Question 1

In 2011, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours per day. In 2012, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per day. Productivity at Modern Electronics

Accepted Answer

A)   decreased by 4%
B)   remained constant.
C)   increased by 8.33%
D)   increased by 27.50%E) A) and D)
F) A) and C)

Question 2

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

Question 3

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

Accepted Answer

Both physical capita...

Question 4

The short-run effects of an increase in the saving rate include

Accepted Answer

A)   a higher level of productivity.
B)   a higher growth rate of productivity.
C)   a higher growth rate of income.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 5

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.E) C) and D)
F) A) and B)

Question 6

What is a production function? Write an equation for a typical production function, and explain what each of the terms represents.

Accepted Answer

A production function is a mathematical ...

Question 7

All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit?

Accepted Answer

A)   Output will rise by more than it did when the previous unit was added.
B)   Output will rise but by less than it did when the previous unit was added.
C)   Output will fall by more than it did when the previous unit was added.
D)   Output will fall but by less then it did when the previous unit was added.E) B) and D)
F) All of the above

Question 8

Gramp's Potato Chips produces 2560 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)   16
C)   24
D)   None of the above is correct.E) All of the above
F) None of the above

Question 9

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

Accepted Answer

A)   natural rights
B)   property rights
C)   input control
D)   collective controlE) None of the above
F) All of the above

Question 10

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.E) A) and B)
F) A) and D)

Question 11

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 D)
F) B) and C)

Question 12

Nathan owns a bakery that bakes only cakes. All of his bakers work 8 hours per day. In 2011, he employed 5 bakers who produced a total of 200 cakes each day. In 2012, he employed 6 bakers who produced a total of 249 cakes each day. The bakery's productivity

Accepted Answer

A)   decreased by 2.33%.
B)   increased by 2.33%.
C)   increased by 3.75%.
D)   increased by 24.50%.E) All of the above
F) A) and B)

Question 13

Human capital is the

Accepted Answer

A)   knowledge and skills that workers acquire through education, training, and experience.
B)   stock of equipment and structures that is used to produce goods and services.
C)   total number of hours worked in an economy.
D)   same thing as technological knowledge.E) C) and D)
F) B) and C)

Question 14

In 2009, the imaginary nation of Mainland had a population of 7,000 and real GDP of 210,000. In 2010 the population was 7,300 and real GDP of 223,380. Over the year in question, real GDP per person in Mainland grew by

Accepted Answer

A)   2 percent, which is high compared to average U.S. growth over the last one-hundred years.
B)   2 percent, which is about the same as average U.S. growth over the last one-hundred years.
C)   4 percent, which is high compared to average U.S. growth over the last one-hundred years.
D)   4 percent, which is about the same as average U.S. growth over the last one-hundred years.E) A) and D)
F) A) and C)

Question 15

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 3,000 work 7 hours a day to produce a total of 105,000 final goods.

Accepted Answer

A)   Workland has higher productivity and higher real GDP per person than Laborland.
B)   Workland has higher productivity but lower real GDP per person than Laborland.
C)   Workland has lower productivity but higher real GDP per person than Laborland.
D)   Workland has lower productivity and lower real GDP per person than Laborland.E) C) and D)
F) B) and C)

Question 16

If your firm's production function has constant returns to scale, then if you double all your inputs, your firm's output will

Accepted Answer

A)   double and productivity will rise.
B)   double but productivity will not change.
C)   more than double and productivity will rise.
D)   more then double but productivity will not change.E) B) and D)
F) A) and B)

Question 17

In some East Asian countries, average income, as measured by real GDP per person, has recently grown at an average annual rate that implies output will double about every

Accepted Answer

A)   10 years.
B)   15 years.
C)   20 years.
D)   25 years.E) A) and B)
F) All of the above

Question 18

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

Accepted Answer

A)   lend support to the invisible hand by maintaining property rights and political stability.
B)   limit foreign investment to industries that don't already exist in the country.
C)   impose trade restrictions to protect the interests of domestic producers and consumers.
D)   subsidize key industries.E) A) and B)
F) All of the above

Question 19

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 20

Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and had a productivity of 2.5. Country B had a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. Country

Accepted Answer

A)   A had the higher level of real GDP and real GDP per person.
B)   A had the higher level of real GDP and Country B had the higher level of real GDP per person
C)   B had the higher level of real GDP and Country A had the higher level of real GDP per person
D)   B had the higher level of real GDP and real GDP per person.E) A) and B)
F) B) and C)

Exam 12: Production and Growth

Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and had a productivity of 2.5. Country B had a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. Country

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In 2009, the imaginary nation of Mainland had a population of 7,000 and real GDP of 210,000. In 2010 the population was 7,300 and real GDP of 223,380. Over the year in question, real GDP per person in Mainland grew by

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

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

Correct AnswerverifiedBoth physical capita...View AnswerShow Answer

Gramp's Potato Chips produces 2560 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

All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit?

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The short-run effects of an increase in the saving rate include

Correct AnswerverifiedShow Answer

Human capital is the

Correct AnswerverifiedShow Answer

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

Correct AnswerverifiedShow Answer

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

Correct AnswerverifiedShow Answer

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 3,000 work 7 hours a day to produce a total of 105,000 final goods.

Correct AnswerverifiedShow Answer

What is a production function? Write an equation for a typical production function, and explain what each of the terms represents.

Correct AnswerverifiedA production function is a mathematical ...View AnswerShow 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

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

Correct AnswerverifiedShow Answer

Nathan owns a bakery that bakes only cakes. All of his bakers work 8 hours per day. In 2011, he employed 5 bakers who produced a total of 200 cakes each day. In 2012, he employed 6 bakers who produced a total of 249 cakes each day. The bakery's productivity

Correct AnswerverifiedShow Answer

If your firm's production function has constant returns to scale, then if you double all your inputs, your firm's output will

Correct AnswerverifiedShow Answer

In 2011, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours per day. In 2012, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per day. Productivity at Modern Electronics

Correct AnswerverifiedShow Answer

In some East Asian countries, average income, as measured by real GDP per person, has recently grown at an average annual rate that implies output will double about every

Correct AnswerverifiedShow Answer

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Both physical capita...
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A production function is a mathematical ...
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Countries with natural seaport...
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