward the long run and in the long run.
B)   as the economy moves toward the long run, but not in the long run.
C)   in the long run, but not as the economy moves toward the long run.
D)   neither as the economy moves toward the long run, nor in the long run.E) A) and D)
F) A) and C)

Question 6

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 D)
F) None of the above

Question 7

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Accepted Answer

A)   Popeye's production and productivity are greater than Wimpy's.
B)   Popeye's production is greater than Wimpy's, but his productivity is less.
C)   Wimpy's production and productivity are greater than Popeye's.
D)   Wimpy's production is greater than Popeye's, but his productivity is less.E) B) and D)
F) All of the above

Question 8

Consider the nations of China, Japan, and the United States. Over the past century, which of these nations has progressed, in an economic sense, more rapidly than the other two nations?

Accepted Answer

Japan's growth rate (2.65 perc...

Question 9

Other things the same, domestic investment will increase a country's real GDP by more than foreign investment.

Accepted Answer

A) True 
 B)False

Question 10

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period?

Accepted Answer

A)   1.6 percent
B)   2.5 percent
C)   3.7 percent
D)   6 percentE) All of the above
F) None of the above

Question 11

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) B) and D)

Question 12

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

Accepted Answer

No. Japan is an example of a c...

Question 13

Both the standard of living and the growth of real GDP per person vary widely across countries.

Accepted Answer

A) True 
 B)False

Question 14

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N) .
-Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then if we know the values of A, K/L, H/L, and N/L, we also know the value of

Accepted Answer

A)   output.
B)   labor productivity.
C)   A.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 15

Educational attainment tends to be

Accepted Answer

A)   low in countries with high population growth.
B)   low in countries with low population growth.
C)   high in countries with high population growth.
D)   None of the above are true.E) B) and C)
F) All of the above

Question 16

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Accepted Answer

A)   all three countries will grow at the same rate.
B)   Country A will grow the fastest.
C)   Country B will grow the fastest.
D)   Country C will grow the fastest.E) All of the above
F) B) and C)

Question 17

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?

Accepted Answer

A)   the owner's knowledge of how to prepare vegetarian entrees
B)   the money in the owner's account at the bank from which she borrowed money
C)   the tables and chairs in the restaurant
D)   the fresh fruits, vegetables, and grains the restaurant uses to prepare its mealsE) A) and B)
F) None of the above

Question 18

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. 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 10,000 in country A and 10,000 in country B.
B)   the level of saving per person is 12,000 in country A and 15,000 in country B.
C)   Both of the above are correct.
D)   None of the above are correct.E) C) and D)
F) All of the above

Question 19

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Accepted Answer

A) True 
 B)False

Question 20

Technological knowledge

Accepted Answer

A)   is the same thing as human capital.
B)   can be discovered but it can never be kept secret.
C)   is a determinant of productivity.
D)   does not play a role in the relationship that economists call the production function.E) None of the above
F) A) and B)

Exam 25: Production and Growth

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Correct Answer
verified

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Correct Answer
verified

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

Correct Answer
verified

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Correct Answer
verified

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N) . -Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then if we know the values of A, K/L, H/L, and N/L, we also know the value of

Correct Answer
verified

Other things the same, domestic investment will increase a country's real GDP by more than foreign investment.

Correct Answer
verified

Technological knowledge

Correct Answer
verified

In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity?

Correct Answer
verified

Educational attainment tends to be

Correct Answer
verified

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?

Correct Answer
verified

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Correct Answer
verified

Consider the nations of China, Japan, and the United States. Over the past century, which of these nations has progressed, in an economic sense, more rapidly than the other two nations?

Correct Answer
verified
Japan's growth rate (2.65 perc...
View Answer

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 Answer
verified

Both the standard of living and the growth of real GDP per person vary widely across countries.

Correct Answer
verified

On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is not one of these conclusions?

Correct Answer
verified

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Correct Answer
verified

Correct Answer
verified

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period?

Correct Answer
verified

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

Correct Answer
verified
No. Japan is an example of a c...
View Answer

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Correct Answer
verified

Exam 25: Production and Growth

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Correct AnswerverifiedShow Answer

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Correct AnswerverifiedShow Answer

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N) . -Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then if we know the values of A, K/L, H/L, and N/L, we also know the value of

Correct AnswerverifiedShow Answer

Other things the same, domestic investment will increase a country's real GDP by more than foreign investment.

Correct AnswerverifiedShow Answer

Technological knowledge

Correct AnswerverifiedShow Answer

In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity?

Correct AnswerverifiedShow Answer

Educational attainment tends to be

Correct AnswerverifiedShow Answer

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?

Correct AnswerverifiedShow Answer

Real GDP per person is $10,000 in Country A, $20,000 in Country B, and $30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that

Correct AnswerverifiedShow Answer

Consider the nations of China, Japan, and the United States. Over the past century, which of these nations has progressed, in an economic sense, more rapidly than the other two nations?

Correct AnswerverifiedJapan's growth rate (2.65 perc...View AnswerShow Answer

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

Both the standard of living and the growth of real GDP per person vary widely across countries.

Correct AnswerverifiedShow Answer

On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is not one of these conclusions?

Correct AnswerverifiedShow Answer

Country A has real GDP per person of 100,000 while country B has real GDP per person of 200,000. All else constant, country A will eventually have a higher standard of living than country B if

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period?

Correct AnswerverifiedShow Answer

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

Correct AnswerverifiedNo. Japan is an example of a c...View AnswerShow Answer

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Correct AnswerverifiedShow Answer

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Japan's growth rate (2.65 perc...
View Answer

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No. Japan is an example of a c...
View Answer

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