Question 1

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Accepted Answer

Since bearing a child has an opportunity...

Question 2

Which of the following countries achieved higher economic growth, in part by mandating a reduction in population growth?

Accepted Answer

A)   Great Britain
B)   China
C)   Australia
D)   FranceE) C) and D)
F) B) and C)

Question 3

"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement

Accepted Answer

A)   is an assertion that production functions have the property of constant returns to scale.
B)   is consistent with the view that capital is subject to diminishing returns.
C)   is inconsistent with the view that it is easier for a country to grow fast if it starts out relatively poor.
D)   All of the above are correct.E) A) and D)
F) B) and D)

Question 4

Which of the following statements is correct?

Accepted Answer

A)   Human capital per worker is a determinant of productivity.
B)   A nation cannot be highly productive in producing goods and services without abundant quantities of natural resources.
C)   Human capital and technological knowledge are the same thing.
D)   All technological knowledge is proprietary.E) None of the above
F) All of the above

Question 5

Other things the same, a country that increases its saving rate increases

Accepted Answer

A)   its future productivity and future real GDP.
B)   neither its future productivity nor future real GDP.
C)   its future productivity, but not its future real GDP.
D)   its future real GDP, but not its future productivity.E) C) and D)
F) B) and C)

Question 6

Dilbert's Incorporated produced 6,000,000 units of software in 2010. At the start of 2011 the pointy­haired boss raised employment from 10,000 total annual hours to 14,000 annual hours and production was 7,000,000 units. These number indicate that productivity

Accepted Answer

A)   fell by about 16.7%.
B)   stayed the same.
C)   rose by about 16.7%.
D)   rose by about 40%.E) B) and D)
F) B) and C)

Question 7

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 8

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Accepted Answer

A)   represents the traditional view of the production process.
B)   is an assertion that capital is subject to diminishing returns.
C)   is made under the assumption that the quantities of human capital, natural resources, and technology are being held constant.
D)   All of the above are correct.E) C) and D)
F) All of the above

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Proprietary technology is technology that is

Accepted Answer

A)   widely used because it is easy to learn.
B)   widely used because the government subsidizes its use.
C)   not widely used because people could, but have not, taken the time to learn how to apply it.
D)   not widely used because it is known or controlled only by the company that discovered it.E) B) and D)
F) A) and D)

Question 11

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 C)
F) A) and B)

Question 12

Average income has been stagnant for many years in

Accepted Answer

A)   Western European counties.
B)   some Asian countries like South Korea and Singapore.
C)   some Sub-Saharan African countries.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 13

Accumulating capital

Accepted Answer

A)   requires that society sacrifice consumption goods in the present.
B)   allows society to consume more in the present.
C)   decreases saving rates.
D)   involves no tradeoffs.E) B) and C)
F) All of the above

Question 14

Which of the following statements is correct?

Accepted Answer

A)   Growth of productivity is the main determinant of growth in living standards.
B)   Common knowledge and proprietary technology are both important for the economy's production of goods and services.
C)   The terms capital and physical capital refer to the same thing.
D)   All of the above are correct.E) C) and D)
F) All of the above

Question 15

The level of real GDP is a good measure of economic prosperity, and the growth of real GDP is a good measure of
__________.

Accepted Answer

The answer of The level of real GDP is a...

Question 16

International data on real GDP per person gives us a sense of how standards of living vary across countries.

Accepted Answer

A) True 
 B)False

Question 17

Is physical capital a produced factor of production? Is human capital a produced factor of production?

Accepted Answer

Both physical capita...

Question 18

"Market prices give no reason to believe that natural resources are a limit to economic growth." Explain this statement.

Accepted Answer

If the world were running out of natural...

Question 19

If companies from foreign countries build and operate factories in China, then China's productivity

Accepted Answer

A)   and the wages of Chinese workers increase.
B)   increases but the wages of Chinese workers decrease.
C)   decreases but the wages of Chinese workers increase.
D)   and the wages of Chinese workers decrease.E) All of the above
F) A) and C)

Question 20

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Accepted Answer

A) True 
 B)False

Exam 7: Production and Growth

Proprietary technology is technology that is

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

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Which of the following statements is correct?

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"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement

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If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

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

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Accumulating capital

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"Market prices give no reason to believe that natural resources are a limit to economic growth." Explain this statement.

Correct AnswerverifiedIf the world were running out of natural...View AnswerShow Answer

Which of the following countries achieved higher economic growth, in part by mandating a reduction in population growth?

Correct AnswerverifiedShow Answer

Is physical capital a produced factor of production? Is human capital a produced factor of production?

Correct AnswerverifiedBoth physical capita...View AnswerShow Answer

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

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Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Correct AnswerverifiedSince bearing a child has an opportunity...View AnswerShow Answer

Average income has been stagnant for many years in

Correct AnswerverifiedShow Answer

If companies from foreign countries build and operate factories in China, then China's productivity

Correct AnswerverifiedShow Answer

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

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Dilbert's Incorporated produced 6,000,000 units of software in 2010. At the start of 2011 the pointy­haired boss raised employment from 10,000 total annual hours to 14,000 annual hours and production was 7,000,000 units. These number indicate that productivity

Correct AnswerverifiedShow Answer

The level of real GDP is a good measure of economic prosperity, and the growth of real GDP is a good measure of __________.

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Other things the same, a country that increases its saving rate increases

Correct AnswerverifiedShow Answer

International data on real GDP per person gives us a sense of how standards of living vary across countries.

Correct AnswerverifiedShow Answer

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If the world were running out of natural...
View Answer

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Both physical capita...
View Answer

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Since bearing a child has an opportunity...
View Answer

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Correct Answer
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Dilbert's Incorporated produced 6,000,000 units of software in 2010. At the start of 2011 the pointyhaired boss raised employment from 10,000 total annual hours to 14,000 annual hours and production was 7,000,000 units. These number indicate that productivity

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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