MAC CH 12

A country's human capital increases a. if its workers become better educated or healthier. b. only if its workers become better educated. c. only if its workers become healthier. d. None of the above is correct.

a

Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct? a. Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. b. Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. c. Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. d. Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has.

a

An organization that tries to encourage the flow of investment to poor countries is the a. World Bank. b. Organization of Less Developed Countries. c. Alliance of Developing Countries. d. International Development Alliance

a

Government corruption a. impedes the coordinating power of markets and discourages investment. b. impedes the coordinating power of markets but does not discourage investment. c. does not impede the coordinating power of markets, but does discourage investment. d. can neither impede the coordinating power of markets nor discourage investment

a

Human capital is the a. knowledge and skills that workers acquire through education, training, and experience. b. stock of equipment and structures that is used to produce goods and services. c. total number of hours worked in an economy. d. same thing as technological knowledge

a

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in a. foreign portfolio investment. b. indirect domestic investment. c. foreign direct investment. d. foreign indirect investment

a

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real GDP was 750 billion and the population was 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

Productivity is the 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 standard

a

Which of the following is an example of the "brain drain?" a. A country's most highly educated workers emigrate to rich countries. b. A country has such a poor educational system that human capital falls over time. c. The population of a country grows so fast that the educational system can't keep up. d. A country steals patented technology from another country

a

"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement a. is an assertion that production functions have the property of constant returns to scale. b. is consistent with the view that capital is subject to diminishing returns. c. is inconsistent with the view that it is easier for a country to grow fast if it starts out relatively poor. d. All of the above are correct.

b

A nation's standard of living is best measured by its a. real GDP. b. real GDP per person. c. nominal GDP. d. nominal GDP per person

b

Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of 16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About what was the growth rate of real GDP per person between last year and this year? a. -5.3 percent b. -5 percent c. 5 percent d. 5.3 percent

b

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. It requires that society a. conserve resources for future generations. b. sacrifice consumption goods and services now in order to enjoy more consumption in the future. c. recycle resources so that future generations can produce goods and services with the accumulated capital. d. None of the above is correct.

b

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. Determine how much output is produced in a given time. d. Determine how much time it takes to produce a unit of output.

b

Which of the following is generally an opportunity cost of investment in human capital? a. future job security b. forgone current wages c. increased earning potential d. All of the above are correct

b

A nation's standard of living is determined by a. the percentage of its GDP that is accounted for by government purchases. b. the quantity of natural resources with which it is endowed. c. the productivity of its workers. d. factors and events that are beyond the nation's control.

c

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in a. foreign portfolio investment. b. foreign financial investment. c. foreign direct investment. d. indirect foreign investment

c

In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity? a. 4000 pounds of laundry per hour b. 500 pounds of laundry per hour c. 100 pounds of laundry per hour d. None of the above is correct.

c

Patents turn new ideas into a. public goods, and increase the incentive to engage in research. b. public goods, but decrease the incentive to engage in research. c. private goods, and increase the incentive to engage in research. d. private goods, but decrease the incentive to engage in research.

c

Phoenix furniture uses 12 workers, each working eight hours, to produce 192 rocking chairs. What is Phoenix's productivity? a. 192 rocking chairs per hour b. 24 rocking chairs per hour c. 2 rocking chairs per hour d. 2 hours per rocking chair

c

Which of the following is correct? a. 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. b. Productivity is not closely linked to government policies. 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. Productivity may be measured by the growth rate of real GDP per person

c

Which of the following is not an example of physical capital? a. a new factory building b. a delivery van c. the knowledge of workers d. the office chair in a lawyer's office

c

According to studies using international data, an increase in the saving rate a. does not increase the growth rate of output. b. increases the growth rate of output for a few years. c. increases the growth rate of output for about a decade. d. increases the growth rate of output for several decades

d

Educated people may generate ideas that increase production. These ideas a. produce a return to society from education that is greater than the return to the individual. b. could justify government subsidies for education. c. are external benefits of education. d. All of the above are correct.

d

If there are diminishing returns to capital, then a. capital produces fewer goods as it ages. b. old ideas are not as useful as new ones. c. increases in the capital stock eventually decrease output. d. increases in the capital stock increase output by ever smaller amounts

d

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

Other things the same, an increase in population growth a. increases capital per worker. Further, there is some evidence that a higher population growth rate may increase the pace of technological progress. b. increases capital per worker. However, there is some evidence that a higher population growth rate may decrease the pace of technological progress. c. decreases capital per worker. Further, there is some evidence that a higher population growth rate may decrease the pace of technological progress. d. decreases capital per worker. However, there is some evidence that a higher population growth rate may increase the pace of technological progress.

d

Productivity is the amount of goods and services a. an economy produces. It is not linked to a nation's economic policies. b. an economy produces. It is linked to a nation's economic policies. c. produced for each hour of a worker's time. It is not linked to a nation's economic policies. d. produced for each hour of a worker's time. It is linked to a nation's economic policies

d

Rapid population growth a. was hailed by Thomas Robert Malthus as the key to future economic growth. b. tends to lead to higher levels of educational attainment c. is the main reason that less developed nations are poor. d. may depress economic prosperity by reducing the amount of capital which each worker has to work with.

d

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