Question 1

Models simplify __________ of decisions into just a few equations.

Accepted Answer

A) tens 
B) hundreds 
C) millions 
D) dozens 
E) thousands 
A) tens 
B) hundreds 
C) millions 
D) dozens 
E) thousands

Question 2

What are the shortcomings of using the production model   
? What might we include in our model to improve the fit of this simple model?

Accepted Answer

As is demonstrated in the text,the model

Question 3

The two main inputs we consider in our production function model are labor and land.

Accepted Answer

A) True 
 B)False

Question 4

In the Cobb-Douglas production function  
,if a = 1/3,then:

Accepted Answer

A) labor's share of GDP is two-thirds. 
B) labor's share of GDP is one-third. 
C) capital's share of GDP is one-third. 
D) capital's share of income is one. 
E) Both a and c are correct. 
A) labor's share of GDP is two-thirds. 
B) labor's share of GDP is one-third. 
C) capital's share of GDP is one-third. 
D) capital's share of income is one. 
E) Both a and c are correct.

Question 5

In the year 2000,the five richest countries had a per capita GDP __________ times higher than the five poorest countries.Differences in capital per worker explain about __________ percent of this difference,with total factor productivity making up about __________ percent of this difference.

Accepted Answer

A) 10;2;10 
B) 45;10;4.5 
C) 35;3.5;10 
D) 35;10;3.5 
E) 45;4.5;10 
A) 10;2;10 
B) 45;10;4.5 
C) 35;3.5;10 
D) 35;10;3.5 
E) 45;4.5;10

Question 6

In the production function   
,A± represents a productivity parameter.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following production functions exhibits increasing returns to scale?

Accepted Answer

A)    
B)    
C)    
D)    
E) all of the above 
A)    
B)    
C)    
D)    
E) all of the above

Question 8

Write down the firm's profit maximizing problem.Be sure to identify the variables the firm can choose and which it takes as given.What should the firm facing the following scenarios do?
• If the marginal product of capital is greater than the rental price of capital.
• If the marginal product of labor is less than the wage.

Accepted Answer

The firm maximizes profits,which is equa

Question 9

The marginal product of labor is defined as:

Accepted Answer

A) output divided by labor. 
B) the additional output generated by hiring an additional unit of labor. 
C) the additional output generated by hiring an additional unit of labor and capital. 
D) the additional output generated by hiring an additional unit of capital. 
E) the additional revenue generated by hiring an additional unit of labor. 
A) output divided by labor. 
B) the additional output generated by hiring an additional unit of labor. 
C) the additional output generated by hiring an additional unit of labor and capital. 
D) the additional output generated by hiring an additional unit of capital. 
E) the additional revenue generated by hiring an additional unit of labor.

Question 10

In the Cobb-Douglas production function  
,defining y = Y/L as output per person and k = K/L as capital per person,the per person production function is:

Accepted Answer

A)    . 
B)    . 
C)    . 
D)    . 
E) none of the above 
A)    . 
B)    . 
C)    . 
D)    . 
E) none of the above

Question 11

If the production function is given by  
And  
And K = L = 8,total output equals:

Accepted Answer

A) Y = 2. 
B) Y = 6. 
C) Y = 14. 
D) Y = 8. 
E) none of the above 
A) Y = 2. 
B) Y = 6. 
C) Y = 14. 
D) Y = 8. 
E) none of the above

Question 12

The law of diminishing marginal product to capital means that as we add additional units of capital:

Accepted Answer

A) and labor,output will increase but at a constant rate. 
B) and labor,output will increase but at a decreasing rate. 
C) but hold labor constant,output will increase but at an increasing rate. 
D) but hold labor constant,output will increase but at a constant rate. 
E) but hold labor constant,output will increase but at a decreasing rate. 
A) and labor,output will increase but at a constant rate. 
B) and labor,output will increase but at a decreasing rate. 
C) but hold labor constant,output will increase but at an increasing rate. 
D) but hold labor constant,output will increase but at a constant rate. 
E) but hold labor constant,output will increase but at a decreasing rate.

Question 13

-Consider Figure 4.3.The shape of this production function suggests:

Accepted Answer

A) a diminishing marginal product of capital. 
B) a constant marginal product of capital. 
C) a diminishing marginal product of labor. 
D) an increasing marginal product of capital. 
E) Not enough information is given. 
A) a diminishing marginal product of capital. 
B) a constant marginal product of capital. 
C) a diminishing marginal product of labor. 
D) an increasing marginal product of capital. 
E) Not enough information is given.

Question 14

To decompose what explains the difference in per capita GDP between any two countries,say,1 and 2,we would use:

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 15

-Consider Table 4.1,which compares the model  
To actual statistical data on per capita GDP.You observe:

Accepted Answer

A) the model consistently underestimates the level of per capita GDP. 
B) the model consistently overestimates the level of per capita GDP. 
C) the model does a really good job of estimating the level of per capita GDP. 
D) the model clearly contains all factors that affect per capita GDP. 
E) none of the above 
A) the model consistently underestimates the level of per capita GDP. 
B) the model consistently overestimates the level of per capita GDP. 
C) the model does a really good job of estimating the level of per capita GDP. 
D) the model clearly contains all factors that affect per capita GDP. 
E) none of the above

Question 16

With a Cobb-Douglas production function  
The marginal product of capital is __________ and the marginal product of labor is __________.

