Question 1

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,275 a ton. Over the same time a measure of the overall price level increased from 150 to 156. The price of iron ore increased by

Accepted Answer

A)   less than inflation, so it became less scarce.
B)   less than inflation, so it became more scarce.
C)   more than inflation, so it became more scarce.
D)   more than inflation, so it became less scarce.

Question 2

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.

Question 3

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

Accepted Answer

A)   have no impact on the level of real GDP per person.
B)   immediately and permanently decrease the level of real GDP per person.
C)   immediately and permanently increase the level of real GDP person.
D)   gradually raise the level of real GDP per person.

Question 4

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Accepted Answer

A) True 
 B)False

Question 5

If a country's saving rate declined, then other things the same, in the long run the country would have

Accepted Answer

A)   lower productivity, but not lower real GDP per person.
B)   lower productivity and lower real GDP per person.
C)   lower real GDP per person, but not lower productivity
D)   neither lower productivity nor lower real GDP per person.

Question 6

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Accepted Answer

A)   and physical capital per worker will increase.
B)   and physical capital per worker will decrease.
C)   will increase but physical capital per worker will decrease.
D)   will decrease but physical capital per worker will increase.

Question 7

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Accepted Answer

Since bearing a child has an opportunity...

Question 8

Which of the following nations experienced average rates of economic growth of a bit under 2% over the last 100 years or so?

Accepted Answer

A)   Mexico
B)   Brazil
C)   the United States
D)   All of the above are correct.

Question 9

In the United States over the past century, real GDP per person has grown by about
percent per year.

Accepted Answer

2 or, more...

Question 10

According to research by Robert Fogel, people in Britain grew taller because of

Accepted Answer

A)   genetics. However this increase in height had no effect on productivity.
B)   genetics. This increase in height is associated with higher productivity.
C)   higher caloric intake. However, this increase in height had no effect on productivity.
D)   higher caloric intake. This increase in height is associated with higher productivity.

Question 11

Suppose a country increases trade restrictions. This country would be pursing an

Accepted Answer

A)   inward policy, which most economists believe has beneficial effects on the economy.
B)   inward policy, which most economists believe has adverse effects on the economy.
C)   outward policy, which most economists believe has beneficial effects on the economy.
D)   outward policy, which most economists believe has adverse effects on the economy.

Question 12

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

Accepted Answer

A) True 
 B)False

Question 13

In order to assess the level of prosperity in a nation in a given year, should we examine the level of that nation's real GDP per person, or should we examine the growth rate of that nation's real GDP per person?

Accepted Answer

The level of that na...

Question 14

Among the following countries, which one has the highest level of real GDP per person but the lowest growth rate of real GDP per person over a very long period of time?

Accepted Answer

A)   the United Kingdom
B)   Mexico
C)   Argentina
D)   China

Question 15

Countries with more than 80 percent of their population living within 100 kilometers of a coast will have an average GDP per person that is

Accepted Answer

A)   around four times a country with less than 20 percent of the population living near the coast.
B)   around ten times a country with less than 20 percent of the population living near the coast.
C)   around twenty times a country with less than 20 percent of the population living near the coast.
D)   around fifty times a country with less than 20 percent of the population living near the coast.

Question 16

The behavior of market prices over time indicates that natural resources are

Accepted Answer

A)   a limit to economic growth.
B)   unrelated to economic growth.
C)   not a limit to economic growth.
D)   the major determinant of productivity.

Question 17

"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.

Question 18

Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500.

Accepted Answer

A)   Upland has higher productivity and higher real GDP per person than Lowland.
B)   Upland has higher productivity but lower real GDP per person than Lowland.
C)   Upland has lower productivity but higher real GDP per person than Lowland.
D)   Upland has lower productivity and lower real GDP per person than Lowland.

Question 19

Productivity is the

Accepted Answer

A)   key determinant of living standards, and growth in productivity is the key determinant of growth in living standards.
B)   key determinant of living standards, but growth in productivity is not the key determinant of growth in living standards.
C)   not the key determinant of living standards, but growth in productivity is the key determinant of growth in living standards.
D)   not the key determinant of living standards, and growth in productivity is not the key determinant of growth in living standards.

Question 20

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Accepted Answer

A)   productivity.
B)   population.
C)   preferences.
D)   prices.

Exam 12: Production and Growth

If a country's saving rate declined, then other things the same, in the long run the country would have

Correct AnswerverifiedShow Answer

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

Correct AnswerverifiedShow Answer

According to research by Robert Fogel, people in Britain grew taller because of

Correct AnswerverifiedShow Answer

Which of the following nations experienced average rates of economic growth of a bit under 2% over the last 100 years or so?

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

Productivity is the

Correct AnswerverifiedShow Answer

Suppose a country increases trade restrictions. This country would be pursing an

Correct AnswerverifiedShow Answer

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

Correct AnswerverifiedShow Answer

The behavior of market prices over time indicates that natural resources are

Correct AnswerverifiedShow Answer

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,275 a ton. Over the same time a measure of the overall price level increased from 150 to 156. The price of iron ore increased by

Correct AnswerverifiedShow Answer

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Correct AnswerverifiedSince bearing a child has an opportunity...View AnswerShow Answer

Among the following countries, which one has the highest level of real GDP per person but the lowest growth rate of real GDP per person over a very long period of time?

Correct AnswerverifiedShow Answer

In the United States over the past century, real GDP per person has grown by about percent per year.

Correct Answerverified2 or, more...View AnswerShow Answer

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Correct AnswerverifiedShow Answer

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Correct AnswerverifiedShow Answer

Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500.

Correct AnswerverifiedShow Answer

Countries with more than 80 percent of their population living within 100 kilometers of a coast will have an average GDP per person that is

Correct AnswerverifiedShow Answer

In order to assess the level of prosperity in a nation in a given year, should we examine the level of that nation's real GDP per person, or should we examine the growth rate of that nation's real GDP per person?

Correct AnswerverifiedThe level of that na...View AnswerShow Answer

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Since bearing a child has an opportunity...
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The level of that na...
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