Question 1

Which of the following is an example of a renewable natural resource?

Accepted Answer

A)  the knowledge possessed by scientists
B)  carpenters' labor services
C)  lumber
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 2

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 3

Suppose a person receives an education in her home country. Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

Accepted Answer

A)  externalities and brain drain
B)  externalities but not brain drain
C)  brain drain but not externalities
D)  neither externalities nor brain drainE) All of the above
F) B) and C)

Question 4

Which of the following statements is true?

Accepted Answer

A)  The quantity of natural resources per worker can influence productivity.
B)  Technological knowledge and human capital are closely related.
C)  Over long periods of time, the prices of most natural resources are stable or falling, relative to other prices.
D)  All of the above are correct.E) None of the above
F) A) and B)

Question 5

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Accepted Answer

A) True 
 B)False

Question 6

Government corruption

Accepted Answer

A)  impedes the coordinating power of markets and discourages investment.
B)  impedes the coordinating power of markets but does not discourage investment.
C)  does not impede the coordinating power of markets, but does discourage investment.
D)  can neither impede the coordinating power of markets nor discourage investment.E) C) and D)
F) None of the above

Question 7

Other things the same, an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Accepted Answer

A) True 
 B)False

Question 8

If an economy with constant returns to scale were to double its physical capital stock, its available natural resources, and its human capital, but leave the size of the labor force the same,

Accepted Answer

A)  its output would stay the same and so would its productivity.
B)  its output and productivity would increase, but less than double.
C)  its output and productivity would increase by more than double.
D)  None of the above is correct.E) A) and B)
F) All of the above

Question 9

In the production function  
, 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 10

An increase in the saving rate would, other things the same,

Accepted Answer

A)  increase growth more for a poor country than for a rich country, and raise growth permanently.
B)  increase growth more for a poor country than for a rich country, but raise growth temporarily.
C)  increase growth more for a rich country than for a poor country, and raise growth permanently.
D)  increase growth more for a rich country than for a poor country, but raise growth temporarily.E) All of the above
F) A) and D)

Question 11

Your company discovers a better way to produce mousetraps, but your better methods are not apparent from the mousetraps themselves. Your knowledge of how to more efficiently produce mousetraps is

Accepted Answer

A)  common technological knowledge.
B)  common, but not technological, knowledge.
C)  proprietary technological knowledge.
D)  proprietary, but not technological, knowledge.E) None of the above
F) B) and C)

Question 12

Productivity is the

Accepted Answer

A)  key determinant of living standards, and growth in productivity is the key determinant of growth in living standards.
B)  key determinant of living standards, but growth in productivity is not the key determinant of growth in living standards.
C)  not the key determinant of living standards, but growth in productivity is the key determinant of growth in living standards.
D)  not the key determinant of living standards, and growth in productivity is not the key determinant of growth in living standards.E) B) and D)
F) A) and D)

Question 13

Ralph is a plumber. Which of the following are included in his human 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) A) and B)
F) A) and C)

Question 14

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

Accepted Answer

H represen...

Question 15

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1993 to 2012.

Accepted Answer

Real GDP per person in 1993 wa...

Question 16

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

Question 17

Assuming constant returns to scale, if two countries are otherwise the same, the one that is poorer grows faster.

Accepted Answer

A) True 
 B)False

Question 18

Why does a nation's standard of living depend on property rights?

Accepted Answer

Property rights are an important prerequ...

Question 19

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) All of the above
F) B) and C)

Question 20

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) A) and D)

Exam 25: Production and Growth

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Correct AnswerverifiedShow Answer

Suppose a person receives an education in her home country. Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

Correct AnswerverifiedShow Answer

If there are diminishing returns to capital, then

Correct AnswerverifiedShow Answer

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1993 to 2012.

Correct AnswerverifiedReal GDP per person in 1993 wa...View AnswerShow Answer

Why does a nation's standard of living depend on property rights?

Correct AnswerverifiedProperty rights are an important prerequ...View AnswerShow Answer

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

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

An increase in the saving rate would, other things the same,

Correct AnswerverifiedShow Answer

Productivity is the

Correct AnswerverifiedShow Answer

If an economy with constant returns to scale were to double its physical capital stock, its available natural resources, and its human capital, but leave the size of the labor force the same,

Correct AnswerverifiedShow Answer

In the production function , 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

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

Correct AnswerverifiedH represen...View AnswerShow Answer

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

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Which of the following statements is true?

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Your company discovers a better way to produce mousetraps, but your better methods are not apparent from the mousetraps themselves. Your knowledge of how to more efficiently produce mousetraps is

Correct AnswerverifiedShow Answer

Other things the same, an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Correct AnswerverifiedShow Answer

Government corruption

Correct AnswerverifiedShow Answer

Which of the following is an example of a renewable natural resource?

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

Assuming constant returns to scale, if two countries are otherwise the same, the one that is poorer grows faster.

Correct AnswerverifiedShow Answer

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Real GDP per person in 1993 wa...
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Property rights are an important prerequ...
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N represen...
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H represen...
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Countries with natural seaport...
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Correct Answer
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