Question 1

A production function exhibits constant returns to scale if:

Accepted Answer

A)  when you hold inputs constant, you double the output 
B)  when you double each input, you more than double the output 
C)  when you double each input, you less than double the output 
D)  when you double one input, you double the output 
E)  when you double each input, you double the output 
A)  when you hold inputs constant, you double the output 
B)  when you double each input, you more than double the output 
C)  when you double each input, you less than double the output 
D)  when you double one input, you double the output 
E)  when you double each input, you double the output

Question 2

The case of the economic reforms in Russia and China provide insight into differences in:

Accepted Answer

A)  the production model and TFP 
B)  labor market differences 
C)  the "Big Bang" versus gradualist approach to development 
D)  an export led development model 
E)  political cronyism 
A)  the production model and TFP 
B)  labor market differences 
C)  the "Big Bang" versus gradualist approach to development 
D)  an export led development model 
E)  political cronyism

Question 3

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 4

In the production function $Y = F ( K , L ) = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$ 
, $\bar { A }$ 
represents a productivity parameter.

Accepted Answer

A) True 
 B)False

Question 5

In the Cobb-Douglas production function $Y = K ^ { a } L ^ { 1 - a }$ , if a = 1/4, then:

Accepted Answer

A)  capital's share of GDP is one-fourth 
B)  labor's share of GDP is half 
C)  capital's share of GDP is three-fourths 
D)  labor's share of income is one-fourth 
E)  capital's share of GDP is four 
A)  capital's share of GDP is one-fourth 
B)  labor's share of GDP is half 
C)  capital's share of GDP is three-fourths 
D)  labor's share of income is one-fourth 
E)  capital's share of GDP is four

Question 6

If the production function is given by $Y = K ^ { 1 / 3 } L ^ { 2 / 3 }$ 
, the marginal product of capital is (1/3)(Y/K).

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \frac { \bar { A } _ { 1 } } { \bar { A } _ { 2 } } \times \left( \frac { \bar { k } _ { 1 } } { \bar { k } _ { 2 } } \right) ^ { 1 / 3 }$ 
B)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \frac { \bar { A } _ { 1 } } { \bar { A } _ { 2 } }$ 
C)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \left( \frac { \bar { k } _ { 1 } } { \bar { k } _ { 2 } } \right) ^ { 1 / 3 }$ 
D)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \frac { \bar { A } _ { 1 } } { \bar { A } _ { 2 } } \div \left( \frac { \bar { k } _ { 1 } } { \bar { k } _ { 2 } } \right) ^ { 1 / 3 }$ 
E)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \left( \frac { \bar { A } _ { 1 } } { \bar { A } _ { 2 } } \right) ^ { 1 / 3 }$ 
A)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \frac { \bar { A } _ { 1 } } { \bar { A } _ { 2 } } \times \left( \frac { \bar { k } _ { 1 } } { \bar { k } _ { 2 } } \right) ^ { 1 / 3 }$ 
B)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \frac { \bar { A } _ { 1 } } { \bar { A } _ { 2 } }$ 
C)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \left( \frac { \bar { k } _ { 1 } } { \bar { k } _ { 2 } } \right) ^ { 1 / 3 }$ 
D)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \frac { \bar { A } _ { 1 } } { \bar { A } _ { 2 } } \div \left( \frac { \bar { k } _ { 1 } } { \bar { k } _ { 2 } } \right) ^ { 1 / 3 }$ 
E)  $\frac { y _ { 1 } ^ { * } } { y _ { 2 } ^ { * } } = \left( \frac { \bar { A } _ { 1 } } { \bar { A } _ { 2 } } \right) ^ { 1 / 3 }$

Question 8

Which of the following explain(s) differences in total factor productivity?

Accepted Answer

A)  institutions 
B)  human capital 
C)  infrastructure 
D)  legal structure 
E)  All of these answers are correct. 
A)  institutions 
B)  human capital 
C)  infrastructure 
D)  legal structure 
E)  All of these answers are correct.

Question 9

Refer to the following figure when answering  
Figure 4.1: Production Function  
-Consider Figure 4.1. The shape of this production function suggests:

Accepted Answer

A)  None of these answers are correct. 
B)  a diminishing marginal product of labor 
C)  a constant marginal product of capital 
D)  an increasing marginal product of capital 
E)  an increasing marginal product of labor 
A)  None of these answers are correct. 
B)  a diminishing marginal product of labor 
C)  a constant marginal product of capital 
D)  an increasing marginal product of capital 
E)  an increasing marginal product of labor

Question 10

Refer to the following figure when answering  
Figure 4.1: Production Function  
-Consider Figure 4.1. The shape of this production function suggests:

Accepted Answer

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

Question 11

Which of the following do(es) NOT explain differences in total factor productivity?

Accepted Answer

A)  the labor stock 
B)  the share of capital in GDP 
C)  the share of labor in GDP 
D)  the stock of capital 
E)  All of these answers are correct. 
A)  the labor stock 
B)  the share of capital in GDP 
C)  the share of labor in GDP 
D)  the stock of capital 
E)  All of these answers are correct.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

If the production function is given by $Y = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$ and $\bar { A } = 1$
And K = L = 8, total output equals:

Accepted Answer

A)  Y = 2 
B)  Y = 6 
C)  Y = 14 
D)  Y = 8 
E)  None of these answers are correct. 
A)  Y = 2 
B)  Y = 6 
C)  Y = 14 
D)  Y = 8 
E)  None of these answers are correct.

Question 14

The following equation is an example of ________: $$Y = F ( K , L ) = \bar { A } K ^ { a } L ^ { 1 - a }$$ .

