1. CAPITALISM AND DEMOCRACY: AFFLUENCE, INEQUALITY, AND THE ENVIRONMENT.

The GDP per capita of Greece was $22,494 in 2012 and $21,966 in 2013. Based on these figures, the growth rate of GDP between 2012 and 2013 (to two decimal places) was: -2.40% 2.35% -2.35% -0.24%

-2.35%

Look again at Figure 1.15, which shows a graph of real GDP per capita for West and East Germany, Japan and Spain between 1950 and 1990. Which of the following statements is correct? Having a much lower starting point in 1950 was the main reason for East Germany's poor performance compared to West Germany. The fact that Japan and West Germany have the highest real GDP per capita in 1990 implies that they found the optimal economic system. Spain was able to grow at a higher growth rate than Germany between 1950 and 1990. The difference in East and West Germany's performance proves that capitalism always promotes rapid economic growth, while central planning is a recipe for stagnation.

Spain was able to grow at a higher growth rate than Germany between 1950 and 1990.

Look again at Figure 1.16. Which of these conclusions is suggested by the graph? The Communist Party rule in the former Soviet Union before 1990 was a complete failure. The contrasting performances of Botswana and Nigeria illustrate that rich natural resources alone do not guarantee higher economic growth, but that higher-quality institutions (government, markets, and firms) may also be necessary. The impressive performance of South Korea's economy implies that other countries should copy their economic system. The evidence from the Russian Federation and the former Soviet Union after 1990 shows that the replacement of central planning by capitalism led to immediate economic growth.

The contrasting performances of Botswana and Nigeria illustrate that rich natural resources alone do not guarantee higher economic growth, but that higher-quality institutions (government, markets, and firms) may also be necessary.

Figure 1.10 shows the productivity of labour in producing light, measured in lumen-hours per hour of labour, using different technologies. Based on this information, which of the following statements is correct? The labour productivity of producing light increased roughly linearly over the years. The productivity of labour in producing light using compact fluorescent technology is half a million times greater than with the Babylonian sesame oil lamp. The kerosene lamp in the late 1800s was more than ten times more efficient in terms of labour productivity than the tallow candles in 1830. The labour productivity of producing light roughly doubled in almost every decade between 1930 and 1970.

The kerosene lamp in the late 1800s was more than ten times more efficient in terms of labour productivity than the tallow candles in 1830. (The increase in productivity is 4,400 / 333 = 13.2 times.)

Which of the following are examples of markets? wartime food rationing auction websites such as eBay touts selling tickets outside concert halls sale of illegal arms

auction websites such as eBay touts selling tickets outside concert halls sale of illegal arms

Which of the following are examples of private property? computers belonging to your college a farmer's land in the Soviet Union (under Communist Party rule) shares in a company a worker's skills

computers belonging to your college. shares in a company.

Capitalism as an economic system can be dynamic and successful if: it allows failing firms to go bankrupt. it allows successful firms to gain market power. profits are claimed by the capitalists. the government is absent.

it allows failing firms to go bankrupt. profits are claimed by the capitalists.

Which of the following variables have followed the so-called 'hockey-stick' trajectory—that is, little to no growth for most of history followed by a sudden and sharp change to a positive growth rate? real GDP per capita labour productivity inequality atmospheric CO2

real GDP per capita labour productivity atmospheric CO2

Which of the following statements regarding Adam Smith are correct? Adam Smith believed in the role of the government to improve societal welfare. Adam Smith believed that all markets were characterized by perfect competition. Adam Smith advocated that economic agents were guided entirely by self-interest. Adam Smith claimed that coordination among a large number of economic actors (producers, transporters, sellers, consumers), often unknown to one another, might spontaneously arise without any person or institution consciously attempting to create or maintain it.

Adam Smith believed in the role of the government to improve societal welfare. Adam Smith claimed that coordination among a large number of economic actors (producers, transporters, sellers, consumers), often unknown to one another, might spontaneously arise without any person or institution consciously attempting to create or maintain it.

The following graphs show the real GDP per capita of four countries, plotted according to the linear scale and ratio scale respectively. Based on this information, which of the following statements are correct? Country B's real GDP per capita grew at a constant rate. Over the 10 years shown, Country A's real GDP per capita grew at the fastest rate, on average. Over the 10 years shown, Country D's real GDP per capita grew at the slowest rate, on average. Country C's real GDP per capita grew at a constant rate.

Country B's real GDP per capita grew at a constant rate. Over the 10 years shown, Country D's real GDP per capita grew at the slowest rate, on average.

Figure 1.21 shows the northern hemisphere's temperature since year 1000, reported as the deviation from the 1961-1990 mean temperature. Based on this information, which of the following statements is correct? The 1961-1990 mean temperature was 0.2 to 0.6 degrees higher than the temperatures between 1450 and 1900. The negative numbers on the graph indicate that the temperature consistently fell between 1100 and 1900. A consistent rise in temperature is only a post-1980 phenomenon. The consistent rise in temperature after 1980 suggests that temperatures will continue to rise in every year following 2000.

The 1961-1990 mean temperature was 0.2 to 0.6 degrees higher than the temperatures between 1450 and 1900.