Question 1

Which of the following is correct?

Accepted Answer

A)  If a relatively poor country had grown at 3.5 percent per year for the last 100 years, it would be a relatively rich country today.
B)  International data on the history of the growth of real GDP per person shows that the rich countries get richer and the poor countries get poorer.
C)  In the United States, average income today is about four times as high as average income a century ago.
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 2

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

Question 3

All else equal,which of the following would tend to cause real GDP per person to rise?

Accepted Answer

A)  Changing policy from outward to inward oriented.
B)  Investment in human capital.
C)  In the short-term, effects of a rapid growth in the number of workers.
D)  All of the above are correct.E) C) and D)
F) A) and B)

Question 4

The average amount of goods and services produced from each hour of a worker's time is called

Accepted Answer

A)  per capita GDP
B)  per capita GNP
C)  productivity
D)  human capitalE) B) and C)
F) A) and B)

Question 5

Use the data on U.S.real GDP below to compute real GDP per person for each year.Then use these numbers to compute the percentage increase in real GDP per person from 1987 to 2005.

Accepted Answer

Real GDP per person in 1987 wa...

Question 6

Which of the following is true?

Accepted Answer

A)  Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue.Malthus argued that increasing population would outstrip agricultural production.
B)  Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.
C)  Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue.Kremer argued that increasing population would outstrip agricultural production.
D)  Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.E) None of the above
F) B) and C)

Question 7

National defense and knowledge are generally considered to be

Accepted Answer

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

Question 8

In the country of Krypton,the price of lead increased from $20 per pound to $21 per pound during a time when the overall price level increased by 5 percent.During this period,the real price of lead

Accepted Answer

A)  increased.
B)  decreased.
C)  stayed the same.
D)  might have increased, decreased or stayed the same; more information is needed to be sure.E) A) and B)
F) A) and D)

Question 9

Technological knowledge refers to

Accepted Answer

A)  human capital.
B)  available information on how to produce things.
C)  resources expended transmitting society's understanding to the labor force.
D)  All of the above are technological knowledge.E) None of the above
F) A) and B)

Question 10

After adjusting for inflation,over time the prices of most natural resources have been

Accepted Answer

A)  steady or falling, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling.
B)  steady or falling, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing.
C)  rising, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling.
D)  rising, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing.E) A) and C)
F) B) and C)

Question 11

Suppose that an American opens and operates a candy factory in Finland.This is an example of

Accepted Answer

A)  foreign direct investment.American saving is used to finance Finish investment.
B)  foreign direct investment.American saving is used to finance American investment.
C)  foreign portfolio investment.American saving is used to finance Finish investment.
D)  foreign portfolio investment.American saving is used to finance American investment.E) A) and D)
F) None of the above

Question 12

Presidents of the African countries of Mali and Burkina Faso were particularly concerned with subsidies richer countries provide for domestic production of

Accepted Answer

A)  oil.
B)  tobacco.
C)  gold.
D)  cotton.E) A) and B)
F) B) and C)

Question 13

Over the period 1960-1991,

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

Question 14

Which of the following is considered human capital?

Accepted Answer

A)  knowledge acquired from early childhood education programs
B)  knowledge acquired from grade school
C)  knowledge acquired from on-the-job training
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 15

Income in developing countries like India and Indonesia

Accepted Answer

A)  is less than 1/7th of that in developed countries like Japan and the United States.
B)  is about 1/5th of that in developed countries like Japan and the United States.
C)  is about 1/3 of that in developed countries like Japan and the United States.
D)  is about 1/2 of that in developed countries like Japan and the United States.E) A) and B)
F) All of the above

Question 16

You bake cookies.One day you double the time you spend,double the number of chocolate chips,flour,eggs,and all your other inputs,and bake twice as many cookies.Your cookie production function has

Accepted Answer

A)  decreasing returns to scale.
B)  zero returns to scale.
C)  constant returns to scale.
D)  increasing returns to scale.E) A) and B)
F) A) and C)

Question 17

Historical trends in the prices of most natural resources compared to other goods indicate that natural resources became scarcer over time.

Accepted Answer

A) True 
 B)False

Question 18

Greater scarcity of a natural resource is indicated

Accepted Answer

A)  by any increase in the price whether the price increase is less than or greater than the rate of inflation.
B)  only by any increase in the price which is less than the rate of inflation.
C)  only by any increase in the price which is greater than the rate of inflation.
D)  only by an increase in price which is caused by a decrease in supply and is greater than the rate of inflation.E) B) and C)
F) None of the above

Question 19

Investment in human capital has opportunity costs,but investment in physical capital does not.

Accepted Answer

A) True 
 B)False

Question 20

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor.What was their productivity?

Accepted Answer

A)  1/8 cabinet per hour
B)  8 hours per cabinet
C)  40 cabinets
D)  None of the above is correct.E) A) and B)
F) B) and C)

Exam 25: Production and Growth

In the country of Krypton,the price of lead increased from $20 per pound to $21 per pound during a time when the overall price level increased by 5 percent.During this period,the real price of lead

Correct AnswerverifiedShow Answer

The average amount of goods and services produced from each hour of a worker's time is called

Correct AnswerverifiedShow Answer

Presidents of the African countries of Mali and Burkina Faso were particularly concerned with subsidies richer countries provide for domestic production of

Correct AnswerverifiedShow Answer

After adjusting for inflation,over time the prices of most natural resources have been

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Educated people may generate ideas that increase production.These ideas

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

All else equal,which of the following would tend to cause real GDP per person to rise?

Correct AnswerverifiedShow Answer

Historical trends in the prices of most natural resources compared to other goods indicate that natural resources became scarcer over time.

Correct AnswerverifiedShow Answer

Technological knowledge refers to

Correct AnswerverifiedShow Answer

You bake cookies.One day you double the time you spend,double the number of chocolate chips,flour,eggs,and all your other inputs,and bake twice as many cookies.Your cookie production function has

Correct AnswerverifiedShow Answer

Investment in human capital has opportunity costs,but investment in physical capital does not.

Correct AnswerverifiedShow Answer

Use the data on U.S.real GDP below to compute real GDP per person for each year.Then use these numbers to compute the percentage increase in real GDP per person from 1987 to 2005.

Correct AnswerverifiedReal GDP per person in 1987 wa...View AnswerShow Answer

Which of the following is considered human capital?

Correct AnswerverifiedShow Answer

Suppose that an American opens and operates a candy factory in Finland.This is an example of

Correct AnswerverifiedShow Answer

Over the period 1960-1991,

Correct AnswerverifiedShow Answer

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor.What was their productivity?

Correct AnswerverifiedShow Answer

National defense and knowledge are generally considered to be

Correct AnswerverifiedShow Answer

Greater scarcity of a natural resource is indicated

Correct AnswerverifiedShow Answer

Income in developing countries like India and Indonesia

Correct AnswerverifiedShow Answer

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Real GDP per person in 1987 wa...
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