Econ 202 Quiz 10
A certain production process requires two types of inputs
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How to calculate GDP Growth rate
(GDP year 2/GDP Year 1)-1
Real GDP per person is 10,000 in Country A, 20,000 in Country B, and 30,000 in Country C. The saving rate increases by the same rate in all three countries. Other things equal, we would expect that
Country A will grow the fastest
The traditional view of the production process is that capital is subject to
Diminishing returns
The curve becomes flatter because of
Diminishing returns to capital
The traditional view of the production process is that capital is subject to
Diminishing returns, so that other things the same, real gdp in poor countries should grow at a faster rate than in rich countries
Matt is going to college to become a pharmacist. What he learns about existing information increases
Human capital but not technological knowledge
Suppose a U.S. automaker builds and operates a new factory in Italy. Future production from such an investment will
Increase Italian GDP more than it increases Italian GNP
Suppose Japanese-based Toshiba corporation builds and operates a new computer factory in the United States. Future production from such investment will
Increases U.S. GDP more than it increases U.S. GNP
Technological Knowledge
Is a determinant of productivity
In a market economy, we know that a resource has become scarcer when
Its price rises relative to other prices
Country A and Country B are the same except country A currently has more capital.
Output in country A inreasese by less than in Country B
The one variable that stands out as the most significant explanation of large variations on living standards around the wrold is
Productivity
If a country's saving rate increases then in the long run
Productivity and real GDP per person are both higher
Which of the following is correct?
Productivity and standard of living are better in Athens than Troy
Calculate real GDP and GDP per person (capita)
Real GDP: (quantity *Price) Real GDP per person = Real GDP/Population
The shape of the curve in consistent with which of the following statements about the economy to which the curve applies?
Returns to capital become increasingly smaller as the amount of capital per worker increases
Which of the following is an example of human capital?
The things you have learned this semester
Janet is a farmer. Which of the following are included in her human capital?
What she's learned from experience but not her tractor
Popeye and Wimpy question
Wimpy's production is greater than Popeye's, but his productivity is less
If an inexpensive alternative to oil were found, the price of oil adjusted for inflation
Would decline as the alternative would reduce the demand for oil
In medieval Europe and important technological advance was the use of the padded horse collar for plowing. Once the idea was thought of, other people used it. This illustrates that knowledge is generally a
a public good
Industrial Machinery is an example of
all of the above are correct
Which of the following is a determinant of productivity
all of the above are correct
Which of the following is considered human capital? Knowledge acquired from
all of the above are correct
An increase in a country's population may contribute to the rate of technological progress because a larger population
brings with it more scientists, inventors, and engineers
Which of the following is an example of physical capital
bulldozers, backhoes and other construction equipment
You sell cupcakes. One day you double the time you spend and double all your inputs, and make twice as many cupcakes. Your cupcake production function has
constant returns to scale
Turan dictator farming question
fall and remain lower for a long time
In determining living standards, productivity plays a key role
for both nations and individuals
Which of the following is generally an opportunity cost of investment in human capital
forgone present wages
The return to schooling for society is higher than the return to schooling for the individual if
human capital conveys positive externalities
A country's human capital increases
if its workers become better educated or healthier
If your firm's production function has constant returns to scale and you increase all your inputs by 60 % then your firm's output will
increase by 60%
On a production function, as capital per worker increases, output per worker
increases. the increases is smaller at large values of capital per worker
The catch-up effect refers to the idea that
it is easier for a country to grow fast and so catch-up if it starts out relatively poor.
An increases in capital will increase real GDP per person
more in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is form domestic or foreign investment
How to calculate productivity
number of workers/(number of products created/Total amount of hours)
Patents turn new ideas into
private goods, and increase the incentive to engage in research
In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows form his company and he made millions. This example shows that patents turn idea into a
private idea
In the equation for the production function
productivity
A nation's standard of living is best measured by its
real GDP per person
Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to
reduce productivity. Other things the same, this decrease will be larger in a poor country
Accumulating capital
requires that society sacrifice consumption of goods in the present
Which of the of following is an example of physical capital
the equipment in a factory
In order for the standard of living within a country to be enhanced over time, which of the following is essential?
the level of productivity must increase
If the best educated and most skilled persons leaves a country, then in the short term this country's human capital per worker
will decrease but physical capital per worker will increase