曼昆經(jīng)濟(jì)學(xué)題庫(kù)chapter17

.

/

Chapter17

ProductionandGrowth

MultipleChoice

1. Anation’sstandardoflivingismeasuredbyits

a. realGDP.

b. realGDPperperson.

c. nominalGDP.

d. nominalGDPperperson.

ANSWER:b. realGDPperperson.

TYPE:MDIFFICULTY:1SECTION:12.0

2. IncomeindevelopingcountrieslikeIndiaandIndonesia

a. is1/10thorlessofthatindevelopedcountrieslikeJapanandtheUnitedStates.

b. isabout1/8thofthatindevelopedcountrieslikeJapanandtheUnitedStates.

c. isabout1/5thofthatindevelopedcountrieslikeJapanandtheUnitedStates.

d. isabout1/3to1/2ofthatindevelopedcountrieslikeJapanandtheUnitedStates.

ANSWER:a. is1/10thorlessofthatindevelopedcountrieslikeJapanandtheUnitedStates.

TYPE:MDIFFICULTY:1SECTION:12.0

3. OverthepastcenturyintheUnitedStates,realGDPperpersonhasgrownbyabout

a. 1percentperyear.

b. 2percentperyear.

c. 4percentperyear.

d. 6percentperyear.

ANSWER:b. 2percentperyear.

TYPE:MDIFFICULTY:1SECTION:12.0

4. DuringthepastcenturytheaveragegrowthrateofU.S.realGDPperpersonimpliesthatitdoubledaboutevery

a. 100yearsonaverage.

b. 70years.

c. 35years.

d. 25years.

ANSWER:c. 35years.

TYPE:MDIFFICULTY:1SECTION:25.0

5. Overthepast100years,U.S.realGDPperpersonhasdoubledaboutevery35years.Ifinthenext100yearsitdoublesevery25years,thenacenturyfromnowU.S.realGDPperpersonwillbe

a. 4timeshigherthanitisnow.

b. 8timeshigherthanitisnow.

c. 12timeshigherthanitisnow.

d. 16timeshigherthanitisnow.

ANSWER:d. 16timeshigherthanitisnow.

TYPE:MDIFFICULTY:2SECTION:12.0

6. ThelevelofrealGDPperson

a. differswidelyacrosscountries,butthegrowthrateofrealGDPperpersonissimilaracrosscountries.

b. isverysimilaracrosscountries,butthegrowthrateofrealGDPperpersondifferswidelyacrosscountries.

c. andthegrowthrateofrealGDPperpersonaresimilaracrosscountries.

d. andthegrowthrateofrealGDPperpersonvarywidelyacrosscountries.

ANSWER:d. andthegrowthrateofrealGDPperpersonvarywidelyacrosscountries.

TYPE:MDIFFICULTY:1SECTION:12.0

7. OverthepastcenturyintheUnitedStates,averageincomeasmeasuredbyrealGDPperpersonhasgrownabout

a. 3.5percentperyear,whichimpliesadoublingaboutevery20years.

b. 2percentperyear,whichimpliesadoublingaboutevery35years.

c. 4percentperyear,whichimpliesadoublingaboutevery17.5years.

d. noneoftheabovearecorrect.

ANSWER:b. 2percentperyear,whichimpliesadoublingaboutevery35years.

TYPE:MDIFFICULTY:1SECTION:12.0

8. IntheUnitedStates,asmeasuredbyrealGDPperperson,averageincomeisabouthowmanytimesashighasaverageincomeacenturyago?

a. 2

b. 4

c. 6

d. 8

ANSWER:d. 8

TYPE:MDIFFICULTY:1SECTION:12.0

9. Newproductsareinventedeveryyear.ConsequentlyrealGDPgrowth

a. probablyunderestimatestherateofrealeconomicgrowth.

b. probablyoverestimatestherateofrealeconomicgrowth.

c. probablyaccuratelyestimatestherateofrealeconomicgrowth.

d. israrelyused.

ANSWER:a. probablyunder-estimatestherateofrealeconomicgrowth.

