Chapter 25

Which of the following is a correct way to measure productivity? a. Divide the number of hours worked by the quantity of output. b. Divide the quantity of output by the number of hours worked. c. Divide the quantity of output by the quantity of physical capital. d. Divide the change in the quantity of output by the change in the number of hours worked.

b. Divide the quantity of output by the number of hours worked

In 2007, the imaginary nation of Freedonia had a population of 2,700 and real GDP of 16,200,000. In 2008 it had a population of 2,500 and real GDP of 14,640,000. What was the growth rate of real GDP per person in Freedonia between 2007 and 2008? a. -2.4 percent b. -0.7 percent c. 4.4 percent d. 5.2 percent

a. -2.4 percent

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was their productivity? a. 1/8 cabinet per hour b. 8 hours per cabinet c. 40 cabinets d. None of the above is correct.

a. 1/8 cabinet per hour

In 2006 real GDP in the imaginary nation of Populia was 750 billion and the population was 3 million. In 2007 real GDP was 907.5 billion and the population was 3.3 million. What was the growth rate of real GDP per person during the year? a. 10 percent b. 14 percent c. 17 percent d. 21 percent

a. 10 percent

In some East Asian countries, average income, as measured by real GDP per person, has recently grown at an average annual rate that implies output will double about every a. 10 years. b. 15 years. c. 20 years. d. 25 years.

a. 10 years.

Cedar Valley Furniture uses 5 workers, each working 8 hours, to produce 80 rocking chairs. What is the productivity of these workers? a. 2 chairs per hour b. 10 chairs per hour c. 1 hour per chair d. 80 chairs

a. 2 chairs per hour

Which of the following statements about inputs is correct? a. A forest is an example of a natural resource; it is also an example of a renewable resource. b. There is no distinction between human capital and technological knowledge. c. Human capital is a non-produced factor of production. d. Physical capital is a non-produced factor of production.

a. A forest is an example of a natural resource; it is also an example of a renewable resource

Which of the following countries had the highest growth rate over the last 100 or so years? a. Brazil b. Germany c. Canada d. United States

a. Brazil

Which list contains, in this order, a country whose real GDP per person grew faster and one whose real GDP per person grew slower than real GDP per person in the U.S. over the last 100 years? a. China, Pakistan b. United Kingdom, China c. Pakistan, Argentina d. Argentina, Japan

a. China, Pakistan

Which of the following is indicated by the data on real income per person for various countries over the past 100 or so years? a. If, in a relatively poor country, real income per person had grown by 3.5 percent per year for the last 100 years, it would be a relatively rich country today. b. Rich countries became richer and poor countries became poorer. c. In the United States, real income per person today is about four times as high as it was 100 years ago. d. All of the above are correct.

a. If, in a relatively poor country, real income per person had grown by 3.5 percent per year for the last 100 years, it would be a relatively rich country today

Which of the following statements is correct? a. In 1870, real income per person was higher in the United Kingdom than in any other country at that time. b. Between 1870 and 2006, India experienced significantly stronger growth of real income per person than did the United States. c. Between 1870 and 2006, the United States experienced significantly stronger growth of real income per person than did Canada. d. All of the above are correct.

a. In 1870, real income per person was higher in the United Kingdom than in any other country at that time.

Which of the following countries had the lowest level of real GDP per person in 2006? a. Pakistan b. Indonesia c. Mexico d. China

a. Pakistan

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 growth of real GDP is a good gauge of economic prosperity. c. 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. d. 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.

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.

Industrial machinery is an example of a. a factor of production that in the past was an output from the production process. b. technological knowledge. c. a production function. d. an item which always has the property called constant returns to scale.

a. a factor of production that in the past was an output from the production process.

25. In 2007, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours per day. In 2008, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per day. Between 2007 and 2008, productivity at Modern Electronics a. decreased by 4.00 percent. b. remained constant. c. increased by 8.33 percent. d. increased by 27.50 percent.

a. decreased by 4.00 percent.

You are told that Country A experienced growth of real GDP per person of 4 percent per year throughout the 1900s. In view of other countries' experience, you would have to characterize Country A's growth as a. exceptionally high. b. moderately high. c. moderateely low. d. exceptionally low.

a. exceptionally high.

