Question 1

How is a nation's standard of living determined?

Accepted Answer

A)   by its productivity
B)   by its gross domestic product
C)   by its national income
D)   by the size of its labour forceE) A) and D)
F) All of the above

Question 2

Which has been happening to the market prices of most natural resources (adjusted for inflation) ?

Accepted Answer

A)   They have been rising.
B)   They have been stable or rising.
C)   They have been stable or falling.
D)   They have been falling.E) A) and D)
F) A) and B)

Question 3

In medieval Europe, an important technological advance was the use of the padded horse collar for plowing. Once this idea was thought of, other people used it. What does this example illustrate about knowledge?

Accepted Answer

A)   It is generally a public good.
B)   It is generally a societal good.
C)   It is generally a private good.
D)   It is generally a normal good.E) A) and B)
F) All of the above

Question 4

Although growth rates across countries vary, rankings of countries by income remain pretty much the same over time.

Accepted Answer

A) True 
 B)False

Question 5

What is an example of a nonrenewable resource?

Accepted Answer

A)   coal
B)   honey
C)   livestock
D)   a forestE) A) and B)
F) None of the above

Question 6

One reason that governments may find it useful to sponsor universities and basic research is that, to a large extent, knowledge is a public good.

Accepted Answer

A) True 
 B)False

Question 7

There is some controversy concerning what the source of the Canadian productivity slowdown was in the period of 1974 to 1982. What is the most likely explanation?

Accepted Answer

A)   a decrease in the growth of human capital per person
B)   capital wearing out so that capital per person fell
C)   changes in technological progress
D)   the continued depletion of natural resourcesE) A) and B)
F) None of the above

Question 8

If there are constant returns to scale, how is the production function written?

Accepted Answer

A)   xY = 2 x A F(L, K, H, N) 
B)   Y/L = A F(xL, xK, xH, xN) 
C)   Y/L = A F( 1, K/L, H/L, N/L) 
D)   xL = A F(1,Y, K, H, N) E) A) and B)
F) A) and C)

Question 9

In the country of Krypton, the price of lead increased from $20 per kilogram to $22 per kilogram during a time when the overall price level increased by 6 percent. During this period, what happened to the real price of lead?

Accepted Answer

A)   It has increased by about 2 percent.
B)   It has decreased by about 4 percent.
C)   It has decreased by about 8 percent.
D)   It has increased by about 10 percent.E) B) and C)
F) None of the above

Question 10

Which list contains, in this order, natural resources, human capital, and physical capital?

Accepted Answer

A)   for a restaurant: the land where it stands; the things the kitchen; the freezers where the steaks are kept
B)   for a furniture company: wood; the company cafeteria; saws
C)   for a railroad: fuel; railroad engineers; railroad tracks
D)   for an oil company: the oil it brings to surface; the rigs; the refineries using its oilE) C) and D)
F) B) and D)

Question 11

If the production function for an economy had constant returns to scale, the labour force doubled, and all other inputs stayed the same, what would happen to real GDP?

Accepted Answer

A)   It would stay the same.
B)   It would increase by 50 percent.
C)   It would increase, but by something less than double.
D)   It would double.E) A) and D)
F) A) and B)

Question 12

A puzzle: The share of GDP devoted to investment was similar for Canada and South Korea over the period 1960-1990. However, South Korea had a 7 percent growth rate of average annual income, while Canada had only a 2.5 percent growth rate. How can this be explained

Accepted Answer

The solution to the puzzle is based on t...

Question 13

Suppose that real GDP grew more in Country A than in Country B last year. What does this imply concerning productivity or standard of living?

Accepted Answer

A)   Country A must have a higher standard of living than country B.
B)   Country A's productivity must have grown faster than country B's.
C)   Country A must have a higher real GDP than Country B.
D)   Country A's productivity must have been higher only if the population in the two countries grew at the same rate.E) None of the above
F) C) and D)

Question 14

Which country had the slowest growth between 1870 and 2010?

Accepted Answer

A)   Germany
B)   the United Kingdom
C)   Canada
D)   the United StatesE) A) and B)
F) A) and D)

Question 15

What do economists call the inputs used to produce goods and services?

