Chapter 25 Production and Growth

1、Which of the following statements is correct? _________

A、The level of real GDP is a good gauge of economic prosperity, and the growth
of real GDP is a good gauge of economic progress
B、The level of real GDP is a good gauge of economic progress, and the level of
real GDP per person is a good gauge of economic prosperity
C、The level of real GDP is a good gauge of economic progress, and the growth of
real GDP is a good gauge of economic prosperity
D、The level of real GDP is a good gauge of economic prosperity, and the level of
real GDP per person is a good gauge of economic progress

2、All else equal, if there are diminishing returns, then if a country raised its capital
by 100 units last year and by 100 units this year, ____B_____

A、the increase in output is the same in both years

B、the increase in output was greater for this year than last year
C、None of the other is necessarily correct
D、the increase in output was greater last year than this year

3 、 If there are constant returns to scale, the production function can be written
as____A_____

A、Y/L = A F( 1, K/L, H/L, N/L)

B、Y/L = A F(xL, xK, xH, xN)
C、xY = 2xAF(L, K, H, N)
D、L = AF(Y, K, H, N)

4 、 An economy’s production form takes the form Y = AF(L, K, H, N). If the

production function has the constant-returns-to-scale property, then it is possible that
the specific form of the production function is___D______

A、Y = 4L + 2K + 3H + N
B、Y = 4
C、Y = (L + K + H + N)/4
D、Y =2

5 、 The equipment and structures available to produce goods and services are
called____D_____

A、human capital
B、technology
C、the production function
 D、physical capital

6 、 The quantity of goods and services produced from each unit of labor input is
called___C______

A、the knowledge base

B、capitalized quantity
C、productivity
D、standard of living

7 、 In 8 hours, Sonja produces 8 units of goods and services. In 10 hours, Emma

produces 9 units of goods and services. It follows that ____B_____

A、Emma’s income per hour will be higher than Sonja’s

B、Sonja’s productivity is higher than Emma’s
C、Emma’s productivity is higher than Sonja’s
D、Sonja’s income per day will be higher than Emma’s

8、Country A has a population of 1,000, of whom 700 worked an average of 8 hours

a day and had a productivity of 2.5. Country B has a population of 800, of whom 560
worked 8 hours a day and had productivity of 3.0. The country with the higher real
GDP was ___C______

A、country B; and the country with higher real GDP per person was country A
B、country A; and the country with higher real GDP per person was country B
C、country A; and the country with higher real GDP per person was country A
D、country B; and the country with higher real GDP per person was country B

9、In the country of Suchnott, the price of silver increased from $30 per ounce to $32
per ounce during a time when the overall price level increased by 5 percent. During
this period, the real price of silver____A_____

A、increased
B、stayed the same
C 、 might have increased, decreased or stayed the same; more information is
needed to be sure
D、decreased

10、Consider two countries. Country A has a population of 1,000, of whom 800 work
8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of
whom 1,800 work 6 hours a day to make 270,000 final goods.____C_____

A、Country B has lower productivity, but higher real GDP per person than country
B
 B、Country A has higher productivity, but lower real GDP per person than country
B
C、Country A has lower productivity and lower real GDP per person than country
B
D、Country A has higher productivity and higher real GDP per person than country
B

11、Other things the same, higher population growth _A________

A、reduces the amount of physical capital per worker, but there is some evidence
that it raises the pace of technological progress
B 、raises the amount of physical capital per worker, but there is some evidence
that it reduces the pace of technological progress
C、reduces the amount of physical capital per worker and there is some evidence
that it reduces the pace of technological progress
D 、raises the amount of physical capital per worker and there is some evidence
that it raises the pace of technological progress

12、The notion that our ability to conserve natural resources is growing more rapidly
than their supplies are dwindling is supported by the fact that____C_____

A、the quantity of natural resources does not enter into any production function
B、inflation-adjusted prices of natural resources are rising over time
C、inflation-adjusted prices of natural resources are stable or falling over time
D 、 most economists do not regard the availability of natural resources as a
determinant of productivity

13、By saving more, a country__A_______

A 、 has more resources for capital goods. The increase in capital reduces
productivity
B 、 has fewer resources for capital goods. The decrease in capital reduces
productivity
C 、 has fewer resources for capital goods. The decrease in capital raises
productivity
D、has more resources for capital goods. The increase in capital raises productivity

14 、 An economy’s production form takes the form Y = AF(L, K, H, N). In the

production function, which variable would increase in value as technology improved?
___D______

A、H
B、K
C、N
 D、A

15 、 Economists differ in their views of the role of the government in promoting

economic growth. At the very least, the government should____A_____

A、lend support to the invisible hand by maintaining property rights and political
stability
B、limit foreign investment to industries that don't already exist in the country
C 、 impose trade restrictions to protect the interests of domestic producers and
consumers
D、subsidize key industries

16、In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor.
What was their productivity?____B_____

A、40 cabinets
B、1/8 cabinet per hour
C、8 hours per cabinet
D、None of the other is correct

17、You bake cookies. One day you double the time you spend, double the number of
chocolate chips, flour, eggs, and all your other inputs, and bake twice as many
cookies. Your cookie production function has____D_____

A、decreasing returns to scale

B、zero returns to scale
C、increasing returns to scale
D、constant returns to scale

18、In an economy where net exports are zero, if saving rises in some period, then in
that period_____A____

A、consumption and investment rises

B、consumption falls and investment rises
C、consumption and investment fall
D、consumption rises and investment falls

19、Which of the following is an example of the "brain drain?"___C______

A、A country steals patented technology from another country

B 、 A country has such a poor educational system that human capital falls over
time
C、A country's most highly educated workers emigrate to rich countries
D 、 The population of a country grows so fast that the educational system can't
keep up

20、Which of the following is correct?____C_____

A、Productivity is not closely linked to government policies

B、Productivity may be measured by the growth rate of real GDP per person
C、The level of real GDP per person is a good gauge of economic prosperity, and
the growth rate of real GDP per person is a good gauge of economic progress
D 、 Although levels of real GDP per person vary substantially from country to
country, the growth rate of real GDP per person is similar across countries