Exam 4: A Model of Production

Both the United States and France,among the richest countries in the world,have similar levels of education and capital per worker,but the U.S.citizens enjoy higher incomes than the French.One explanation might be differences in:

After the Black Death in the fourteenth century,wages in Europe were higher than before the Black Death.

Consider an economy where the only consumption good is ice cream;firms in this economy must

A production function exhibits increasing returns to scale if,

You are an economist working for the International Monetary Fund.Your boss wants to know what is the total factor productivity of India,but all you have is data on per capita GDP,y,and the per capita capital stock,k.If you assume that capital's share of GDP is one-fourth,what would you use to find total factor productivity?

The following equation is an example of __________: )

In the United States,each year of education increases a worker's wage by about __________ per year.

If you have data on per capita GDP and capital per worker,to find total factor productivity you can use the equation ,if capital's share of GDP is onethird.

The firm's profit maximization problem is:

As a rough approximation,differences in capital per person explain about __________ of the difference in incomes between the richest and poorest countries,while differences in __________ explain __________.

-Consider Figure 4.1.The shape of this production function suggests:

If the marginal product of labor equals the wages,firms should hire more workers.

-Consider the two production functions in Figure 4.6,representing two countries.Which of the following is true? i.At points a and b,each country has the same per capita capital stock but different factor productivity. ii.Points a and c represent the same country but with different factor productivity. iii.Points b and d represent the same country but with different stock of per capita capital.

Which of the following are we likely going to want to explain with an economic model? i.Why people in the United States are fifty times richer than Ethiopians. ii.What causes economic growth. iii.What we think politicians should do with taxes.

The equation Is called:

If MPK = r,the firm:

You are an economist working for the International Monetary Fund.Your boss wants to know what is the total factor productivity of China,but all you have is data on per capita GDP,y,and the per capita capital stock,k.If you assume that capital's share of GDP is one-third,what would you use to find total factor productivity?

The production function Describes:

Consider two countries,A and B.If each country produces using identical production functions,but and ,the total factor productivity of country A equals that of B.

Which of the following inputs do we generally not consider in a simple production function?