Question 1

In the production function Y = AFL,K,H,N), Y represents the quantity of output; L represents the quantity of labor; K represents the quantity of physical capital; and H represents the quantity of human capital. What does N represent?

Accepted Answer

N represen...

Question 2

Which of the following statements is correct?

Accepted Answer

A)   By definition, all natural resources are nonrenewable.
B)   Market prices give us reason to believe that natural resources are a limit to economic growth.
C)   An economy must be blessed with ample quantities of natural resources if it is to be a highly productive economy.
D)   Differences in natural resources can explain some of the differences in standards of living around the world.E) All of the above
F) A) and C)

Question 3

Last year the imaginary country of Basova had a population of 10,000, 6,000 people worked 8 hours a day, and produced a real GDP of $30,000,000. The imaginary country of Andovia had a population of 12,000, 8,000 people worked 8 hours a day, and produced a real GDP of $38,000,000. Which of the following is correct?

Accepted Answer

A)   Basova had higher productivity and higher real GDP per person.
B)   Andovia had the higher productivity and higher real GDP per person.
C)   Basova had the higher productivity while Andovia had the higher real GDP per person.
D)   Andovia had the higher productivity while Basova had the higher real GDP per person.E) A) and B)
F) A) and C)

Question 4

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education, training, and experience.

Accepted Answer

A) True 
 B)False

Question 5

Janet is a farmer. Which of the following are included in her human capital?

Accepted Answer

A)   her tractor and what she's learned from experience
B)   her tractor but not what she's learned from experience
C)   what she's learned from experience but not her tractor
D)   neither her tractor nor what she's learned from experienceE) A) and D)
F) None of the above

Question 6

Figure 25-1 
-Refer to Figure 21-1. Does the figure represent the idea that the amount of capital per worker influences the amount of output per worker, or does the figure represent the idea that the amount of output per worker influences the amount of capital per worker?

Accepted Answer

The figure represents the idea...

Question 7

Figure 25-1 
-Refer to Figure 21-1. In order for the figure to make sense, do we have to assume that capital is the only determinant of output? Briefly explain.

Accepted Answer

No, we do not have to assume that capita...

Question 8

Which of the following is correct?

Accepted Answer

A)   If developing countries limit career and educational opportunities for women, birth rates are likely to be lower.
B)   Growth rates in developed and developing countries are nearly the same.
C)   Historically, in periods where the rate of population growth was high, so was the rate of growth in world real GDP per person.
D)   None of the above is correct.E) A) and C)
F) B) and D)

Question 9

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in

Accepted Answer

A)   foreign portfolio investment.
B)   foreign financial investment.
C)   foreign direct investment.
D)   indirect foreign investment.E) B) and C)
F) A) and D)

Question 10

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

Accepted Answer

A)   The total number of hours worked rose.
B)   The total number of hours worked stayed the same.
C)   The total number of hours worked fell.
D)   Both b and c are correct.E) A) and B)
F) A) and C)

Question 11

Amy discovers a way to produce water heaters so they are less expensive and use less natural gas. Amy's discovery is

Accepted Answer

A)   physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce.
B)   physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer.
C)   technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce.
D)   technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer.E) C) and D)
F) B) and D)

Question 12

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) All of the above
F) None of the above

Question 13

A nation's standard of living is best measured by its

Accepted Answer

A)   real GDP.
B)   real GDP per person.
C)   nominal GDP.
D)   nominal GDP per person.E) A) and C)
F) B) and D)

Question 14

Which of the following is correct?

Accepted Answer

A)   Once adjustment is made for inflation, the prices of most natural resources have been about steady or falling.
B)   Technological progress has allowed us to substitute renewable resources for some nonrenewable resources.
C)   Technological progress has made once-crucial natural resources less necessary.
D)   All of the above are correct.E) A) and C)
F) B) and C)

Question 15

Last year the imaginary nation of Panglossia had real GDP of 400 billion. This year it had real GDP of 472.5 billion. Which of the following changes in population is consistent with a 5 percent growth rate of real GDP per person over the last year?

Accepted Answer

A)   The population decreased from 75 million to 72 million.
B)   The population decreased from 60 million to 50 million.
C)   The population increased from 70 million to 80 million.
D)   The population increased from 80 million to 90 million.E) A) and C)
F) B) and D)

Question 16

Which of the following are human capital and physical capital, respectively?

Accepted Answer

A)   for a brick layer: her bricks and her tools
B)   for a gas station: the pumps and the cash register
C)   for a restaurant: the chefs' knowledge about preparing food and the equipment in the kitchen
D)   for a medical office: the building and the doctors' knowledge of medicineE) None of the above
F) A) and B)

Question 17

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and the standard of living mean. Make a list of things that determine labor productivity.

Accepted Answer

The standard of living is a measure of h...