TYPE:MDIFFICULTY:2SECTION:12.1

10. Inrecentdecades,averageincomeinsomeEastAsiancountries,suchasHongKong,Singapore,andTaiwan,hasrisenabout

a. 2percentperyear.

b. 4percentperyear.

c. 7percentperyear.

d. 10percentperyear.

ANSWER:c. 7percentperyear.

TYPE:MDIFFICULTY:1SECTION:12.0

11. InsomeEastAsiancountries,averageincome,asmeasuredbyrealGDPperperson,hasgrownatanaverageannualratethatimpliesoutputshoulddoubleaboutevery

a. 10years.

b. 15years.

c. 20years.

d. 25years.

ANSWER:a. 10years.

TYPE:MDIFFICULTY:1SECTION:12.0

12. Inthelengthofonegeneration,whichofthefollowingcountrieshasgonefrombeingamongthepoorestcountriesintheworldtobeingamongtherichest?

a. Chad

b. Ethiopia

c. India

d. SouthKorea

ANSWER:d. SouthKorea

TYPE:MDIFFICULTY:1SECTION:12.0

13. Averageincomehasbeenstagnantformanyyearsin

a. Ireland.

b. Singapore.

c. Ethiopia.

d. Alloftheabovearecorrect.

ANSWER:c. Ethiopia.

TYPE:MDIFFICULTY:1SECTION:12.0

14. Whichofthefollowingistrue?

a. AlthoughlevelsofrealGDPperpersonvarysubstantiallyfromcountrytocountry,thegrowthrateofrealGDPperpersonissimilaracrosscountries.

b. Productivityisnotcloselylinkedtogovernmentpolicies.

c. ThelevelofrealGDPperpersonisagoodgaugeofeconomicprosperity,andthegrowthrateofrealGDPperpersonisagoodgaugeofeconomicprogress.

d. ProductivitymaybemeasuredbythegrowthrateofrealGDPperperson.

ANSWER:c. ThelevelofrealGDPperpersonisagoodgaugeofeconomicprosperity,andthegrowthrateofrealGDPperpersonisagoodgaugeofeconomicprogress.

TYPE:MDIFFICULTY:2SECTION:12.0

15. WhichofthefollowingdoesthelevelofrealGDPmeasure?

a. totalrealincome

b. productivity

c. thestandardofliving

d. Alloftheabovearecorrect.

ANSWER:a. totalrealincome

TYPE:MDIFFICULTY:2SECTION:12.0

16. Theaverageamountofgoodsandservicesproducedfromeachhourofaworker'stimeiscalled

a. percapitaGDP

b. percapitaGNP

c. productivity

d. humancapital

ANSWER:c. productivity

TYPE:MDIFFICULTY:1SECTION:12.0

17. Anation'sstandardoflivingisdeterminedby

a. itsproductivity.

b. itsgrossdomesticproduct.

c. itsnationalincome.

d. howmuchithasrelativetoothers.

ANSWER:a. itsproductivity.

TYPE:MDIFFICULTY:1SECTION:12.0

18. Whichofthefollowingiscorrect?

a. Overthelast100yearsJapanhadahigheraveragegrowthratethantheUnitedStates.ItfollowsthatthestandardoflivinginJapanisgreaterthanintheUnitedStates.

b. ThetypicalpersoninPakistantodayhasaboutthesamerealincomeasatypicalAmerican100yearsago.

c. ThetypicalcitizenofChinatodayhasaboutasmuchrealincomeasthetypicalAmericanin1950.

d. Noneoftheabovearecorrect.

ANSWER:d. Noneoftheabovearecorrect.

TYPE:MDIFFICULTY:2SECTION:12.1

19. In2000,thetypicalPakistanihadabouthowmanytimestheincomeofthetypicalAmericanin1900?

a. 2

b. 1

c. 2/3

d. 1/4

ANSWER:d. 1/4

TYPE:MDIFFICULTY:1SECTION:12.1

20. In2000,thetypicalcitizenofChinahadaboutasmuchrealincomeasthetypicalpersonintheUnitedKingdomin

a. 1870.

b. 1920.

c. 1945.

d. 1975

ANSWER:a. 1870.