Accepted Answer

A)    
B)    
C)    
D)    
E) None of the above is correct. 
A)    
B)    
C)    
D)    
E) None of the above is correct.

Question 17

State whether the following production functions exhibit increasing,constant,or decreasing returns to scale in K and L.
(a)   
(b)   
(c)

Accepted Answer

The answer to this lies in multiplying e

Question 18

Consider two economies.If each country has the same production function and the same amount of capital and labor,the country that __________ produces more.

Accepted Answer

A) is less productive 
B) is more productive 
C) has more natural resources 
D) has lower costs of production 
E) has more workers 
A) is less productive 
B) is more productive 
C) has more natural resources 
D) has lower costs of production 
E) has more workers

Question 19

If the marginal product of capital equals the rental rate of capital,firms should not hire any more capital.

Accepted Answer

A) True 
 B)False

Question 20

-Consider Figure 4.2.The shape of this production function suggests:

Accepted Answer

A) a constant marginal product of capital. 
B) a diminishing marginal product of capital. 
C) a diminishing marginal product of labor. 
D) an increasing marginal product of capital. 
E) Not enough information is given. 
A) a constant marginal product of capital. 
B) a diminishing marginal product of capital. 
C) a diminishing marginal product of labor. 
D) an increasing marginal product of capital. 
E) Not enough information is given.

Models simplify __________ of decisions into just a few equations.

What are the shortcomings of using the production model ? What might we include in our model to improve the fit of this simple model?

The two main inputs we consider in our production function model are labor and land.

In the Cobb-Douglas production function ,if a = 1/3,then:

In the year 2000,the five richest countries had a per capita GDP times higher than the five poorest countries.Differences in capital per worker explain about percent of this difference,with total factor productivity making up about __ percent of this difference.

In the production function ,A± represents a productivity parameter.

Which of the following production functions exhibits increasing returns to scale?

The marginal product of labor is defined as:

In the Cobb-Douglas production function ,defining y = Y/L as output per person and k = K/L as capital per person,the per person production function is:

If the production function is given by And And K = L = 8,total output equals:

The law of diminishing marginal product to capital means that as we add additional units of capital:

-Consider Figure 4.3.The shape of this production function suggests:

To decompose what explains the difference in per capita GDP between any two countries,say,1 and 2,we would use:

-Consider Table 4.1,which compares the model To actual statistical data on per capita GDP.You observe:

With a Cobb-Douglas production function The marginal product of capital is and the marginal product of labor is .

State whether the following production functions exhibit increasing,constant,or decreasing returns to scale in K and L. (a) (b) (c)

Consider two economies.If each country has the same production function and the same amount of capital and labor,the country that __________ produces more.

If the marginal product of capital equals the rental rate of capital,firms should not hire any more capital.

-Consider Figure 4.2.The shape of this production function suggests:

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 4: A Model of Production

Models simplify __________ of decisions into just a few equations.

What are the shortcomings of using the production model ? What might we include in our model to improve the fit of this simple model?

The two main inputs we consider in our production function model are labor and land.

In the Cobb-Douglas production function ,if a = 1/3,then:

In the year 2000,the five richest countries had a per capita GDP __________ times higher than the five poorest countries.Differences in capital per worker explain about __________ percent of this difference,with total factor productivity making up about __________ percent of this difference.

In the production function ,A± represents a productivity parameter.

Which of the following production functions exhibits increasing returns to scale?

The marginal product of labor is defined as:

In the Cobb-Douglas production function ,defining y = Y/L as output per person and k = K/L as capital per person,the per person production function is:

If the production function is given by And And K = L = 8,total output equals:

The law of diminishing marginal product to capital means that as we add additional units of capital:

-Consider Figure 4.3.The shape of this production function suggests:

To decompose what explains the difference in per capita GDP between any two countries,say,1 and 2,we would use:

-Consider Table 4.1,which compares the model To actual statistical data on per capita GDP.You observe:

With a Cobb-Douglas production function The marginal product of capital is __________ and the marginal product of labor is __________.

State whether the following production functions exhibit increasing,constant,or decreasing returns to scale in K and L. (a) (b) (c)

Consider two economies.If each country has the same production function and the same amount of capital and labor,the country that __________ produces more.

If the marginal product of capital equals the rental rate of capital,firms should not hire any more capital.

-Consider Figure 4.2.The shape of this production function suggests:

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

In the year 2000,the five richest countries had a per capita GDP times higher than the five poorest countries.Differences in capital per worker explain about percent of this difference,with total factor productivity making up about __ percent of this difference.

With a Cobb-Douglas production function The marginal product of capital is and the marginal product of labor is .