Question 18

If a production function has the property called , then doubling all inputs causes the amount of output to double as well.

Accepted Answer

constant r...

Question 19

Rapid population growth

Accepted Answer

A)   was hailed by Thomas Robert Malthus as the key to future economic growth.
B)   tends to lead to higher levels of educational attainment.
C)   is the main reason that less developed nations are poor.
D)   may depress economic prosperity by reducing the amount of capital which each worker has to work with.E) B) and C)
F) A) and D)

Question 20

Other things equal, the likelihood that a country will experience a relatively-high level of income is greater if the country

Accepted Answer

A)   pursues inward-oriented policies.
B)   has natural seaports.
C)   minimizes the role of the courts in its economy.
D)   enacts policies to encourage consumption and discourage saving.E) A) and B)
F) A) and D)

Exam 7: Production and Growth

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

Correct Answer
verified

In the production function Y = AFL,K,H,N), Y represents the quantity of output; L represents the quantity of labor; K represents the quantity of physical capital; and H represents the quantity of human capital. What does N represent?

Correct Answer
verified
N represen...
View Answer

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

Correct Answer
verified

Figure 25-1 -Refer to Figure 21-1. In order for the figure to make sense, do we have to assume that capital is the only determinant of output? Briefly explain.

Correct Answer
verified
No, we do not have to assume that capita...
View Answer

Other things equal, the likelihood that a country will experience a relatively-high level of income is greater if the country

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

If a production function has the property called , then doubling all inputs causes the amount of output to double as well.

Correct Answer
verified
constant r...
View Answer

Correct Answer
verified

A nation's standard of living is best measured by its

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education, training, and experience.

Correct Answer
verified

Which of the following are human capital and physical capital, respectively?

Correct Answer
verified

Amy discovers a way to produce water heaters so they are less expensive and use less natural gas. Amy's discovery is

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

Last year the imaginary nation of Panglossia had real GDP of 400 billion. This year it had real GDP of 472.5 billion. Which of the following changes in population is consistent with a 5 percent growth rate of real GDP per person over the last year?

Correct Answer
verified

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and the standard of living mean. Make a list of things that determine labor productivity.

Correct Answer
verified
The standard of living is a measure of h...
View Answer

Rapid population growth

Correct Answer
verified

Janet is a farmer. Which of the following are included in her human capital?

Correct Answer
verified

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in

Correct Answer
verified

Figure 25-1 -Refer to Figure 21-1. Does the figure represent the idea that the amount of capital per worker influences the amount of output per worker, or does the figure represent the idea that the amount of output per worker influences the amount of capital per worker?

Correct Answer
verified
The figure represents the idea...
View Answer

Exam 7: Production and Growth

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

Correct AnswerverifiedShow Answer

In the production function Y = AFL,K,H,N), Y represents the quantity of output; L represents the quantity of labor; K represents the quantity of physical capital; and H represents the quantity of human capital. What does N represent?

Correct AnswerverifiedN represen...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 25-1 -Refer to Figure 21-1. In order for the figure to make sense, do we have to assume that capital is the only determinant of output? Briefly explain.

Correct AnswerverifiedNo, we do not have to assume that capita...View AnswerShow Answer

Other things equal, the likelihood that a country will experience a relatively-high level of income is greater if the country

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

If a production function has the property called , then doubling all inputs causes the amount of output to double as well.

Correct Answerverifiedconstant r...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A nation's standard of living is best measured by its

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education, training, and experience.

Correct AnswerverifiedShow Answer

Which of the following are human capital and physical capital, respectively?

Correct AnswerverifiedShow Answer

Amy discovers a way to produce water heaters so they are less expensive and use less natural gas. Amy's discovery is

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Last year the imaginary nation of Panglossia had real GDP of 400 billion. This year it had real GDP of 472.5 billion. Which of the following changes in population is consistent with a 5 percent growth rate of real GDP per person over the last year?

Correct AnswerverifiedShow Answer

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and the standard of living mean. Make a list of things that determine labor productivity.

Correct AnswerverifiedThe standard of living is a measure of h...View AnswerShow Answer

Rapid population growth

Correct AnswerverifiedShow Answer

Janet is a farmer. Which of the following are included in her human capital?

Correct AnswerverifiedShow Answer

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in

Correct AnswerverifiedShow Answer

Figure 25-1 -Refer to Figure 21-1. Does the figure represent the idea that the amount of capital per worker influences the amount of output per worker, or does the figure represent the idea that the amount of output per worker influences the amount of capital per worker?

Correct AnswerverifiedThe figure represents the idea...View AnswerShow Answer

Correct Answer
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N represen...
View Answer

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No, we do not have to assume that capita...
View Answer

Correct Answer
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Correct Answer
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constant r...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The standard of living is a measure of h...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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The figure represents the idea...
View Answer