Question 1

The dictator of Turan has recently begun to arbitrarily seize farms belonging to his political opponents, and he has given the farms to his friends. His friends don't know much about farming. The courts in Turan have ruled that the seizures are illegal, but the dictator has ignored the rulings. Other things equal, we would expect that the growth rate in Turan will

Accepted Answer

A)   fall temporarily, but will return to where it was when the new owners learn how to farm.
B)   increase because the total amount of human capital in the country will increase as the new owners learn how to farm.
C)   fall and remain lower for a long time.
D)   not be affected unless widespread civil disorder or civil war results.E) A) and B)
F) B) and D)

Question 2

Senator Smith says that in order to help poor countries develop, the United States should: 1. Prevent U.S. corporations from investing in poor countries because they take profits that the poor countries should have; 2. reduce or eliminate subsidizes to U.S. producers when poor countries have a comparative advantage producing those 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 D)
F) C) and D)

Question 3

Proprietary technology is technology that is

Accepted Answer

A)   widely used because it is easy to learn.
B)   widely used because the government subsidizes its use.
C)   not widely used because people could, but have not, taken the time to learn how to apply it.
D)   not widely used because it is known or controlled only by the company that discovered it.E) B) and C)
F) C) and D)

Question 4

Consider three imaginary countries. In Aziria, saving amounts to $3,000 and consumption amounts to $7,000; in Graniva, saving amounts to $2,000 and consumption amounts to $8,000; and in Tanistan, saving amounts to $4,500 and consumption amounts to $10,500. The saving rate is

Accepted Answer

A)   higher in Aziria than in Tanistan, and it is higher in Tanistan than in Graniva.
B)   higher in Graniva than in Tanistan, and it is higher in Tanistan than in Aziria.
C)   higher in Tanistan than in Graniva, and it is the same in Graniva and Aziria.
D)   higher in Aziria than in Graniva, and it is the same in Aziria and Tanistan.E) All of the above
F) A) and B)

Question 5

Technological knowledge

Accepted Answer

A)   is the same thing as human capital.
B)   can be discovered but it can never be kept secret.
C)   is a determinant of productivity.
D)   does not play a role in the relationship that economists call the production function.E) None of the above
F) All of the above

Question 6

Countries that pursued outward-oriented policies in the 20th century

Accepted Answer

A)   experienced lower rates of economic growth than did countries that pursued inward-oriented policies.
B)   experienced higher levels of political instability than did countries that pursued inward-oriented policies.
C)   include Singapore, South Korea, and Taiwan.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 7

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Accepted Answer

A) True 
 B)False

Question 8

"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement

Accepted Answer

A)   is an assertion that production functions have the property of constant returns to scale.
B)   is consistent with the view that capital is subject to diminishing returns.
C)   is inconsistent with the view that it is easier for a country to grow fast if it starts out relatively poor.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 9

Countries that have lower levels of real GDP per person than the United States

Accepted Answer

A)   tend to have growth rates that are higher than that of the United States.
B)   tend to have growth rates that are about the same as that of the United States.
C)   tend to have growth rates that are lower than that of the United States.
D)   in some cases have growth rates that are higher than that of the United States and in other cases lower than that of the United States.E) A) and D)
F) C) and D)

Question 10

In the long run, a higher saving rate

Accepted Answer

A)   cannot increase the capital stock.
B)   means that people must consume less in the future.
C)   increases the level of productivity.
D)   None of the above is correct.E) All of the above
F) A) and C)

Question 11

Country A has real GDP per person of 10,000 while country B has real GDP per person of 20,000. All else constant, country A will eventually have a higher standard of living than country B if

Accepted Answer

A)   the level of saving per person is 500 in country A and 750 in country B.
B)   the level of saving per person is 1,000 in country A and 1,800 in country B.
C)   Both of the above are correct.
D)   None of the above are correct.E) A) and D)
F) A) and C)

Question 12

Which of the following would increase productivity?

