Question 1

The average citizen of India in 2008 had

Accepted Answer

A)   less real income than the typical resident of Canda in 1870.
B)   less real income than the typical resident of the United Kingdom in 1870.
C)   higher real income than a resident of Japan in 2008.
D)   higher real income than a resident of China in 2008.

Question 2

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment, poor countries tend to grow at a faster rate than rich countries.

Accepted Answer

A) True 
 B)False

Question 3

The level of real GDP person

Accepted Answer

A)   differs widely across countries, but the growth rate of real GDP per person is similar across countries.
B)   is very similar across countries, but the growth rate of real GDP per person differs widely across countries.
C)   and the growth rate of real GDP per person are similar across countries.
D)   and the growth rate of real GDP per person vary widely across countries.

Question 4

Phoenix furniture uses 10 workers, each working eight hours, to produce 80 rocking chairs. What is Phoenix's productivity?

Accepted Answer

A)   80 rocking chairs
B)   10 rocking chairs per hour
C)   1 rocking chair per hour
D)   1 hour per rocking chair

Question 5

You and your friend work together for 4 hours to produce a total of 12 futons. What is productivity?

Accepted Answer

A)   12 futons
B)   24 futons
C)   3 futons per hour of labor
D)   1.5 futons per hour of labor

Question 6

Gramp's Potato Chips produces 1280 bags of potato chips a day. Each employee at Gramp's works 8 hours. If the company's productivity is 20 bags per hour, how many people does Gramp's employ?

Accepted Answer

A)   8
B)   10
C)   80
D)   100

Question 7

If natural resources had become scarcer, then we would expect their

Accepted Answer

A)   prices to have risen more than inflation as they have.
B)   prices to have risen more than inflation, but they have not.
C)   known quantities to have fallen as they have.
D)   known quantities to have fallen but they have not.

Question 8

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.

Question 9

Other things the same, if a country raises its saving rate, then in the long run

Accepted Answer

A)   both the level and growth rate of real GDP are unchanged.
B)   the level of real GDP is higher but the growth rate of real GDP is unchanged.
C)   both the level and growth rate of real GDP are higher.
D)   None of the above are correct.

Question 10

The president of a poor country has announced that he will implement the following measures which he claims are designed to increase growth: 1. Reduce corruption in the legal system; 2. Reduce reliance on market forces because they allocate goods and services in an unfair manner; 3. Restrict investment in domestic industries by foreigners because they take some of the profits out of the country; 4. Encourage trade with neighboring countries; and 5. Increase the fraction of GDP devoted to consumption. How many of these measures will have a positive effect on growth?

Accepted Answer

A)   1
B)   2
C)   3
D)   4

Question 11

Which of the following statements is true?

Accepted Answer

A)   Productivity is calculated as hours worked divided by output produced.
B)   Americans have a higher standard of living than Indonesians because American workers are more productive than Indonesian workers.
C)   Both A and B are correct.
D)   None of the above are correct.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

In recent decades, average income in some East Asian countries, such as South Korea, Singapore, and Taiwan, has risen about

Accepted Answer

A)   2 percent per year.
B)   4 percent per year.
C)   7 percent per year.
D)   10 percent per year.

Question 14

Figure 7-1. 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 7-1. Choose a point anywhere on the curve and call it point A. If the economy is at point A in 2011, then it will definitely remain at point A in 2012 if, between 2011 and 2012,

Accepted Answer

A)   the quantity of physical capital remains constant; the number of workers doubles; and human capital, natural resources, and technology all double as well.
B)   the quantity of physical capital doubles; human capital, natural resources, and technology all double as well; and the number of workers remains constant.
C)   the quantity of physical capital doubles; the number of workers doubles; and human capital, natural resources, and technology all double as well.
D)   the quantity of physical capital doubles; the number of workers doubles; and human capital, natural resources, and technology remain constant.

