Macro Econ: Lesson 3

d. All of the above are correct.

"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 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.

b. real GDP per person.

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. the increase in output was greater last year than this year.

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, a. the increase in output was greater for this year than last year. b. the increase in output was greater last year than this year. c. the increase in output is the same in both years. d. None of the above is necessarily correct.

a. the United Kingdom

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? a. the United Kingdom b. Mexico c. Argentina d. China

b. increase growth more for a poor country than for a rich country, but raise growth temporarily.

An increase in the saving rate would, other things the same, a. increase growth more for a poor country than for a rich country, and raise growth permanently. b. increase growth more for a poor country than for a rich country, but raise growth temporarily. c. increase growth more for a rich country than for a poor country, and raise growth permanently. d. increase growth more for a rich country than for a poor country, but raise growth temporarily.

b. Mary's productivity is higher than Sue's.

Each day Sue works 8 hours and produces 7 units of goods and services. Mary works 10 hours each day and produces 10 units of goods and services. It follows that a. Sue's productivity is higher than Mary's. b. Mary's productivity is higher than Sue's. c. Sue's income per hour will be higher than Mary's. d. Sue's income per day will be higher than Mary's.

d. increases in the capital stock increase output by ever smaller amounts.

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.

a. decreased by 8%.

In 2010, Acme Foods produced 300,000 bags of pretzels, employing 12,000 hours of labor. In 2011, it produced 322,000 bags of pretzels, employing 14,000 hours of labor. Acme Foods productivity a. decreased by 8%. b. was unchanged. c. increased by 6.8%. d. increased by 7.3%.

c. 4 percent, which is high compared to average U.S. growth over the last one-hundred years.

In 2010, the imaginary nation of Mainland had a population of 6,000 and real GDP of 120,000. In 2011 the population was 6,200 and real GDP of 128,960. Over the year in question, real GDP per person in Mainland 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.

d. the relevant production function has the constant-returns-to-scale property

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that a. the production process cannot be enhanced by technological advances. b. no mathematical representation of the relevant production function can be formulated. c. the relevant production function has the limits-to-growth property. d. the relevant production function has the constant-returns-to-scale property

a. 1/3 laptop per hour

In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity? a. 1/3 laptop per hour b. 3 hours per laptop c. 1200 laptops d. 400 laptops

d. The level of productivity must increase.

In order for the standard of living within a country to be enhanced over time, which of the following is essential? a. The role of the country's government in the economy must become larger. b. The population of the country must increase. c. More domestic natural resources must be discovered and used. d. The level of productivity must increase.

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

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.

a. A

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N). Refer to Scenario 25-1. In the production function, which of the following represents technology? a. A b. K c. H d. N

d. gradually raise the level of real GDP per person

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

b. is positive and gets flatter as capital per worker rises

The slope of the production function with capital per worker on the horizontal axis and output per worker on the vertical axis a. is positive and gets steeper as capital per worker rises. b. is positive and gets flatter as capital per worker rises. c. is negative and gets steeper as capital per worker rises. d. is negative and gets flatter as capital per worker rises.

c. for a restaurant: the chefs' knowledge about preparing food and the equipment in the kitchen

Which of the following are human capital and physical capital, respectively? a. for a brick layer: her bricks and her tools b. for a gas station: the pumps and the cash register c. for a restaurant: the chefs' knowledge about preparing food and the equipment in the kitchen d. for a medical office: the building and the doctors' knowledge of medicine