Accepted Answer

A)  a consumption function 
B)  a utility function 
C)  a production function 
D)  the production possibilities frontier 
E)  a growth model 
A)  a consumption function 
B)  a utility function 
C)  a production function 
D)  the production possibilities frontier 
E)  a growth model

Question 15

Institutions are one example of factors that influence total factor productivity.

Accepted Answer

A) True 
 B)False

Question 16

Convert the Cobb-Douglas production $Y = \bar { A } K ^ { a } L ^ { 1 - a }$ 
into per capita terms. Why might we be more concerned about per capita output rather than total output when discussing the welfare impacts of economic growth?

Accepted Answer

We begin by dividing both sides of the e

Question 17

In the Cobb-Douglas production function $Y = \bar { A } K ^ { 1 / 3 } L ^ { 2 / 3 }$ , 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)  $y = \bar { A } / k ^ { 2 / 3 }$ 
B)  $y = \bar { A } k ^ { - 1 / 3 }$ 
C)  $y = \bar { A } k ^ { 2 / 3 }$ 
D)  $y = \bar { A } k ^ { 1 / 3 }$ 
E)  None of these answers are correct. 
A)  $y = \bar { A } / k ^ { 2 / 3 }$ 
B)  $y = \bar { A } k ^ { - 1 / 3 }$ 
C)  $y = \bar { A } k ^ { 2 / 3 }$ 
D)  $y = \bar { A } k ^ { 1 / 3 }$ 
E)  None of these answers are correct.

Question 18

Mathematically, an economic model is:

Accepted Answer

A)  a fake world 
B)  a spreadsheet 
C)  an accurate representation of reality 
D)  a set of equations 
E)  the actual macroeconomy 
A)  a fake world 
B)  a spreadsheet 
C)  an accurate representation of reality 
D)  a set of equations 
E)  the actual macroeconomy

Question 19

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.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and ii 
E)  All of these options are correct. 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and ii 
E)  All of these options are correct.

Question 20

If $K = \bar { K }$ and $L = \bar { L }$
, then output is determined by:

Accepted Answer

A)  the total amount of labor in an economy 
B)  the total amount of capital in an economy 
C)  the total amount of capital and labor available in an economy 
D)  a percentage of capital and labor in an economy 
E)  Not enough information is given. 
A)  the total amount of labor in an economy 
B)  the total amount of capital in an economy 
C)  the total amount of capital and labor available in an economy 
D)  a percentage of capital and labor in an economy 
E)  Not enough information is given.

Exam 4: A Model of Production

A production function exhibits constant returns to scale if:

The case of the economic reforms in Russia and China provide insight into differences in:

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

In the production function Y=F(K,L)=AˉKˉ1/3L2/3Y = F ( K , L ) = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }Y=F(K,L)=AˉKˉ1/3L2/3 , Aˉ\bar { A }Aˉ represents a productivity parameter.

In the Cobb-Douglas production function Y=KaL1−aY = K ^ { a } L ^ { 1 - a }Y=KaL1−a , if a = 1/4, then:

If the production function is given by Y=K1/3L2/3Y = K ^ { 1 / 3 } L ^ { 2 / 3 }Y=K1/3L2/3 , the marginal product of capital is (1/3)(Y/K).

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

Which of the following explain(s) differences in total factor productivity?

Refer to the following figure when answering Figure 4.1: Production Function -Consider Figure 4.1. The shape of this production function suggests:

Refer to the following figure when answering Figure 4.1: Production Function -Consider Figure 4.1. The shape of this production function suggests:

Which of the following do(es) NOT explain differences in total factor productivity?

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

If the production function is given by Y=AˉKˉ1/3L2/3Y = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }Y=AˉKˉ1/3L2/3 and Aˉ=1\bar { A } = 1Aˉ=1 And K = L = 8, total output equals:

The following equation is an example of ________: Y=F(K,L)=AˉKaL1−aY = F ( K , L ) = \bar { A } K ^ { a } L ^ { 1 - a }Y=F(K,L)=AˉKaL1−a .

Institutions are one example of factors that influence total factor productivity.

Convert the Cobb-Douglas production Y=AˉKaL1−aY = \bar { A } K ^ { a } L ^ { 1 - a }Y=AˉKaL1−a into per capita terms. Why might we be more concerned about per capita output rather than total output when discussing the welfare impacts of economic growth?

In the Cobb-Douglas production function Y=AˉK1/3L2/3Y = \bar { A } K ^ { 1 / 3 } L ^ { 2 / 3 }Y=AˉK1/3L2/3 , defining y = Y/L as output per person and k = K/L as capital per person, the per person production function is:

Mathematically, an economic model is:

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.

If K=KˉK = \bar { K }K=Kˉ and L=LˉL = \bar { L }L=Lˉ , then output is determined by:

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

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

In the production function $Y = F ( K , L ) = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$ , $\bar { A }$ represents a productivity parameter.

In the Cobb-Douglas production function $Y = K ^ { a } L ^ { 1 - a }$ , if a = 1/4, then:

If the production function is given by $Y = K ^ { 1 / 3 } L ^ { 2 / 3 }$ , the marginal product of capital is (1/3)(Y/K).

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

If the production function is given by $Y = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$ and $\bar { A } = 1$ And K = L = 8, total output equals:

The following equation is an example of ________: $Y = F ( K , L ) = \bar { A } K ^ { a } L ^ { 1 - a }$ .

Convert the Cobb-Douglas production $Y = \bar { A } K ^ { a } L ^ { 1 - a }$ into per capita terms. Why might we be more concerned about per capita output rather than total output when discussing the welfare impacts of economic growth?

In the Cobb-Douglas production function $Y = \bar { A } K ^ { 1 / 3 } L ^ { 2 / 3 }$ , defining y = Y/L as output per person and k = K/L as capital per person, the per person production function is:

If $K = \bar { K }$ and $L = \bar { L }$ , then output is determined by: