Question 1

Over the last century, U.S. real GDP per person grew at a rate of about

Accepted Answer

A)   2 percent per year, so that it is now 2 times as high as it was a century ago.
B)   2 percent per year, so that it is now 8 times as high as it was a century ago.
C)   4 percent per year, so that it is now 2 times as high as it was a century ago.
D)   4 percent per year, so that it is now 8 times as high as it was a century ago.E) A) and D)
F) B) and C)

Question 2

Country A and country B are the same except country A currently has more 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) None of the above
F) All of the above

Question 3

The slope of the production function with capital per worker on the horizontal axis and output per worker on the vertical axis

Accepted Answer

A)   is positive and gets steeper as capital per worker rises.
B)   is positive and gets flatter as capital per worker rises.
C)   is negative and gets steeper as capital per worker rises.
D)   is negative and gets flatter as capital per worker rises.E) A) and D)
F) B) and D)

Question 4

Greater scarcity of a natural resource is indicated

Accepted Answer

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

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) None of the above
F) All of the above

Question 6

In 2011 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2012 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day. Productivity at Buckeye Brewing

Accepted Answer

A)   increased by 20%.
B)   increased by 16.67%.
C)   decreased by 1.67%.
D)   decreased by 40%.E) C) and D)
F) A) and C)

Question 7

Of the following countries, which grew most slowly, in terms of real GDP per person, over about the last 120 years?

Accepted Answer

A)   Brazil
B)   Mexico
C)   China
D)   United StatesE) All of the above
F) A) and C)

Question 8

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

Accepted Answer

A)   public good.
B)   societal good.
C)   private good.
D)   normal good.E) All of the above
F) C) and D)

Question 9

Which of the following is an example of a nonrenewable resource?

Accepted Answer

A)   corn
B)   oil
C)   livestock
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 10

Suppose that real GDP grew more in Country A than in Country B last year.

Accepted Answer

A)   Country A must have a higher standard of living than country B.
B)   Country A's productivity must have grown faster than country B's.
C)   Both of the above are correct.
D)   None of the above are correct.E) A) and C)
F) None of the above

Question 11

Is coal a produced factor of production?

Accepted Answer

No. Coal is a natural resource...

Question 12

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

Accepted Answer

A)   Ethiopia
B)   the United States
C)   Canada
D)   South KoreaE) A) and D)
F) B) and D)

Question 13

Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct?

Accepted Answer

A)   Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara.
B)   Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has.
C)   Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis.
D)   Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has.E) B) and C)
F) A) and D)

Question 14

Which country has had a higher growth rate than the US over about the last 120 years?

Accepted Answer

A)   Argentina
B)   Germany
C)   the United Kingdom
D)   None of the above is correct.E) A) and C)
F) All of the above

Question 15

Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

Accepted Answer

A) True 
 B)False

Question 16

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

Question 17

According to research by Robert Fogel, what proportion of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake?

Accepted Answer

A)   10 percent
B)   20 percent
C)   30 percent
D)   40 percentE) A) and D)
F) None of the above

Question 18

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

Accepted Answer

A)   These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia.
B)   These are outward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.
C)   These are inward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia.
D)   These are inward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.E) A) and B)
F) A) and C)

Question 19

If there are diminishing returns to capital, then

Accepted Answer

A)   capital produces fewer goods as it ages.
B)   old ideas are not as useful as new ones.
C)   increases in the capital stock eventually decrease output.
D)   increases in the capital stock increase output by ever smaller amounts.E) A) and B)
F) B) and D)

Question 20

Which of the following can be measured by the level of real GDP per person?

Accepted Answer

A)   productivity and the standard of living
B)   productivity but not the standard of living
C)   the standard of living but not productivity
D)   neither the standard of living nor productivityE) All of the above
F) A) and C)

Exam 25: Production and Growth

Over the last century, U.S. real GDP per person grew at a rate of about

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Which of the following can be measured by the level of real GDP per person?

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If there are diminishing returns to capital, then

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The slope of the production function with capital per worker on the horizontal axis and output per worker on the vertical axis

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

Correct AnswerverifiedShow Answer

Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct?

Correct AnswerverifiedShow Answer

In 2011 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2012 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day. Productivity at Buckeye Brewing

Correct AnswerverifiedShow Answer

Suppose that real GDP grew more in Country A than in Country B last year.

Correct AnswerverifiedShow Answer

Greater scarcity of a natural resource is indicated

Correct AnswerverifiedShow Answer

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

Correct AnswerverifiedShow Answer

Country A and country B are the same except country A currently has more 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

According to research by Robert Fogel, what proportion of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake?

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Is coal a produced factor of production?

Correct AnswerverifiedNo. Coal is a natural resource...View AnswerShow Answer

Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

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Which of the following is an example of a nonrenewable resource?

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Of the following countries, which grew most slowly, in terms of real GDP per person, over about the last 120 years?

Correct AnswerverifiedShow Answer

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

Correct AnswerverifiedShow Answer

Which country has had a higher growth rate than the US over about the last 120 years?

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No. Coal is a natural resource...
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