Question 1

Strike Out Bowling Balls produces 800 bowling balls per day using 2 workers who each work 8 hours per day. What is Strike Out's productivity?

Accepted Answer

A)  800 bowling balls
B)  100 bowling balls per hour
C)  50 bowling balls per hour
D)  None of the above is correct.E) None of the above
F) All of the above

Question 2

Outward-oriented policies

Accepted Answer

A)  allow countries to take advantage of gains from trade.
B)  have generally led to high growth for the countries that pursued them.
C)  receive widespread support from economists.
D)  All of the above are correct.E) B) and C)
F) All of the above

Question 3

Ralph is a plumber. Which of the following are included in his physical 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) B) and D)

Question 4

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

Question 5

A rapid increase in the number of workers, other things the same, is likely in the short term to

Accepted Answer

A)  raise real GDP per person, but decrease real GDP.
B)  decrease both real GDP and real GDP per person.
C)  raise both real GDP and real GDP per person.
D)  raise real GDP, but decrease real GDP per person.E) A) and B)
F) A) and C)

Question 6

Which of the following countries had the highest growth rate over the last 100 or so years?

Accepted Answer

A)  Brazil
B)  Germany
C)  Canada
D)  United StatesE) B) and C)
F) None of the above

Question 7

Investment from abroad

Accepted Answer

A)  is a way for poor countries to learn the state-of-the-art technologies developed and used in richer countries.
B)  is viewed by economists as a way to increase growth.
C)  often requires removing restrictions that governments have imposed on foreign ownership of domestic capital.
D)  All of the above are correct.E) A) and C)
F) All of the above

Question 8

Over the past 100 years, U.S. real GDP per person has doubled about every 35 years. If it continues to double every 35 years, then in 100 years U.S. real GDP per person will be about

Accepted Answer

A)  4 times higher than it is now.
B)  8 times higher than it is now.
C)  12 times higher than it is now.
D)  16 times higher than it is now.E) B) and C)
F) All of the above

Question 9

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Accepted Answer

A)  and physical capital per worker will increase.
B)  and physical capital per worker will decrease.
C)  will increase but physical capital per worker will decrease.
D)  will decrease but physical capital per worker will increase.E) A) and B)
F) None of the above

Question 10

Historically, the market prices of most natural resources (adjusted for inflation)  have

Accepted Answer

A)  increased.
B)  remained stable.
C)  remained stable or decreased.
D)  decreased.E) A) and B)
F) B) and C)

Question 11

Alexis and Tara both mine salt. Alexis mines 400 pounds in 40 hours. Tara mines 300 pounds in 20 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) A) and C)
F) A) and B)

Question 12

Country A has a population of 1,000, of whom 700 worked an average of 8 hours a day and had a productivity of 2.5. Country B has a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. The country with the higher real GDP was

Accepted Answer

A)  country A, and the country with higher real GDP per person was country A.
B)  country A, and the country with higher real GDP per person was country B.
C)  country B, and the country with higher real GDP per person was country A.
D)  country B, and the country with higher real GDP per person was country B.E) A) and C)
F) A) and B)

Question 13

Inward-oriented policies

Accepted Answer

A)  include imposing tariffs and other trade restrictions.
B)  have generally increased productivity and growth in the countries that pursued them.
C)  promote the production of goods and services that the country produces most efficiently.
D)  All of the above are correct.E) B) and C)
F) A) and C)

Question 14

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 15

In 2009 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2010 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) B) and C)
F) A) and D)

Question 16

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

Accepted Answer

A)  productivity is greater than Will's.
B)  output is greater than Will's.
C)  standard of living is higher than Will's.
D)  All of the above are correct.E) A) and B)
F) C) and D)

Question 17

If they could increase their growth rates slightly, countries with low income would catch up with rich countries in about ten years.

Accepted Answer

A) True 
 B)False

Question 18

Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India.

Accepted Answer

A) True 
 B)False

Question 19

A country experiencing a growth rate of 8% per year can go from being one of the poorest to one of the richest in how many generations?

Accepted Answer

A)  one
B)  two
C)  three
D)  fourE) A) and D)
F) None of the above

Question 20

In a market economy, we know that a resource has become scarcer when

Accepted Answer

A)  its price rises relative to other prices.
B)  it is non-renewable and some of it is used.
C)  people search for substitutes.
D)  All of the above are correct.E) A) and D)
F) A) and C)

Exam 12: Production and Growth

Investment from abroad

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A country experiencing a growth rate of 8% per year can go from being one of the poorest to one of the richest in how many generations?

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Historically, the market prices of most natural resources (adjusted for inflation) have

Correct AnswerverifiedShow Answer

Inward-oriented policies

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

Correct AnswerverifiedShow Answer

In 2009 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8 hours a day. In 2010 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

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

Correct AnswerverifiedShow Answer

Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India.

Correct AnswerverifiedShow Answer

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

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If they could increase their growth rates slightly, countries with low income would catch up with rich countries in about ten years.

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

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Outward-oriented policies

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

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Country A has a population of 1,000, of whom 700 worked an average of 8 hours a day and had a productivity of 2.5. Country B has a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. The country with the higher real GDP was

Correct AnswerverifiedShow Answer

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Correct AnswerverifiedShow Answer

In a market economy, we know that a resource has become scarcer when

Correct AnswerverifiedShow Answer

Strike Out Bowling Balls produces 800 bowling balls per day using 2 workers who each work 8 hours per day. What is Strike Out's productivity?

Correct AnswerverifiedShow Answer

A rapid increase in the number of workers, other things the same, is likely in the short term to

Correct AnswerverifiedShow Answer

Over the past 100 years, U.S. real GDP per person has doubled about every 35 years. If it continues to double every 35 years, then in 100 years U.S. real GDP per person will be about

Correct AnswerverifiedShow Answer

Which of the following countries had the highest growth rate over the last 100 or so years?

Correct AnswerverifiedShow Answer

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