What term do economists use to describe the relationship between the quantity of inputs used and the quantity of output produced? a. production function b. input function c. capital function d. returns to scale

a. production function

The one variable that stands out as the most significant explanation of large variations in living standards around the world is a. productivity. b. population. c. preferences. d. prices.

a. productivity.

Which of the following does the level of real GDP measure? a. total real income b. productivity c. the standard of living d. All of the above are correct.

a. total real income

Over the past century in the United States, real GDP per person has grown, on average, by about a. 1 percent per year. b. 2 percent per year. c. 3 percent per year. d. 5 percent per year.

b. 2 percent per year

Over the last century, U.S. real GDP per person grew at a rate of about a. 2 percent per year, so that it is now 2 times as high as it was a century ago. b. 2 percent per year, so that it is now 8 times as high as it was a century ago. c. 4 percent per year, so that it is now 2 times as high as it was a century ago. d. 4 percent per year, so that it is now 8 times as high as it was a century ago.

b. 2 percent per year, so that it is now 8 times as high as it was a century ago.

In 2006, the imaginary nation of Viloxia had a population of 5,000 and real GDP of 500,000. In 2007 it had a population of 5,100 and real GDP of 520,200. Over the year in question, real GDP per person in Viloxia grew by a. 2 percent, which is high compared to average U.S. growth over the last one-hundred years. b. 2 percent, which is about the same as average U.S. growth over the last one-hundred years. c. 4 percent, which is high compared to average U.S. growth over the last one-hundred years. d. 4 percent, which is about the same as average U.S. growth over the last one-hundred years.

b. 2 percent, which is about the same as average U.S. growth over the last one-hundred years.

11. In 2006, the typical Bangladeshi had about a. 1/5 the real income of a typical American a century ago. b. 2/3 the real income of a typical American a century ago. c. 2 times as much real income as that of a typical American a century ago. d. 4 times as much real income as that of a typical American a century ago.

b. 2/3 the real income of a typical American a century ago.

3. As of 2006, using real GDP per person as a measure, we would classify a. the United States and Mexico as advanced economies and Bangladesh as a middle-income country. b. Canada as an advanced economy, Mexico as a middle-income country, and Mali as a poor country. c. Japan and India as advanced economies and Mexico as a poor country. d. Japan as an advanced economy, the United Kingdom as a middle-income country, and Argentina as a poor country.

b. Canada as an advanced economy, Mexico as a middle-income country, and Mali as a poor country.

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over the last 100 or so years? a. Germany and Japan b. Indonesia and the United Kingdom c. the United States and Japan d. Mexico and Pakistan

b. Indonesia and the United Kingdom

Despite its status as one of the richest countries in the world, Japan a. has a very low level of productivity. b. has few natural resources. c. has very little human capital. d. engages in a relatively small amount of international trade.

b. has few natural resources

For a given year, productivity in a particular country is most closely matched with that country's a. level of real GDP over that year. b. level of real GDP divided by hours worked over that year. c. growth rate of real GDP divided by hours worked over that year. d. growth rate of real GDP per person over that year.

b. level of real GDP divided by hours worked over that year.

The quantity of goods and services produced from each unit of labor input is called a. standard of living. b. productivity. c. capitalized quantity. d. the knowledge base.

b. productivity

The average income in a rich country, such as the United States or Japan, is more than a. 3 times, but less than 5 times, the average income in a poor country, such as Indonesia or Nigeria. b. 5 times, but less than 10 times, the average income in a poor country, such as Indonesia or Nigeria. c. 10 times, but less than 20 times, the average income in a poor country, such as Indonesia or Nigeria. d. more than 20 times the average income in a poor country, such as Indonesia or Nigeria.

c. 10 times, but less than 20 times, the average income in a poor country, such as Indonesia or Nigeria.

Over the past century in the United States, average income as measured by real GDP per person has grown about a. 4 percent per year, which implies a doubling about every 18 years. b. 4 percent per year, which implies a doubling about every 8 years. c. 2 percent per year, which implies a doubling about every 35 years. d. 2 percent per year, which implies a doubling about every 18 years.

c. 2 percent per year, which implies a doubling about every 35 years.

During the past century the average growth rate of U.S. real GDP per person implies that it doubled, on average, about every a. 100 years. b. 70 years. c. 35 years. d. 25 years.

c. 35 years.

