Question 1

National defense and knowledge are generally considered to be

Accepted Answer

A)  private goods.
B)  public goods.
C)  proprietary goods.
D)  societal goods.E) A) and B)
F) A) and C)

Question 2

Thomas Edison received patents on many of his inventions. While the patents existed, his ideas were

Accepted Answer

A)  public goods and proprietary knowledge.
B)  public goods but not proprietary knowledge.
C)  private goods and proprietary knowledge.
D)  private goods but not proprietary knowledge.E) All of the above
F) A) and C)

Question 3

A nation's standard of living is best measured by its

Accepted Answer

A)  real GDP.
B)  real GDP per person.
C)  nominal GDP.
D)  nominal GDP per person.E) A) and B)
F) A) and C)

Question 4

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) None of the above

Question 5

In the fourteenth century it is estimated that deaths resulting from the bubonic plague reduced the population by about a third. Assuming diminishing returns, the decrease in population should have

Accepted Answer

A)  increased productivity and real GDP per person.
B)  increased productivity but decreased real GDP per person.
C)  increased real GDP per person, but decreased productivity.
D)  decreased productivity and real GDP per person.E) A) and B)
F) C) and D)

Question 6

In 2009, the imaginary nation of Mainland had a population of 6,000 and real GDP of 120,000. In 2010 the population was 6,200 and real GDP of 128,960. 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 C)
F) A) and B)

Question 7

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology. Yet many economists believe that patents generate growth. Explain why.

Accepted Answer

Once someone comes up with an idea it is...

Question 8

Which of the following is correct?

Accepted Answer

A)  Once adjustment is made for inflation, the prices of most natural resources have been about steady or falling.
B)  Technological progress has allowed us to substitute renewable resources for some nonrenewable resources.
C)  Technological progress has made once-crucial natural resources less necessary.
D)  All of the above are correct.E) All of the above
F) C) and D)

Question 9

Which of the following is not correct?

Accepted Answer

A)  Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life.
B)  With a growth rate of about 2 percent per year, average income per person doubles about every 35 years.
C)  The ranking of countries by average income changes very little over time.
D)  In some countries real income per person has changed very little over many years.E) All of the above
F) A) and B)

Question 10

When Chile experiences investment from abroad, it experiences, as a result,

Accepted Answer

A)  an increase in productivity.
B)  a decrease in Gross National Product (GNP) .
C)  lower wages for Chilean workers.
D)  None of the above is correct.E) A) and D)
F) B) and C)

Question 11

Suppose over the last year that the price of copper increased from ore increased from $1.70 a pound to $1.79 per pound. Over the same time a measure of the overall price level increased from 300 to 309. The price of copper increased by

Accepted Answer

A)  less than inflation, and this means it became relatively less scarce.
B)  less than inflation, and this means it became scarcer.
C)  more than inflation, and this means it became scarcer.
D)  more than inflation, but this doesn't necessarily mean that it become scarcer.E) All of the above
F) C) and D)

Question 12

Accumulating capital

Accepted Answer

A)  requires that society sacrifice consumption goods in the present.
B)  allows society to consume more in the present.
C)  decreases saving rates.
D)  involves no tradeoffs.E) All of the above
F) B) and D)

Question 13

Thomas Malthus's predictions turned out to be wrong due to

Accepted Answer

A)  technological advances such as those during the Industrial Revolution.
B)  smaller populations now than in the time of Malthus.
C)  the effects of brain-drain.
D)  unlimited natural resources.E) A) and B)
F) B) and C)

Question 14

A barber shop produces 96 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)  2
B)  3
C)  4
D)  6E) B) and D)
F) C) and D)

Question 15

If a production function has constant returns to scale, output can be doubled if

Accepted Answer

A)  labor alone doubles.
B)  all inputs but labor double.
C)  all of the inputs double.
D)  None of the above is correct.E) A) and D)
F) C) and D)

Question 16

Which of the following items plays a role in determining productivity?

Accepted Answer

A)  physical capital
B)  natural resources
C)  technological knowledge
D)  All of the above are correct.E) None of the above
F) C) and D)

Question 17

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) None of the above
F) All of the above

Question 18

Educational attainment tends to be

Accepted Answer

A)  low in countries with high population growth.
B)  low in countries with low population growth.
C)  high in countries with high population growth.
D)  None of the above are true.E) B) and C)
F) B) and D)

Question 19

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

Question 20

Other things the same, a country that increases its savings rate will have

Accepted Answer

A)  higher future capital and higher future real GDP per person.
B)  higher future capital but not higher future real GDP per person.
C)  higher future real GDP per person but not higher future capital.
D)  neither higher future capital nor higher future real GDP per person.E) None of the above
F) All of the above

Exam 12: Production and Growth

When Chile experiences investment from abroad, it experiences, as a result,

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Thomas Edison received patents on many of his inventions. While the patents existed, his ideas were

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Which of the following is not correct?

Correct AnswerverifiedShow Answer

Thomas Malthus's predictions turned out to be wrong due to

Correct AnswerverifiedShow Answer

Suppose over the last year that the price of copper increased from ore increased from $1.70 a pound to $1.79 per pound. Over the same time a measure of the overall price level increased from 300 to 309. The price of copper increased by

Correct AnswerverifiedShow Answer

Other things the same, a country that increases its savings rate will have

Correct AnswerverifiedShow Answer

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology. Yet many economists believe that patents generate growth. Explain why.

Correct AnswerverifiedOnce someone comes up with an idea it is...View AnswerShow Answer

Accumulating capital

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Which of the following is correct?

Correct AnswerverifiedShow Answer

In the fourteenth century it is estimated that deaths resulting from the bubonic plague reduced the population by about a third. Assuming diminishing returns, the decrease in population should have

Correct AnswerverifiedShow Answer

National defense and knowledge are generally considered to be

Correct AnswerverifiedShow Answer

In 2009, the imaginary nation of Mainland had a population of 6,000 and real GDP of 120,000. In 2010 the population was 6,200 and real GDP of 128,960. Over the year in question, real GDP per person in Mainland grew by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

Educational attainment tends to be

Correct AnswerverifiedShow Answer

A nation's standard of living is best measured by its

Correct AnswerverifiedShow Answer

Which of the following items plays a role in determining productivity?

Correct AnswerverifiedShow Answer

A barber shop produces 96 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

If a production function has constant returns to scale, output can be doubled if

Correct AnswerverifiedShow Answer

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Once someone comes up with an idea it is...
View Answer

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