TYPE:MDIFFICULTY:2SECTION:12.1

21. Whichofthefollowingcountries,hadthehighestgrowthrateoverthelast100years?

a. Brazil

b. Germany

c. Canada

d. UnitedStates

ANSWER:a. Brazil

TYPE:MDIFFICULTY:2SECTION:12.1

22. Countriesthatgrewthefastestoverthelast100yearshadgrowthratesofabout

a. 0.5percent.

b. 1.5percent.

c. 2.0percent.

d. 2.5percent.

ANSWER:d. 2.5percent.

TYPE:MDIFFICULTY:1SECTION:12.1

23. Ofthefollowingcountrieswhichgrewtheslowestoverthelast100years?

a. Brazil.

b. Mexico.

c. China.

d. UnitedStates.

ANSWER:d. UnitedStates.

TYPE:MDIFFICULTY:2SECTION:12.1

24. Whichofthefollowingiscorrect?

a. Countrieswiththehighestgrowthratesoverthelast100yearsaretheonesthathadthehighestlevelofrealGDP100yearsago.

b. Mostcountrieshavehadlittlefluctuationaroundtheiraveragegrowthratesduringthepast100years.

c. Therankingofcountriesbyincomechangessubstantiallyovertime.

d. Overthelast100years,JapanhadthehighestrealGDPgrowthrate,andnowhasthehighestrealGDPperperson.

ANSWER:c. Therankingofcountriesbyincomechangessubstantiallyovertime.

TYPE:MDIFFICULTY:2SECTION:12.1

25. Overthelast100yearswhichofthefollowinghadgrowthrateshigherthanthatoftheUnitedStates?

a. theUnitedKingdom

b. Bangladesh

c. Pakistan

d. Noneoftheabovearecorrect.

ANSWER:d. Noneoftheabovearecorrect.

TYPE:MDIFFICULTY:1SECTION:12.1

26. Whichofthefollowingnationsexperiencedaverageratesofeconomicgrowthoflessthan2.0percentoverthelast100years?

a. Bangladesh

b. Pakistan

c. UnitedKingdom

d. Alloftheabovearecorrect.

ANSWER:d. Alloftheabovearecorrect.

TYPE:MDIFFICULTY:1SECTION:12.1

27. In1870,therichestcountryintheworldwas

a. theUnitedStates.

b. Spain.

c. theUnitedKingdom.

d. Germany.

ANSWER:c. theUnitedKingdom.

TYPE:MDIFFICULTY:1SECTION:12.1

28. In2002realGDPperpersoninOlympuswas4,500.In2001itwas4,250.WhatwasthegrowthrateofrealGDPperperson?

a. 5.6percent

b. 5.9percent

c. 6.5percent

d. Noneoftheabovearecorrecttothenearesttenth.

ANSWER:b. 5.9percent

TYPE:MDIFFICULTY:1SECTION:12.1

29. In2002realGDPinOceaniawas561.0billionandthepopulationwas2.2million.In2001realGDPwas500.0billionandthepopulationwas2.0million.WhatwastheapproximategrowthrateofrealGDPperperson?

a. 12percent

b. 10percent

c. 4percent

d. 2percent

ANSWER:d. 2percent

TYPE:MDIFFICULTY:3SECTION:12.1

30. In2002realGDPinLataniawas750billionandthepopulationwas3million.In2003realGDPwas907.5andthepopulationwas3.3million.WhatwastheapproximategrowthrateofrealGDPperperson?

a. 10percent

b. 14percent

c. 17percent

d. 21percent

ANSWER:a. 10percent

TYPE:MDIFFICULTY:3SECTION:12.1

31. In2002,Freedoniahadapopulationof2,700andrealGDPofabout11,610,000.In2001ithadapopulationof2,500andrealGDPofabout10,000,000.WhatwastheapproximategrowthrateofrealGDPperpersoninFreedoniabetween2001and2002?