A barber shop produces 96 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shop's productivity is 3 haircuts per hour of labor, then how many barbers does the shop employ? a. 2 b. 3 c. 4 d. 6

c. 4

30. Last year real GDP per person in the imaginary nation of Olympus was 4,500. The year before it was 4,250. By about what percentage did Olympian real GDP per person grow during the period? a. 4.6 percent b. 5.2 percent c. 5.9 percent d. 6.5 percent

c. 5.9 percent

In recent decades, average income in some East Asian countries, such as South Korea, Singapore, and Taiwan, has risen about a. 2 percent per year. b. 4 percent per year. c. 7 percent per year. d. 10 percent per year.

c. 7 percent per year.

Over the last 100 years which of the following had growth rates higher than that of the United States? a. the United Kingdom b. Bangladesh c. Brazil d. None of the above is correct.

c. Brazil

Average income has been stagnant for many years in a. Ireland. b. Singapore. c. Ethiopia. d. All of the above are correct.

c. Ethiopia.

Average income has been stagnant for many years in a. Argentina. b. Singapore. c. Nigeria. d. All of the above are correct.

c. Nigeria

Last year Panglossia had real GDP of 27.0 billion. This year it had real GDP of 31.5 billion. Which of the following changes in population is consistent with a 5 percent growth rate of real GDP per person over the last year? a. The population decreased from 88 million to 84 million. b. The population decreased from 75 million to 73 million. c. The population increased from 45 million to 50 million. d. The population increased from 60 million to 62 million.

c. The population increased from 45 million to 50 million.

Which of the following is not correct? a. Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life. b. With a growth rate of about 2 percent per year, average income per person doubles about every 35 years. c. The ranking of countries by average income changes very little over time. d. In some countries real income per person has changed very little over many years.

c. The ranking of countries by average income changes very little over time

Which of the following is correct? a. Countries with the highest growth rates over the last 100 years are the ones that had the highest level of real GDP 100 years ago. b. Most countries have had little fluctuation around their average growth rates during the past 100 years. c. The ranking of countries by income changes substantially over time. d. Over the last 100 years, Japan had the highest real GDP growth rate, and now has the highest real GDP per person.

c. The ranking of countries by income changes substantially over time.

In determining living standards, productivity plays a key role a. for individuals, but not for nations. b. for nations, but not for individuals. c. for both nations and individuals. d. for neither nations nor individuals.

c. for both nations and individuals

Nathan owns a bakery that bakes only cakes. All of his bakers work 8 hours per day. In 2006, he employed 5 bakers and they produced 200 cakes each day. In 2007, he employed 6 bakers and they produced 249 cakes each day. In Nathan's bakery, productivity a. decreased by 2.33 percent between 2006 and 2007. b. increased by 2.33 percent between 2006 and 2007. c. increased by 3.75 percent between 2006 and 2007. d. increased by 24.50 percent between 2006 and 2007.

c. increased by 3.75 percent between 2006 and 2007.

The notion that our ability to conserve natural resources is growing more rapidly than their supplies are dwindling is supported by the fact that a. most economists do not regard the availability of natural resources as a determinant of productivity. b. the quantity of natural resources does not enter into any production function. c. inflation-adjusted prices of natural resources are stable or falling over time. d. inflation-adjusted prices of natural resources are rising over time.

c. inflation-adjusted prices of natural resources are stable or falling over time.

Technological knowledge 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.

c. is a determinant of productivity.

The average amount of goods and services produced from each hour of a worker's time is called a. GDP. b. per capita GDP. c. productivity. d. technological knowledge.

c. productivity

In 1870, the richest country in the world was a. the United States. b. Spain. c. the United Kingdom. d. Germany.

c. the United Kingdom.

Productivity is defined as a. the amount of difficulty that is involved in producing a given quantity of goods and services. b. the quantity of labor that is required to produce one unit of goods and services. c. the quantity of goods and services produced from each unit of labor input. d. the quantity of goods and services produced over a given amount of time.

c. the quantity of goods and services produced from each unit of labor input.

You and your friend work together for 4 hours to produce a total of 12 futons. What is productivity? a. 12 futons b. 24 futons c. 3 futons per hour of labor d. 1.5 futons per hour of labor

d. 1.5 futons per hour of labor

Over the past 100 years, U.S. real GDP per person has doubled about every 35 years. If, in the next 100 years, it doubles every 25 years, then a century from now U.S. real GDP per person will be a. 4 times higher than it is now. b. 8 times higher than it is now. c. 12 times higher than it is now. d. 16 times higher than it is now.

d. 16 times higher than it is now.

