Question 1

Adam and Doug both build birdhouses. Adam works 30 hours a week and produces 15 bird houses. Doug works 20 hours a week and produces 12 bird houses. Which of the following is correct?

Accepted Answer

A)   Adam's production and productivity are higher than Doug's.
B)   Adam's production is higher than Doug's, but Doug's productivity is higher than Adam's.
C)   Doug's production is higher than Adam's, but Adam's productivity is higher than Doug's.
D)   Doug's production and productivity are higher than Adam's.E) B) and C)
F) A) and D)

Question 2

Which of the following is generally an opportunity cost of investment in human capital?

Accepted Answer

A)   future job security
B)   forgone present wages
C)   increased earning potential
D)   All of the above are correct.E) A) and D)
F) B) and D)

Question 3

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 4

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 C)
F) C) and D)

Question 5

You sell cupcakes. One day you double the time you spend and double all your inputs, and make twice as many cupcakes. Your cupcake 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) None of the above

Question 6

Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of 16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About what was the growth rate of real GDP per person between last year and this year?

Accepted Answer

A)   -5.3 percent
B)   -5 percent
C)   5 percent
D)   5.3 percentE) C) and D)
F) A) and B)

Question 7

Your company discovers a better way to produce mousetraps, but your better methods are not apparent from the mousetraps themselves. Your knowledge of how to more efficiently produce mousetraps is

Accepted Answer

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

Question 8

If over a short time a large number of teenagers become old enough to find employment and a much smaller number of people retire, then productivity

Accepted Answer

A)   and real GDP per person rise.
B)   rises but real GDP per person falls.
C)   falls but real GDP per person rises.
D)   and real GDP per person fall.E) A) and C)
F) C) and D)

Question 9

Electronics firms may be able to get patents on their ideas. Doing so makes their ideas

Accepted Answer

A)   private goods rather than public goods. This gives people more incentive to engage in research.
B)   private goods rather than public goods. This gives people less incentive to engage in research.
C)   public goods rather than private goods. This gives people more incentive to engage in research.
D)   public goods rather than private goods. This gives people more incentive to engage in private research.E) None of the above
F) A) and B)

Question 10

Which of the following is considered human capital? Knowledge acquired from

Accepted Answer

A)   early childhood education programs
B)   job training
C)   on-the-job experience
D)   All of the above are correct.E) None of the above
F) B) and D)

Question 11

Scenario 25-1. An economy's production form takes the form Y = AFL, 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) B) and C)
F) None of the above B

Question 12

Each day Sue works 8 hours and produces 7 units of goods and services. Mary works 10 hours each day and produces 10 units of goods and services. It follows that

Accepted Answer

A)   Sue's productivity is higher than Mary's.
B)   Mary's productivity is higher than Sue's.
C)   Sue's income per hour will be higher than Mary's.
D)   Sue's income per day will be higher than Mary's.E) C) and D)
F) B) and D)

Question 13

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) A) and C) A

Question 14

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

Question 15

Consider three imaginary countries. In Aziria, saving amounts to $3,000 and consumption amounts to $7,000; in Graniva, saving amounts to $2,000 and consumption amounts to $8,000; and in Tanistan, saving amounts to $4,500 and consumption amounts to $10,500. The saving rate is

Accepted Answer

A)   higher in Aziria than in Tanistan, and it is higher in Tanistan than in Graniva.
B)   higher in Graniva than in Tanistan, and it is higher in Tanistan than in Aziria.
C)   higher in Tanistan than in Graniva, and it is the same in Graniva and Aziria.
D)   higher in Aziria than in Graniva, and it is the same in Aziria and Tanistan.E) A) and B)
F) All of the above

Question 16

If a country made it easier for people to establish and prove the ownership of their property, real GDP per person would likely rise.

Accepted Answer

A) True 
 B)False

Question 17

Economists generally believe that policies such as reducing barriers to trade are likely to foster economic growth.

Accepted Answer

A) True 
 B)False

Question 18

Suppose Turkey increases its saving rate. In the long run

Accepted Answer

A)   the growth rates of productivity and real GDP per person increase.
B)   productivity and real GDP per person increase.
C)   the growth rate of productivity increases, and real GDP per person increases.
D)   productivity increases, and the growth rate of real GDP per person increases.E) B) and C)
F) A) and D)

Question 19

Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?

Accepted Answer

A)   Canada and China
B)   China and India
C)   Germany and India
D)   Germany and PakistanE) None of the above
F) C) and D)

Question 20

Investment in

Accepted Answer

A)   physical capital, unlike investment in human capital, has an opportunity cost.
B)   physical capital, like investment in human capital, has an opportunity cost.
C)   human capital is particularly attractive because it involves no externalities.
D)   human capital has been shown to be relatively unimportant, relative to investment in physical capital, for a country's long­run economic success.E) C) and D)
F) All of the above

Exam 12: Production and Growth

Adam and Doug both build birdhouses. Adam works 30 hours a week and produces 15 bird houses. Doug works 20 hours a week and produces 12 bird houses. Which of the following is correct?

Correct AnswerverifiedShow Answer

Which of the following is generally an opportunity cost of investment in human capital?

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

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

Correct AnswerverifiedShow Answer

You sell cupcakes. One day you double the time you spend and double all your inputs, and make twice as many cupcakes. Your cupcake production function has

Correct AnswerverifiedShow Answer

Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of 16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About what was the growth rate of real GDP per person between last year and this year?

Correct AnswerverifiedShow Answer

Your company discovers a better way to produce mousetraps, but your better methods are not apparent from the mousetraps themselves. Your knowledge of how to more efficiently produce mousetraps is

Correct AnswerverifiedShow Answer

If over a short time a large number of teenagers become old enough to find employment and a much smaller number of people retire, then productivity

Correct AnswerverifiedShow Answer

Electronics firms may be able to get patents on their ideas. Doing so makes their ideas

Correct AnswerverifiedShow Answer

Which of the following is considered human capital? Knowledge acquired from

Correct AnswerverifiedShow Answer

Scenario 25-1. An economy's production form takes the form Y = AFL, 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 AnswerverifiedB

Each day Sue works 8 hours and produces 7 units of goods and services. Mary works 10 hours each day and produces 10 units of goods and services. It follows that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA

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

Correct AnswerverifiedC

Consider three imaginary countries. In Aziria, saving amounts to $3,000 and consumption amounts to $7,000; in Graniva, saving amounts to $2,000 and consumption amounts to $8,000; and in Tanistan, saving amounts to $4,500 and consumption amounts to $10,500. The saving rate is

Correct AnswerverifiedShow Answer

If a country made it easier for people to establish and prove the ownership of their property, real GDP per person would likely rise.

Correct AnswerverifiedShow Answer

Economists generally believe that policies such as reducing barriers to trade are likely to foster economic growth.

Correct AnswerverifiedShow Answer

Suppose Turkey increases its saving rate. In the long run

Correct AnswerverifiedShow Answer

Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?

Correct AnswerverifiedShow Answer

Investment in

Correct AnswerverifiedShow Answer

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B

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A

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C

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