a. 7.5percent

b. 12.5percent

c. 20.5percent

d. 35.5percent

ANSWER:a. 7.5percent

TYPE:MDIFFICULTY:3SECTION:12.1

32. Whichofthefollowingiscorrect?

a. Ifarelativelypoorcountryhadgrownat3.5percentperyearforthelast100years,itwouldbearelativelyrichcountrytoday.

b. InternationaldataonthehistoryofrealGDPgrowthratesshowsthattherichcountriesgetricherandthepoorcountriesgetpoorer.

c. IntheUnitedStates,averageincometodayisaboutfourtimesashighasaverageincomeacenturyago.

d. Alloftheabovearecorrect.

ANSWER:a. Ifarelativelypoorcountryhadgrownat3.5percentperyearforthelast100years,itwouldbearelativelyrichcountrytoday.

TYPE:MDIFFICULTY:2SECTION:12.1

33. Productivity

a. isnearlythesameacrosscountriesandsoprovidesnohelpexplainingdifferencesacrosscountriesinthestandardofliving.

b. explainsverylittleofthedifferencesacrosscountriesinthestandardofliving.

c. explainssome,butnotmostofthedifferencesacrosscountriesinthestandardofliving.

d. explainsmostofthedifferencesacrosscountriesinthestandardofliving.

ANSWER:d. explainsmostofthedifferencesacrosscountriesinthestandardofliving.

TYPE:MDIFFICULTY:2SECTION:12.2

34. Whichofthefollowingisacorrectwaytomeasureproductivity?

a. dividethenumberofhoursworkedbyoutput

b. divideoutputbythenumberofhoursworked

c. computeoutputgrowth

d. dividethechangeinoutputbythechangeinnumberofhoursworked

ANSWER:b. divideoutputbythenumberofhoursworked

TYPE:MDIFFICULTY:1SECTION:12.2

35. CedarValleyFurnitureuses5workersworking8hourstoproduce80rockingchairs.Whatistheproductivityoftheseworkers?

a. 2chairsperhour.

b. 1hourperchair.

c. 80chairs.

d. Noneoftheabovearecorrect.

ANSWER:a. 2chairsperhour.

TYPE:MDIFFICULTY:1SECTION:12.2

36. Whichofthefollowingiscorrect?

a. Productivityishoursworkeddividedbyoutputproduced.

b. AmericanshaveahigherstandardoflivingthanIndonesiansbecauseAmericanworkersaremoreproductivethanIndonesianworkers.

c. Changesinthemarketpricesofmostresourcesindicatethattheyarebecomingincreasinglyscarce.

d. Alloftheabovearecorrect.

ANSWER:b. AmericanshaveahigherstandardoflivingthanIndonesiansbecauseAmericanworkersaremoreproductivethanIndonesianworkers.

TYPE:MDIFFICULTY:1SECTION:12.2

37. WhichofthefollowingisNOTcorrect?

a. Countriesthathavehadhigheroutputgrowthperpersonhavetypicallynotdonesowithhigherproductivitygrowth.

b. Acountry’sstandardoflivinganditsproductivityarecloselyrelated.

c. Productivityreferstooutputproducedperhourofwork.

d. Increasesinproductivitycanbeusedtoincreaseoutputorleisure.

ANSWER:a. Countriesthathavehadhigheroutputgrowthperpersonhavetypicallynotdonesowithhigherproductivitygrowth.

TYPE:MDIFFICULTY:1SECTION:12.2

38. BothTomandJerryworkeighthoursaday.TomcanproducesixbasketsofgoodsperhourwhileJerrycanproducefourbasketsofthesamegoodsperhour.ItfollowsthatTom’s

a. productivityisgreaterthanJerry’s.

b. outputisgreaterthanJerry’s.

c. standardoflivingishigherthanJerry’s.

d. Alloftheabovearecorrect.

ANSWER:d. Alloftheabovearecorrect.