Question 15

Over the past century in the United States, real GDP per person has grown, on average, by about

Accepted Answer

A)   1 percent per year.
B)   2 percent per year.
C)   3 percent per year.
D)   5 percent per year.

Question 16

Both the standard of living and the growth of real GDP per person vary widely across countries.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is correct?

Accepted Answer

A)   Although levels of real GDP per person vary substantially from country to country, the growth rate of real GDP per person is similar across countries.
B)   Productivity is not closely linked to government policies.
C)   The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress.
D)   Productivity may be measured by the growth rate of real GDP per person.

Question 18

Over the period 1870-2008, the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Accepted Answer

A) True 
 B)False

Question 19

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

Accepted Answer

A)   fall to less than one-half of its former value.
B)   fall, but it would still be greater than one-half of its former value.
C)   stay the same.
D)   rise but less than double.

Question 20

If your company opens and operates a branch in a foreign country, your company engages in foreign direct investment.

Accepted Answer

A) True 
 B)False

Exam 7: Production and Growth

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

If your company opens and operates a branch in a foreign country, your company engages in foreign direct investment.

Correct Answer
verified

Gramp's Potato Chips produces 1280 bags of potato chips a day. Each employee at Gramp's works 8 hours. If the company's productivity is 20 bags per hour, how many people does Gramp's employ?

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

The average citizen of India in 2008 had

Correct Answer
verified

Other things the same, if a country raises its saving rate, then in the long run

Correct Answer
verified

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment, poor countries tend to grow at a faster rate than rich countries.

Correct Answer
verified

The level of real GDP person

Correct Answer
verified

Over the past century in the United States, real GDP per person has grown, on average, by about

Correct Answer
verified

Phoenix furniture uses 10 workers, each working eight hours, to produce 80 rocking chairs. What is Phoenix's productivity?

Correct Answer
verified

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

Correct Answer
verified

Correct Answer
verified

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 Answer
verified

Both the standard of living and the growth of real GDP per person vary widely across countries.

Correct Answer
verified

Over the period 1870-2008, the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Correct Answer
verified

If natural resources had become scarcer, then we would expect their

Correct Answer
verified

You and your friend work together for 4 hours to produce a total of 12 futons. What is productivity?

Correct Answer
verified

In recent decades, average income in some East Asian countries, such as South Korea, Singapore, and Taiwan, has risen about

Correct Answer
verified

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

Correct Answer
verified

Exam 7: Production and Growth

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

If your company opens and operates a branch in a foreign country, your company engages in foreign direct investment.

Correct AnswerverifiedShow Answer

Gramp's Potato Chips produces 1280 bags of potato chips a day. Each employee at Gramp's works 8 hours. If the company's productivity is 20 bags per hour, how many people does Gramp's employ?

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

The average citizen of India in 2008 had

Correct AnswerverifiedShow Answer

Other things the same, if a country raises its saving rate, then in the long run

Correct AnswerverifiedShow Answer

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment, poor countries tend to grow at a faster rate than rich countries.

Correct AnswerverifiedShow Answer

The level of real GDP person

Correct AnswerverifiedShow Answer

Over the past century in the United States, real GDP per person has grown, on average, by about

Correct AnswerverifiedShow Answer

Phoenix furniture uses 10 workers, each working eight hours, to produce 80 rocking chairs. What is Phoenix's productivity?

Correct AnswerverifiedShow Answer

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

Correct AnswerverifiedShow Answer

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

Both the standard of living and the growth of real GDP per person vary widely across countries.

Correct AnswerverifiedShow Answer

Over the period 1870-2008, the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Correct AnswerverifiedShow Answer

If natural resources had become scarcer, then we would expect their

Correct AnswerverifiedShow Answer

You and your friend work together for 4 hours to produce a total of 12 futons. What is productivity?

Correct AnswerverifiedShow Answer

In recent decades, average income in some East Asian countries, such as South Korea, Singapore, and Taiwan, has risen about

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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