Question 1

The traditional view of the production process is that capital is subject to

Accepted Answer

A)  diminishing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries.
B)  diminishing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries.
C)  increasing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries.
D)  increasing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries.E) B) and C)
F) A) and B)

Question 2

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

Accepted Answer

A)  not change.
B)  increase but not double.
C)  double.
D)  more than double.E) A) and B)
F) A) and C)

Question 3

Which of the following is an example of physical capital?

Accepted Answer

A)  the computer a secretary uses
B)  rivers on which goods are transported
C)  the skills and knowledge of a doctor
D)  All of the above are correct.E) All of the above
F) B) and C)

Question 4

A barber shop produces 192 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shop's productivity is 2 haircuts per hour of labor, then how many barbers does the shop employ?

Accepted Answer

A)  8
B)  12
C)  16
D)  None of the above is correct.E) A) and C)
F) A) and D)

Question 5

Senator Noitall says that in order to help poor countries develop, the United States should: 1. Encourage poor countries to allow U.S. and other foreign firms to build and operate businesses in their country; 2. Reduce or eliminate subsidies to U.S. producers when poor countries have a comparative advantage producing goods the U.S. subsidizes; 3. Work to promote political stability in poor countries; and 4. Reduce poor countries reliance on market forces in their economies. How many of these ideas are likely to help poor countries grow?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) B) and C)
F) A) and B)

Question 6

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

Accepted Answer

Both physical capita...

Question 7

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 8

All else equal, which of the following would tend to cause real GDP per person to rise?

Accepted Answer

A)  a change from inward-oriented policies to outward-oriented policies
B)  an increase in investment in human capital
C)  strengthening of property rights.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 9

In an economy where net exports are zero, if saving rises in some period, then in that period

Accepted Answer

A)  consumption and investment fall.
B)  consumption falls and investment rises.
C)  consumption rises and investment falls.
D)  consumption rises and investment rises.E) B) and C)
F) A) and D)

Question 10

Which of the following provide benefits to society at large and not just to the person(s)  who pursues it?

Accepted Answer

A)  both technological knowledge that is a public good and education
B)  technological knowledge that is a public good, but not education
C)  education, but not technological knowledge that is a public good
D)  neither education, nor technological knowledge that is a public goodE) C) and D)
F) B) and C)

Question 11

Which of the following countries achieved higher economic growth, in part by mandating a reduction in population growth?

Accepted Answer

A)  Great Britain
B)  China
C)  Australia
D)  FranceE) None of the above
F) A) and C)

Question 12

Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following best describes the response of output as time passes to an increase in the saving rate?

Accepted Answer

A)  The growth rate of output does not change.
B)  The growth rate of output increases and gets even larger as time passes.
C)  The growth rate of output increases and does not change as time passes.
D)  The growth rate of output increases, but diminishes to its former level as time passes.E) A) and D)
F) A) and C)

Question 14

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

Question 15

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?

Accepted Answer

A)  both the first and the second
B)  the first but not the second
C)  the second but not the first
D)  neither the first nor the secondE) A) and C)
F) C) and D)

Question 16

Productivity can be computed as the number of hours worked divided by output.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is correct?

Accepted Answer

A)  In 1870, real income per person was higher in the United States than in any other country at that time.
B)  Over about the last 100 years India experienced significantly higher growth of real income per person than did the United States.
C)  Over about the last 100 years the United States experienced significantly higher growth of real income per person than did Japan.
D)  None of the above are correct.E) C) and D)
F) A) and C)

Question 18

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

Accepted Answer

A) True 
 B)False

Question 19

Because of its vast oil reserves, Saudi Arabia is a rich country. Saudi Arabia exemplifies the general fact that differences in __________ are responsible for some of the differences in standards of living around the world.

Accepted Answer

The answer of Because of its vast oil reserves, Saudi...

Question 20

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) A) and C)
F) B) and C)

Exam 25: Production and Growth

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

Correct Answer
verified

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

Correct Answer
verified
A production function is a mathematical ...
View Answer

A barber shop produces 192 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shop's productivity is 2 haircuts per hour of labor, then how many barbers does the shop employ?

Correct Answer
verified

Productivity can be computed as the number of hours worked divided by output.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Because of its vast oil reserves, Saudi Arabia is a rich country. Saudi Arabia exemplifies the general fact that differences in __________ are responsible for some of the differences in standards of living around the world.

Correct Answer
verified

Which of the following is an example of physical capital?

Correct Answer
verified

Which of the following best describes the response of output as time passes to an increase in the saving rate?

Correct Answer
verified

All else equal, which of the following would tend to cause real GDP per person to rise?

Correct Answer
verified

Correct Answer
verified

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?

Correct Answer
verified

Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

Correct Answer
verified

Which of the following countries achieved higher economic growth, in part by mandating a reduction in population growth?

Correct Answer
verified

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

Correct Answer
verified

In an economy where net exports are zero, if saving rises in some period, then in that period

Correct Answer
verified

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

Correct Answer
verified
Both physical capita...
View Answer

Which of the following statements is correct?

Correct Answer
verified

Which of the following provide benefits to society at large and not just to the person(s) who pursues it?

Correct Answer
verified

The traditional view of the production process is that capital is subject to

Correct Answer
verified

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

Correct Answer
verified

Exam 25: Production and Growth

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

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

A barber shop produces 192 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shop's productivity is 2 haircuts per hour of labor, then how many barbers does the shop employ?

Correct AnswerverifiedShow Answer

Productivity can be computed as the number of hours worked divided by output.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Because of its vast oil reserves, Saudi Arabia is a rich country. Saudi Arabia exemplifies the general fact that differences in __________ are responsible for some of the differences in standards of living around the world.

Correct AnswerverifiedShow Answer

Which of the following is an example of physical capital?

Correct AnswerverifiedShow Answer

Which of the following best describes the response of output as time passes to an increase in the saving rate?

Correct AnswerverifiedShow Answer

All else equal, which of the following would tend to cause real GDP per person to rise?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?

Correct AnswerverifiedShow Answer

Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

Correct AnswerverifiedShow Answer

Which of the following countries achieved higher economic growth, in part by mandating a reduction in population growth?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In an economy where net exports are zero, if saving rises in some period, then in that period

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

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following provide benefits to society at large and not just to the person(s) who pursues it?

Correct AnswerverifiedShow Answer

The traditional view of the production process is that capital is subject to

Correct AnswerverifiedShow Answer

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
A production function is a mathematical ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Both physical capita...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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