TYPE:MDIFFICULTY:1SECTION:12.2

39. Whichofthefollowingisadeterminantofproductivity?

a. humancapital

b. physicalcapital

c. naturalresources

d. Alloftheabovearecorrect.

ANSWER:d. Alloftheabovearecorrect.

TYPE:MDIFFICULTY:1SECTION:12.2

40. Theinputsusedtoproducegoodsandservicesarealsocalled

a. productivityindicators.

b. capitalizationproducers.

c. productionfunctions.

d. factorsofproduction.

ANSWER:d. factorsofproduction.

TYPE:MDIFFICULTY:1SECTION:12.2

41. Theequipmentandstructuresavailabletoproducegoodsandservicesarecalled

a. physicalcapital.

b. humancapital.

c. theproductionfunction.

d. technology.

ANSWER:a. physicalcapital.

TYPE:MDIFFICULTY:1SECTION:12.2

42. Thesaws,lathes,anddrillpressesthatwoodworkersatCedarValleyFurnitureusetoproducechestsandcabinetsarecalled

a. humancapital.

b. physicalcapital.

c. naturalresources.

d. technologicalknowledge.

ANSWER:b. physicalcapital.

TYPE:MDIFFICULTY:1SECTION:12.2

43. Whichofthefollowingwouldnotbeconsideredphysicalcapital?

a. anewfactorybuilding

b. acomputerusedtohelpMercuryDeliveryServicekeeptrackoftheirorders

c. on-the-jobtraining

d. adeskusedinanaccountant’soffice

ANSWER:c. on-the-jobtraining

TYPE:MDIFFICULTY:1SECTION:12.2

44. Whichofthefollowingwouldbeconsideredphysicalcapital?

a. thepizzaovenattheLiquidityPreferencesTavern

b. soybeansusedtomakesoymilk

c. theskillsandknowledgeofabarber

d. Alloftheabovearecorrect.

ANSWER:a. thepizzaovenattheLiquidityPreferencesTavern

TYPE:MDIFFICULTY:1SECTION:12.2

45. Humancapitalisthe

a. knowledgeandskillsthatworkersacquirethrougheducation,training,andexperience.

b. stockofequipmentandstructuresthatisusedtoproducegoodsandservices.

c. totalnumberofhoursworkedinaneconomy.

d. samethingastechnologicalknowledge.

ANSWER:a. knowledgeandskillsthatworkersacquirethrougheducation,training,andexperience.

TYPE:MDIFFICULTY:1SECTION:12.2

46. Whichofthefollowingisconsideredhumancapital?

a. knowledgeacquiredfromearlychildhoodeducationprograms

b. knowledgeacquiredfromgradeschool

c. knowledgeacquiredfromon-the-jobtraining

d. Alloftheabovearecorrect.

ANSWER:d. Alloftheabovearecorrect.

TYPE:MDIFFICULTY:1SECTION:12.2

47. Whichofthefollowingishumancapital?

a. breakfastsservedinacompany’scafeteria

b. understandinghowtouseacompany’saccountingsoftware

c. trainingvideosfornewcorporateemployees

d. Alloftheabovearecorrect.

ANSWER:b. understandinghowtouseacompany’saccountingsoftware

TYPE:MDIFFICULTY:2SECTION:12.2

48. Whichofthefollowingisconsideredhumancapital?

a. thecomfortablechairinyourdormroomwhereyoureadeconomicstexts

b. theamountyougetpaideachweektoworkatthelibrary

c. thethingsyouhavelearnedthissemester

d. anycapitalgoodsthatrequireahumantobepresenttooperate

ANSWER:c. thethingsyouhavelearnedthissemester

TYPE:MDIFFICULTY:1SECTION:12.2

49. WhichofthefollowingisapartofyourEconomicsprofessor’shumancapital?

a. thethingsshelearnedatsomeprestigiousuniversity

b. hercopyofMankiw’stext

c. herchalkholder

d. Alloftheabovearecorrect.

