Chapter 25 (HW 5)

13. 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. a. Country A has higher productivity and higher real GDP per person than country B. b. Country A has lower productivity and lower real GDP per person than country B. c. Country A has higher productivity, but lower real GDP per person than country B. d. Country B has lower productivity, but higher real GDP per person than country B.

b. Country A has lower productivity and lower real GDP per person than country B.

9. 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.

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

c. 2 rocking chairs per hour

19. Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of a. increasing returns to capital. b. increasing returns to labor. c. diminishing returns to capital. d. diminishing returns to labor.

c. diminishing returns to capital.

7. Productivity is defined as the quantity of a. labor required to produce a nation's GDP. b. labor required to produce one unit of goods and services. c. goods and services produced from each unit of labor input. d. goods and services produced per unit of time.

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

15. 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 most natural resources have been stable or fallen over time. d. inflation-adjusted prices of most natural resources have risen over time.

c. inflation-adjusted prices of most natural resources have been stable or fallen over time.

16. 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.

14. The behavior of market prices over time indicates that natural resources are a. a limit to economic growth. b. unrelated to economic growth. c. not a limit to economic growth. d. the major determinant of productivity.

c. not a limit to economic growth

3. Which of the following is a good gauge of economic progress? a. the level of real GDP per person, but not the growth rate of real GDP per person b. the level of real GDP per person and the growth rate of real GDP per person c. the growth rate of real GDP per person, but not the level of real GDP per person d. neither the level nor the growth rate of real GDP per person

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

2. 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. the productivity of its workers.

6. 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. 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.

20. Refer to Figure 25-1. The shape of the curve is consistent with which of the following statements about the economy to which the curve applies? a. In the long run, a higher saving rate leads to a higher level of productivity. b. In the long run, a higher saving rate leads to a higher level of income. c. In the long run, a higher saving rate leads to neither a higher growth rate of productivity nor a higher growth rate of income. d. All of the above are correct.

d. All of the above are correct.

11. Suppose that real GDP grew more in Country A than in Country B last year. a. Country A must have a higher standard of living than country B. b. Country A's productivity must have grown faster than country B's. c. Both of the above are correct. d. None of the above are correct.

d. None of the above are correct.

4. 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.

10. 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.

17. Human capital is a. the same thing as technological knowledge. b. the same thing as labor. c. the tools and equipment operated by humans. d. knowledge and skills that workers have acquired.

d. knowledge and skills that workers have acquired.

18. The production function for Country A exhibits constant returns to scale. Suppose that physical capital per worker, human capital per worker, and natural resources per worker all triple. At the same time, Country A's technological knowledge doubles. Productivity a. does not change. b. ​is now two times larger. c. ​is now three times larger. d. ​is now six ties larger.

d. ​is now six ties larger.

1. 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. produced for each hour of a worker's time. It is linked to a nation's economic policies.

8. The key determinant of the standard of living in a country is a. the amount of goods and services produced from each hour of a worker's time. b. the total amount of goods and services produced within the country. c. the total amount of its physical capital. d. its growth rate of real GDP.

a. the amount of goods and services produced from each hour of a worker's time.

5. ​The rate of real economic growth a. ​is underestimated using measures of income growth. b. ​​is overestimated using measures of income growth. c. ​​is underestimated using measures of technological growth. d. ​​​is overestimated using measures of technological growth.

a. ​is underestimated using measures of income growth