Accepted Answer

A)   productivity indicators
B)   capitalization producers
C)   production functions
D)   factors of productionE) A) and C)
F) B) and D)

Question 16

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 17

Suppose that Poland undertakes policy to increase its saving rate. What will this policy most likely do?

Accepted Answer

A)   It will have no impact on GDP growth.
B)   It will lead to somewhat higher GDP growth for a few years.
C)   It will lead to substantially higher GDP growth for a period of several decades.
D)   It will lead to a permanently higher growth rate.E) None of the above
F) A) and B)

Question 18

Over the past century in Canada, by how much has real GDP per person grown?

Accepted Answer

A)   by about 1 percent per year
B)   by about 2 percent per year
C)   by about 4 percent per year
D)   by about 8 percent per yearE) B) and C)
F) None of the above

Question 19

What is an effect of inward-oriented policies?

Accepted Answer

A)   They impede growth because they restrict investment.
B)   They have generally increased productivity and growth in the countries that pursued them.
C)   They promote production of goods and services; the country that adopts them can produce most efficiently.
D)   They are likely to create more jobs for domestic workers.E) B) and D)
F) B) and C)

Question 20

Which statement best defines productivity?

Accepted Answer

A)   Productivity is the ability of a company to generate profit.
B)   Productivity is the quantity of goods and services that a nation can produce in a year.
C)   Productivity is the quantity of goods or services that a worker can produce in one hour.
D)   Productivity is the ability of a company to produce goods and services.E) B) and C)
F) A) and D)

Exam 7: Production and Growth

One reason that governments may find it useful to sponsor universities and basic research is that, to a large extent, knowledge is a public good.

Correct AnswerverifiedShow Answer

Over the past century in Canada, by how much has real GDP per person grown?

Correct AnswerverifiedShow Answer

Suppose that real GDP grew more in Country A than in Country B last year. What does this imply concerning productivity or standard of living?

Correct AnswerverifiedShow Answer

In medieval Europe, an important technological advance was the use of the padded horse collar for plowing. Once this idea was thought of, other people used it. What does this example illustrate about knowledge?

Correct AnswerverifiedShow Answer

If the production function for an economy had constant returns to scale, the labour force doubled, and all other inputs stayed the same, what would happen to real GDP?

Correct AnswerverifiedShow Answer

Which list contains, in this order, natural resources, human capital, and physical capital?

Correct AnswerverifiedShow Answer

What is an effect of inward-oriented policies?

Correct AnswerverifiedShow Answer

There is some controversy concerning what the source of the Canadian productivity slowdown was in the period of 1974 to 1982. What is the most likely explanation?

Correct AnswerverifiedShow Answer

Suppose that Poland undertakes policy to increase its saving rate. What will this policy most likely do?

Correct AnswerverifiedShow Answer

How is a nation's standard of living determined?

Correct AnswerverifiedShow Answer

What do economists call the inputs used to produce goods and services?

Correct AnswerverifiedShow Answer

Which country had the slowest growth between 1870 and 2010?

Correct AnswerverifiedShow Answer

Although growth rates across countries vary, rankings of countries by income remain pretty much the same over time.

Correct AnswerverifiedShow Answer

In the country of Krypton, the price of lead increased from $20 per kilogram to $22 per kilogram during a time when the overall price level increased by 6 percent. During this period, what happened to the real price of lead?

Correct AnswerverifiedShow Answer

What is an example of a nonrenewable resource?

Correct AnswerverifiedShow Answer

A puzzle: The share of GDP devoted to investment was similar for Canada and South Korea over the period 1960-1990. However, South Korea had a 7 percent growth rate of average annual income, while Canada had only a 2.5 percent growth rate. How can this be explained

Correct AnswerverifiedThe solution to the puzzle is based on t...View AnswerShow Answer

If there are constant returns to scale, how is the production function written?

Correct AnswerverifiedShow Answer

Which has been happening to the market prices of most natural resources (adjusted for inflation) ?

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

Which statement best defines productivity?

Correct AnswerverifiedShow Answer

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The solution to the puzzle is based on t...
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A production function is a mathematical ...
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