ANSWER:a. thethingsshelearnedatsomeprestigiousuniversity

TYPE:MDIFFICULTY:1SECTION:12.2

50. Naturalresources

a. areinputsprovidedbynature.

b. areinputssuchasland,rivers,andmineraldeposits.

c. taketwoforms:renewableandnonrenewable.

d. Alloftheabovearecorrect.

ANSWER:d. Alloftheabovearecorrect.

TYPE:MDIFFICULTY:1SECTION:12.2

51. Whichofthefollowinglistscontains,inthisorder,naturalresources,humancapital,andphysicalcapital?

a. Forarestaurant:theproduceusedtomakesalad,thethingstheCheflearnedatCookingSchool,thefreezerswherethesteaksarekept.

b. Forafurniturecompany:wood,thecompanycafeteria,saws.

c. Forarailroad:fuel,railroadengines,railroadtracks.

d. Noneoftheabovearecorrect.

ANSWER:a. Forarestaurant:theproduceusedtomakesalad,thethingstheCheflearnedatCookingSchool,thefreezerswherethesteaksarekept.

TYPE:MDIFFICULTY:1SECTION:12.2

52. Whichofthefollowingisanexampleofanonrenewableresource?

a. coal

b. honey

c. livestock

d. Alloftheabovearecorrect.

ANSWER:a. coal

TYPE:MDIFFICULTY:1SECTION:12.2

53. Inamarketeconomy,scarcityofresourcesismostclearlyreflectedin

a. supply.

b. demand.

c. marketprices.

d. thestockoftheresource.

ANSWER:c. marketprices.

TYPE:MDIFFICULTY:2SECTION:12.2

54. Inamarketeconomy,weknowthataresourcehasbecomescarcerwhen

a. itspricerisesrelativetootherprices.

b. itisnon-renewableandsomeofitisused.

c. peoplesearchforsubstitutes.

d. Alloftheabovearecorrect.

ANSWER:a. itspricerisesrelativetootherprices.

TYPE:MDIFFICULTY:2SECTION:12.2

55. Inamarketeconomy,thereal,orinflationadjusted,priceofaresourcemeasuresits

a. contributiontorevenue.

b. relativescarcity.

c. relativeimportance.

d. contributiontoefficiency.

ANSWER:b. relativescarcity.

TYPE:MDIFFICULTY:1SECTION:12.2

56. Greaterscarcityofanaturalresourceisindicated

a. simplybyanincreaseinitsprice.

b. byanincreaseinitspricethatisgreaterthantherateofinflation,butonlyiftheincreaseinpriceiscreatedbyareductioninsupply.

c. byaninincreaseinitspricethatisgreaterthantherateofinflation.

d. byanincreaseinitspricethatisgreaterthantherateofinflation,butonlyifthestockoftheresourcehasfallen.

ANSWER:c. byaninincreaseinitspricethatisgreaterthantherateofinflation.

TYPE:MDIFFICULTY:2SECTION:12.2

57. Themarketpricesofmostnaturalresources<adjustedforinflation>havebeen

a. rising.

b. stableorrising.

c. stableorfalling.

d. falling.

ANSWER:c. stableorfalling.

TYPE:MDIFFICULTY:2SECTION:12.2

58. Thebehaviorofmarketpricesovertimeshowthatnaturalresources

a. arealimittoeconomicgrowth.

b. areunrelatedtoeconomicgrowth.

c. arenotalimittoeconomicgrowth.

d. arethemajordeterminantofproductivity.

ANSWER:c. arenotalimittoeconomicgrowth.

TYPE:MDIFFICULTY:1SECTION:12.2

59. Whichofthefollowingiscorrect?

a. Therearenorenewablenaturalresources.

b. Thepricesofmostnaturalresourcesarestableorfallingrelativetootherprices.

c. Technologyrequiresgreateruseofnaturalresources.

d. Humancapitalisequivalenttotechnology.

ANSWER:b. Thepricesofmostnaturalresourcesarestableorfallingrelativetootherprices.