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million. The year before, real GDP was 500.0 billion and the population was 2.0 million. What was the growth rate of real GDP per person during the year? a. 12 percent b. 10 percent c. 4 percent d. 2 percent

d. 2 percent

Countries that grew the fastest over the last 100 or so years had growth rates of real income per person of about a. 0.5 percent per year. b. 1.5 percent per year. c. 2.0 percent per year. d. 2.5 percent per year.

d. 2.5 percent per year.

In the United States, as measured by real GDP per person, average income is about how many times as high as average income a century ago? a. 2 b. 4 c. 6 d. 8

d. 8

Which of the following items plays a role in determining productivity? a. physical capital b. natural resources c. technological knowledge d. All of the above are correct.

d. All of the above are correct

Industrial machinery is an example of a. a factor of production that in the past was an output from the production process. b. physical capital. c. something that influences productivity. d. All of the above are correct.

d. All of the above are correct.

Which of the following nations experienced average rates of economic growth of less than 2 percent over the last 100 years? a. Bangladesh b. Pakistan c. United Kingdom d. All of the above are correct.

d. All of the above are correct.

Which of the following statements is correct? In 2006, a. real income per person in the U.S. was about 6 times that in China. b. real income per person in China was about 2 times that in India. c. the typical resident of India had less real income than the typical resident of England in 1870. d. All of the above are correct.

d. All of the above are correct.

Over the period 1900-2006, which of the following countries experienced the highest average annual growth rate of real GDP per person? a. Indonesia b. India c. Pakistan d. Brazil

d. Brazil

Which of the following statements is correct? 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.

d. Differences in natural resources can explain some of the differences in standards of living around the world.

Which of the following is correct? a. Over the last 100 years Japan had a higher average growth rate than the United States. It follows that, today, the standard of living in Japan is higher than in the United States. b. The typical person in Bangladesh today has about twice the real income of a typical American 100 years ago. c. The typical citizen of China today has about one-half as much real income as the typical citizen of America today. d. None of the above is correct

d. None of the above is correct

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world? a. India b. Mexico c. Nigeria d. Singapore

d. Singapore

In the length of one generation, which of the following countries has gone from being among the poorest countries in the world to being among the richest? a. Chad b. Ethiopia c. India d. South Korea

d. South Korea

Of the following countries, which grew most slowly, in terms of real GDP per person, over the last 100 years? a. Brazil b. Mexico c. China d. United States

d. United States

The level of real GDP person a. differs widely across countries, but the growth rate of real GDP per person is similar across countries. b. is very similar across countries, but the growth rate of real GDP per person differs widely across countries. c. and the growth rate of real GDP per person are similar across countries. d. and the growth rate of real GDP per person vary widely across countries.

d. and the growth rate of real GDP per person vary widely across countries.

You are told that Country A experienced growth of real GDP per person of 0.5 percent per year throughout the 1900s. In view of other countries' experience, you would have to characterize Country A's growth as a. exceptionally high. b. moderately high. c. moderately low. d. exceptionally low.

d. exceptionally low.

Productivity a. is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries. b. explains very little of the differences in the standard of living across countries. c. explains some, but not most of the differences in the standard of living across countries. d. explains most of the differences in the standard of living across countries.

d. explains most of the differences in the standard of living across countries.

If one wants to know how the material well-being of the average person has changed over time in a given country, one should look at the a. level of real GDP. b. growth rate of nominal GDP. c. growth rate of real GDP. d. growth rate of real GDP per person.

d. growth rate of real GDP per person.

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists include these skills as part of Perry's a. standard of learning. b. technological knowledge. c. physical capital. d. human capital.

d. human capital.

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

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.

In 2006, real GDP per person in Bangladesh was a. about 3 times as high as it was in the U.S. in 1870. b. about twice as high as it was in the U.S. in 1870. c. about the same as it was in the U.S. in 1870. d. less than it was in the U.S. in 1870.

d. less than it was in the U.S. in 1870.

Which of the following is a good gauge of economic progress?

the growth rate of real GDP per person, but not the level of real GDP per person