Exam 6: Aggregate Incomes

If the number of workers in a country is 12,000 and its income per worker is $380,its GDP is ________.

Scenario: The price of a given basket of goods in Country 1 is 10 karls. The price of the same basket of goods in Country 2 is 25 ritz and is $2 in the United States. Country 1 has an income per capita of 3,200 karls, and Country 2 has an income per capita of 5,500 ritz. -Refer to the scenario above.Which of the following is true?

Scenario: Two economies, A and B, have identical aggregate production functions with diminishing returns. In both economies, capital and labor are equally important for production. Economy A has twice as many efficiency units of labor as economy B. Economy B has twice as much physical capital stock as economy A. -Refer to the scenario above.If population doubles and GDP remains unchanged,the economies' ________.

Perylia produced 10 million tons of wheat in a certain year,using a given stock of capital,K,and efficiency units of labor,L.It was able to increase production to 15 million tons within 2 years without any increase in its physical capital stock or the efficiency units of labor.Suppose wheat is the only good produced in Perylia.What is a likely reason for the increase in production? Explain with a suitable diagram.

Scenario: Tree Country has a population of 18,000 people, of whom two-thirds are part of the workforce. The country's only asset is wood, where K = 18,000. The country only produces wooden furniture. In the figure below, Y stands for GDP, and H equals efficiency units of labor. -Refer to the scenario above.Again,assume Tree Country's economy has constant returns to scale.All inputs and human capital double,but technology remains the same.Which of the following would double?

Over the course of 10 years,a country's population doubles.During this time,its GDP increases from $10 trillion to $12 trillion.Pete,who lives in this country and buys the same goods and services every year,finds that he is still paying the same price for them.This implies that ________.

Scenario: In Riverland, life expectancy is rising and has just surpassed life expectancy in its neighbor country, Lakeland. -Refer to the scenario above.Country A has a slightly bigger exchange-rate-adjusted GDP per capita than country B.Based on this information,is the conclusion that the standard of living in country A is higher than the standard of living in country B correct?

Workers in an economy are likely to be more productive if ________.

The income per capita in a country with a population of 50,000 is $4,500.Its GDP is ________.

The following table shows the GDP and total population in a particular year for four fictional countries: -Refer to the table above.Which country is likely to have the highest Human Development Index?

Scenario: In 2010, Bozone had fifteen full-time (40 hours per week) employees and brewed 10 million cans of beer in 300 business days. Bozone paid each employee $15 per hour. In 2015, production increased to 20 million cans, and five new employees were hired. A new policy allowed employees to take the day off if it is a powder day at Bridger ski resort. -Refer to the scenario above.Assume there were no powder days in 2015.What can you say about the standard of living of an employee at Bozone in 2015 compared to an employee at Bozone in 2010?

Scenario: In 2010, Bozone had fifteen full-time (40 hours per week) employees and brewed 10 million cans of beer in 300 business days. Bozone paid each employee $15 per hour. In 2015, production increased to 20 million cans, and five new employees were hired. A new policy allowed employees to take the day off if it is a powder day at Bridger ski resort. -Refer to the scenario above.Assume that there were 60 powder days in 2015.Productivity at Bozone ________.

The following table shows the GDP and total population in a particular year for four fictional countries: -Refer to the table above.Which country is likely to have the lowest life expectancy at birth?

Two countries-X and Y-have identical production functions.The efficiency units of labor in both countries are also equal.However,Country X has KX units of physical capital stock,while Country Y has KY units of physical capital stock,as shown in the figure below. How will increases in the physical capital stock affect the output growth in these countries?

Refer to the scenario above.It is found that a one-unit increase in capital leads to a higher increase in the production of good X in Farm Country than in Industry Country.Why might this be the case if both countries have the same amount of total efficiency units of labor?

________ is likely to result in an increase in the total efficiency units of labor in the economy.

The total number of workers in two different countries is equal.However,workers in Country A are three times more productive than workers in Country B.Which of the following is true in this case?

Scenario: Two economies, A and B, have identical aggregate production functions with diminishing returns. In both economies, capital and labor are equally important for production. Economy A has twice as many efficiency units of labor as economy B. Economy B has twice as much physical capital stock as economy A. -Refer to the scenario above.From the description,it can be inferred that ________.

Scenario: Two neighboring countries, Sweetland and Sourland, are identical in terms of size, population (800,000), education of workforce, and value of natural resources owned. -Refer to the scenario above.Over time,Sourland's aggregate production function shifts upward.Why might this be the case?

How does an increase in competition in an industry usually affect productivity?