TYPE:MDIFFICULTY:2SECTION:12.2

60. Ifnaturalresourceswerebecomingscarcer,thenwewouldexpecttheir

a. pricestoberisingrelativetootherprices,astheyhavebeen.

b. pricestoberisingrelativetootherprices,butthishasnotoccurred.

c. knownquantitiestobefalling,astheyhavebeen.

d. knownquantitiestobefalling,buttheyhavenotbeen.

ANSWER:b. pricestoberisingrelativetootherprices,butthishasnotoccurred.

TYPE:MDIFFICULTY:1SECTION:12.2

61. Aleadingenvironmentalgrouprecentlypublishedareportcontendingthathumansarerunninga"resourcedeficit"becauseweareusingnaturalresourcesfasterthantheycanberegenerated.Thegroupclaimsthatthismeansthateconomicgrowthwilleventuallystop,andwillevenbereversed.Aneconomistwould

a. agreewiththereport,andwouldpointtorisingnaturalresourcepricesasevidence.

b. agreewiththereport,butwouldn’tthinkitwasimportantbecausegrowthwillnotslowdownforseveralcenturies.

c. disagreewiththereport,inpartbecauseitignoresthemitigatingeffectsoftechnologicalchange.

d. disagreewiththereportbecauselaborandcapitalaretheprimarydeterminantsofgrowth,andsincetheyareplentiful,growthwillnotslowdown.

ANSWER:c. disagreewiththereport,inpartbecauseitignoresthemitigatingeffectsoftechnologicalchange.

TYPE:MDIFFICULTY:2SECTION:12.2

62. Whichofthefollowingbeststateseconomists’understandingofthefactsconcerningtherelationshipbetweennaturalresourcesandeconomicgrowth?

a. Acountrywithnoorfewdomesticnaturalresourcesisdestinedtobepoor.

b. Differencesinnaturalresourceshavevirtuallynoroleinexplainingdifferencesinstandardsofliving.

c. Somecountriescanberichmostlybecauseoftheirnaturalresourcesandcountrieswithoutnaturalresourcesneednotbepoor,butcanneverhaveveryhighstandardsofliving.

d. Abundantdomesticnaturalresourcesmayhelpmakeacountryrich,butevencountrieswithfewnaturalresourcescanhavehighstandardsofliving.

ANSWER:d. Abundantdomesticnaturalresourcesmayhelpmakeacountryrich,butevencountrieswithfewnaturalresourcescanhavehighstandardsofliving.

TYPE:MDIFFICULTY:2SECTION:12.2

63. InthecountryofKrypton,thepriceofleadincreasedfrom$10perpoundto$11perpoundduringatimewhentheoverallpricelevelincreasedby5percent.Duringthisperiod,therealpriceoflead

a. increased.

b. decreased.

c. stayedthesame.

d. mighthaveincreased,decreasedorstayedthesame;moreinformationisneededtobesure.

ANSWER:a. increased.

TYPE:MDIFFICULTY:2SECTION:12.2

64. Proprietarytechnologyisknowledgethatis

a. knownbutnolongerusedmuch.

b. known,buthasonlyrecentlybeendiscovered.

c. knownwidelybythoseinaprofession.

d. knownonlybythecompanythatdiscoversit.

ANSWER:d. knownonlybythecompanythatdiscoversit.

TYPE:MDIFFICULTY:1SECTION:12.2

65. Amanagementprofessordiscoversawayforcorporatemanagementtooperatemoreefficiently.Hepublisheshisfindingsinajournal.Hisfindingsare

a. proprietaryandcommonknowledge.

b. neitherproprietarynorcommonknowledge.

c. proprietary,butnotcommon,knowledge

d. common,butnotproprietary,knowledge

ANSWER:d. common,butnotproprietary,knowledge

TYPE:MDIFFICULTY:1SECTION:12.2

66. Yourcompanydiscoversabetterwaytoproducemousetraps,butyourbettermethodsarenotapparentfromthemousetrapsthemselves.Yourknowledgeofhowtomoreefficientlyproducemousetrapsis

a. commontechnologicalknowledge.

b. common,butnottechnological,knowledge.

c. proprietarytechnologicalknowledge.

d. proprietary,butnottechnological,knowledge.

