Question 1

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Accepted Answer

A)   human capital.
B)   physical capital.
C)   natural resources.
D)   technological knowledge.E) A) and B)
F) A) and C)

Question 2

Country A experienced a growth rate of real GDP per person of 0.5 percent per year throughout the 1900's. In view of other countries' experiences, country A's growth was

Accepted Answer

A)   exceptionally high.
B)   moderately high.
C)   moderately low.
D)   exceptionally low.E) A) and D)
F) All of the above

Question 3

Proprietary technology is knowledge that is

Accepted Answer

A)   known but no longer used much.
B)   known, but only recently discovered.
C)   known mostly by only those in a certain profession.
D)   known only by the company that discovered it.E) B) and D)
F) None of the above

Question 4

The same size decrease in the amount of capital stock per worker will cause output per worker to fall by more in a country with a relatively high level of capital per worker than in a country with a relatively low level of capital per worker.

Accepted Answer

A) True 
 B)False

Question 5

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Accepted Answer

A) True 
 B)False

Question 6

The equipment and structures available to produce goods and services are called

Accepted Answer

A)   physical capital.
B)   human capital.
C)   the production function.
D)   technology.E) B) and C)
F) C) and D)

Question 7

In what sense is it likely that geography has an effect on a country's rate of economic growth?

Accepted Answer

Countries with natural seaport...

Question 8

What do we mean when we say that some technological knowledge is not proprietary?

Accepted Answer

Technological knowledge is not...

Question 9

Which of the following lists contains, in this order, natural resources, physical capital, and human capital?

Accepted Answer

A)   For a shoe factory: leather, hand tools, the managers' knowledge of shoe making.
B)   For a steel mill: the blast furnaces, iron ore, the workers.
C)   For an airline: oil used to make jet fuel, the pilots' knowledge of flying, jets.
D)   None of the above is correct.E) B) and C)
F) C) and D)

Question 10

Figure 25-1.
On the horizontal axis, K/L represents capital K)  per worker L) . On the vertical axis, Y/L represents output Y)  per worker L) . 
-Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of

Accepted Answer

A)   increasing returns to capital.
B)   increasing returns to labor.
C)   diminishing returns to capital.
D)   diminishing returns to labor.E) A) and D)
F) B) and C)

Question 11

A nation's standard of living is determined by

Accepted Answer

A)   the percentage of its GDP that is accounted for by government purchases.
B)   the quantity of natural resources with which it is endowed.
C)   the productivity of its workers.
D)   factors and events that are beyond the nation's control.E) A) and B)
F) A) and C)

Question 12

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Accepted Answer

A)   reduce real GDP per person and productivity.
B)   reduce real GDP per person but not productivity.
C)   reduce productivity but not real GDP per person.
D)   None of the above is correct.E) B) and D)
F) B) and C)

Question 13

If a Japanese company opens a new factory in South Korea, it makes

Accepted Answer

A)   foreign direct investment. The factory will make a bigger impact on South Korea's GDP than on its GNP.
B)   foreign direct investment. The factory will make a bigger impact on South Korea's GNP than on its GDP.
C)   foreign portfolio investment. The factory will make a bigger impact on South Korea's GDP than on its GNP.
D)   foreign portfolio investment. The factory will make a bigger impact on South Korea's GNP than on its GDP.E) All of the above
F) None of the above

Question 14

Which of the following statements is correct? In 2010,

Accepted Answer

A)   real income per person in the U.S. was about 6 times that in China.
B)   real income per person in China was more than 2 times that in India.
C)   the typical resident of India had less real income than the typical resident of England in 1870.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 15

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

Question 16

When a country eliminates tariffs and other trade restrictions, intending to promote economic growth, it is pursuing_______-oriented policies.

Accepted Answer

The answer of When a country eliminates tariffs and other...

Question 17

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) A) and D)
F) All of the above

Question 18

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 it can be rewritten as

Accepted Answer

A)   Y/L = AF1, K/L, H/L, N/L) 
B)   Y/L = AFL, 1, H/L, N/L) 
C)   Y/L = AFL, K/L, 1, N/L) 
D)   Y/L = AFL, K/L, H/L, 1) E) A) and C)
F) B) and C)

Question 19

Investment in human capital has opportunity costs, but investment in physical capital does not.

Accepted Answer

A) True 
 B)False

Question 20

In what sense is capital accumulation costly to a society?

Accepted Answer

Capital accumulation requires ...

Exam 17: Production and Growth

Outward-oriented policies

Correct AnswerverifiedShow Answer

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Correct AnswerverifiedShow Answer

Which of the following statements is correct? In 2010,

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The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Correct AnswerverifiedShow Answer

If a Japanese company opens a new factory in South Korea, it makes

Correct AnswerverifiedShow Answer

When a country eliminates tariffs and other trade restrictions, intending to promote economic growth, it is pursuing_______-oriented policies.

Correct AnswerverifiedShow Answer

If there are diminishing returns to capital, then

Correct AnswerverifiedShow Answer

The same size decrease in the amount of capital stock per worker will cause output per worker to fall by more in a country with a relatively high level of capital per worker than in a country with a relatively low level of capital per worker.

Correct AnswerverifiedShow Answer

Investment in human capital has opportunity costs, but investment in physical capital does not.

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What do we mean when we say that some technological knowledge is not proprietary?

Correct AnswerverifiedTechnological knowledge is not...View AnswerShow Answer

In what sense is capital accumulation costly to a society?

Correct AnswerverifiedCapital accumulation requires ...View AnswerShow Answer

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Correct AnswerverifiedShow Answer

Proprietary technology is knowledge that is

Correct AnswerverifiedShow Answer

Figure 25-1. On the horizontal axis, K/L represents capital K) per worker L) . On the vertical axis, Y/L represents output Y) per worker L) . -Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of

Correct AnswerverifiedShow Answer

The equipment and structures available to produce goods and services are called

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 it can be rewritten as

Correct AnswerverifiedShow Answer

Country A experienced a growth rate of real GDP per person of 0.5 percent per year throughout the 1900's. In view of other countries' experiences, country A's growth was

Correct AnswerverifiedShow Answer

In what sense is it likely that geography has an effect on a country's rate of economic growth?

Correct AnswerverifiedCountries with natural seaport...View AnswerShow Answer

A nation's standard of living is determined by

Correct AnswerverifiedShow Answer

Which of the following lists contains, in this order, natural resources, physical capital, and human capital?

Correct AnswerverifiedShow Answer

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Technological knowledge is not...
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Capital accumulation requires ...
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Countries with natural seaport...
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