Accepted Answer

A)   an increase in the physical capital stock per worker
B)   an increase in human capital per worker
C)   an increase in natural resources per worker
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 13

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Accepted Answer

A)   represents the traditional view of the production process.
B)   is an assertion that capital is subject to diminishing returns.
C)   is made under the assumption that the quantities of human capital, natural resources, and technology are being held constant.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 14

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

Question 15

Like physical capital, human capital is a produced factor of production.

Accepted Answer

A) True 
 B)False

Question 16

Scenario 7-1. An economy's production form takes the form Y = AF(L, K, H, N) .
-Refer to Scenario 7-1. In the production function, which of the following represents technology?

Accepted Answer

A)   A
B)   K
C)   H
D)   NE) C) and D)
F) A) and D)

Question 17

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) A) and C)

Question 18

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) All of the above

Question 19

Which of the following is consistent with the catch-up effect?

Accepted Answer

A)   The United States had a higher growth rate before 1900 than after.
B)   After World War II the United States had lower growth rates than war-ravaged European countries.
C)   Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 20

Which of the following would not be considered physical capital?

Accepted Answer

A)   a new factory building
B)   a computer used to help Mercury Delivery Service keep track of its orders
C)   on-the-job training
D)   a desk used in an accountant's officeE) None of the above
F) A) and D)

Exam 7: Production and Growth

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

Correct Answer
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Countries that have lower levels of real GDP per person than the United States

Correct Answer
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Correct Answer
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Scenario 7-1. An economy's production form takes the form Y = AF(L, K, H, N) . -Refer to Scenario 7-1. In the production function, which of the following represents technology?

Correct Answer
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Country A has real GDP per person of 10,000 while country B has real GDP per person of 20,000. All else constant, country A will eventually have a higher standard of living than country B if

Correct Answer
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Proprietary technology is technology that is

Correct Answer
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Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Correct Answer
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Which of the following statements is true?

Correct Answer
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In the long run, a higher saving rate

Correct Answer
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Which of the following would increase productivity?

Correct Answer
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Countries that pursued outward-oriented policies in the 20th century

Correct Answer
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Correct Answer
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Consider three imaginary countries. In Aziria, saving amounts to $3,000 and consumption amounts to $7,000; in Graniva, saving amounts to $2,000 and consumption amounts to $8,000; and in Tanistan, saving amounts to $4,500 and consumption amounts to $10,500. The saving rate is

Correct Answer
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Technological knowledge

Correct Answer
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Which of the following is correct?

Correct Answer
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Which of the following is consistent with the catch-up effect?

Correct Answer
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Like physical capital, human capital is a produced factor of production.

Correct Answer
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Which of the following would not be considered physical capital?

Correct Answer
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"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement

Correct Answer
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"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Correct Answer
verified

Exam 7: Production and Growth

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

Correct AnswerverifiedShow Answer

Countries that have lower levels of real GDP per person than the United States

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Scenario 7-1. An economy's production form takes the form Y = AF(L, K, H, N) . -Refer to Scenario 7-1. In the production function, which of the following represents technology?

Correct AnswerverifiedShow Answer

Country A has real GDP per person of 10,000 while country B has real GDP per person of 20,000. All else constant, country A will eventually have a higher standard of living than country B if

Correct AnswerverifiedShow Answer

Proprietary technology is technology that is

Correct AnswerverifiedShow Answer

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

In the long run, a higher saving rate

Correct AnswerverifiedShow Answer

Which of the following would increase productivity?

Correct AnswerverifiedShow Answer

Countries that pursued outward-oriented policies in the 20th century

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consider three imaginary countries. In Aziria, saving amounts to $3,000 and consumption amounts to $7,000; in Graniva, saving amounts to $2,000 and consumption amounts to $8,000; and in Tanistan, saving amounts to $4,500 and consumption amounts to $10,500. The saving rate is

Correct AnswerverifiedShow Answer

Technological knowledge

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Which of the following is consistent with the catch-up effect?

Correct AnswerverifiedShow Answer

Like physical capital, human capital is a produced factor of production.

Correct AnswerverifiedShow Answer

Which of the following would not be considered physical capital?

Correct AnswerverifiedShow Answer

"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement

Correct AnswerverifiedShow Answer

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Correct AnswerverifiedShow Answer

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