ANSWER:c. proprietarytechnologicalknowledge.

TYPE:MDIFFICULTY:1SECTION:12.2

67. Technologicalknowledgerefersto

a. humancapital.

b. availableinformationonhowtoproducethings.

c. resourcesexpendedtransmittingsociety'sunderstandingtothelaborforce.

d. Alloftheabovearetechnologicalknowledge.

ANSWER:b. availableinformationonhowtoproducethings.

TYPE:MDIFFICULTY:1SECTION:12.2

68. Therelationshipbetweenthequantityofoutputcreatedandthequantityofinputsneededtocreateitiscalled

a. thecapitalaccumulationfunction.

b. technologicalknowledge.

c. theproductionfunction.

d. humancapital.

ANSWER:c. theproductionfunction.

TYPE:MDIFFICULTY:1SECTION:12.2

69. Ifyourfirmhasconstantreturnstoscale,thenifyoudoubledallyourinputsyourfirm’soutputwould

a. notchange.

b. increase,butbylessthandouble.

c. double.

d. morethandouble.

ANSWER:c. double.

TYPE:MDIFFICULTY:1SECTION:12.2

70. Youbakecookies.Onedayyoudoublethetimeyouspend,doublethenumberofchocolatechips,flour,eggs,andallyourotherinputs,andbaketwiceasmanycookies.Yourcookieproductionfunctionhas

a. decreasingreturnstoscale.

b. zeroreturnstoscale.

c. constantreturnstoscale.

d. increasingreturnstoscale.

ANSWER:c. constantreturnstoscale.

TYPE:MDIFFICULTY:2SECTION:12.2

71. Ifthereareconstantreturnstoscale,theproductionfunctioncanbewrittenas

a. xY=2xAF<L,K,H,N>.

b. Y/L=AF<xL,xK,xH,xN>.

c. Y/L=AF<1,K/L,H/L,N/L>.

d. L=AF<Y,K,H,N>.

ANSWER:c. Y/L=AF<1,K/L,H/L,N/L>.

TYPE:MDIFFICULTY:2SECTION:12.2

72. Ifaproductionfunctionhasconstantreturnstoscale,outputcanbedoubledif

a. labordoubles.

b. anyoneoftheinputsdoubles.

c. alloftheinputsdouble.

d. Noneoftheabovearecorrect.

ANSWER:c. alloftheinputsdouble.

TYPE:MDIFFICULTY:1SECTION:12.2

73. Iftheproductionfunctionforaneconomyhadconstantreturnstoscale,thelaborforcedoubled,andallotherinputsstayedthesame,thenrealGDPwould

a. staythesame.

b. increaseby50percent.

c. increase,butbysomethinglessthandouble.

d. double.

ANSWER:c. increase,butbysomethinglessthandouble.

TYPE:MDIFFICULTY:2SECTION:12.2

74. Ifthenumberofworkersinaneconomydoubled,allotherinputsstayedthesame,andtherewereconstantreturnstoscale,productivitywould

a. falltohalfitsformervalue.

b. fallbutbylessthanhalf.

c. staythesame.

d. risebutlessthandouble.

ANSWER:b. fallbutbylessthanhalf.

TYPE:MDIFFICULTY:3SECTION:12.2

75. Ifaneconomywithconstantreturnstoscaleweretodoubleitsphysicalcapitalstock,itsavailablenaturalresources,anditshumancapital,butleavethesizeofthelaborforcethesame,

a. itsouputwouldstaythesameandsowoulditsproductivity.

b. itsoutputandproductivitywouldincrease,butlessthandouble.

c. itsouputandproductivitywouldincreasebymorethandouble.

d. Noneoftheabovearecorrect.

ANSWER:b. itsoutputandproductivitywouldincrease,butlessthandouble.

TYPE:MDIFFICULTY:3SECTION:12.2

76. U