Question 1

One explanation of differences in total factor productivity is differences in labor's share of GDP.

Accepted Answer

A) True 
 B)False

Question 2

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

Question 3

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 4

As an economist working at the International Monetary Fund, you are given the following data for Burundi: predicted per capita GDP, relative to the United States, as given by   , is 0.10, and total factor productivity is 0.083. What is the observed per capita GDP, relative to the United States?

Accepted Answer

A)  0.008 
B)  0.016 
C)  0.87 
D)  0.44 
E)  0.62 
A)  0.008 
B)  0.016 
C)  0.87 
D)  0.44 
E)  0.62

Question 5

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 these answers is correct. 
A)    
B)    
C)    
D)    
E)  None of these answers is correct.

Question 6

Refer to the following table when answering the following questions.
Table 4.1: Production Model's Prediction for Per Capita GDP (US = 1)   (Source: Penn World Tables 9.0)
-One explanation for the difference between the predicted output per person and the observed per capita GDP in Table 4.1 is differences in:

Accepted Answer

A)  the labor supply. 
B)  the state of technology. 
C)  per capita capital. 
D)  capital's share of GDP. 
E)  labor's share of GDP. 
A)  the labor supply. 
B)  the state of technology. 
C)  per capita capital. 
D)  capital's share of GDP. 
E)  labor's share of GDP.

Question 7

If the production function is given by   
, then labor's share of GDP is one-third.

Accepted Answer

A) True 
 B)False

Question 8

Suppose the payments to capital and labor are (w*L*)/Y* = 2/3 and (r*K*)/Y*= 1/3, respectively. One implication of this result is that ________ and profits are ________.

Accepted Answer

A)    ; positive 
B)    ; equal to zero 
C)    ; negative 
D)    ; equal to zero 
E)    ; negative 
A)    ; positive 
B)    ; equal to zero 
C)    ; negative 
D)    ; equal to zero 
E)    ; negative

Question 9

Refer to the following table when answering the following questions.
Table 4.1: Production Model's Prediction for Per Capita GDP (US = 1)   (Source: Penn World Tables 9.0)
-Consider Table 4.1, which compares the model   to actual statistical data on per capita GDP. You observe the model:

Accepted Answer

A)  consistently underestimates the level of per capita GDP. 
B)  consistently overestimates the level of per capita GDP. 
C)  does a really good job of estimating the level of per capita GDP. 
D)  clearly contains all factors that affect per capita GDP. 
E)  None of these answers is correct. 
A)  consistently underestimates the level of per capita GDP. 
B)  consistently overestimates the level of per capita GDP. 
C)  does a really good job of estimating the level of per capita GDP. 
D)  clearly contains all factors that affect per capita GDP. 
E)  None of these answers is correct.

Question 10

A production function of the form   
exhibits constant returns to scale.

Accepted Answer

A) True 
 B)False

Question 11

A firm's profit is simply defined as:

Accepted Answer

A)  zero. 
B)  revenues plus costs. 
C)  revenues minus costs. 
D)  the price of output minus labor costs. 
E)  the price of output minus labor costs minus capital costs. 
A)  zero. 
B)  revenues plus costs. 
C)  revenues minus costs. 
D)  the price of output minus labor costs. 
E)  the price of output minus labor costs minus capital costs.

Question 12

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 these answers is correct. 
A)    
B)    
C)    
D)    
E)  None of these answers is correct.

Question 13

A production function exhibits decreasing returns to scale when you:

Accepted Answer

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

Question 14

In the production function   
,   
represents a productivity parameter.

Accepted Answer

A) True 
 B)False

Question 15

Refer to the following table when answering the following questions.
Table 4.1: Production Model's Prediction for Per Capita GDP (US = 1)   (Source: Penn World Tables 9.0)
-One explanation for the difference between the predicted output per person and the observed per capita GDP in Table 4.1 is differences in:

Accepted Answer

A)  per capita capital. 
B)  the labor supply. 
C)  factor productivity. 
D)  labor's share of GDP. 
E)  None of these answers is correct. 
A)  per capita capital. 
B)  the labor supply. 
C)  factor productivity. 
D)  labor's share of GDP. 
E)  None of these answers is correct.

Question 16

The marginal product of the labor curve represents the:

Accepted Answer

A)  demand for wages. 
B)  supply of labor. 
C)  demand for labor. 
D)  demand for capital. 
E)  supply of wages. 
A)  demand for wages. 
B)  supply of labor. 
C)  demand for labor. 
D)  demand for capital. 
E)  supply of wages.

Question 17

If MPL  $\lt$ w, the firm:

Accepted Answer

A)  has the optimal amount of labor. 
B)  should fire some labor until MPL = w. 
C)  should fire some labor until MPL = 0. 
D)  should hire more capital until MPK = 0. 
E)  should hire more capital until MPL = w. 
A)  has the optimal amount of labor. 
B)  should fire some labor until MPL = w. 
C)  should fire some labor until MPL = 0. 
D)  should hire more capital until MPK = 0. 
E)  should hire more capital until MPL = w.

Question 18

Suppose the payments to capital and labor are (w*L*)/Y* = 2/3 and (r*K*)/Y*= 1/3, respectively. One implication of this result is:

Accepted Answer

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

Question 19

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

Accepted Answer

A)  institutions 
B)  the labor stock 
C)  human capital 
D)  natural resources 
E)  technology 
A)  institutions 
B)  the labor stock 
C)  human capital 
D)  natural resources 
E)  technology

Question 20

A production function exhibits increasing returns to scale when you:

Accepted Answer

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

One explanation of differences in total factor productivity is differences in labor's share of GDP.

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

Mathematically, an economic model is:

As an economist working at the International Monetary Fund, you are given the following data for Burundi: predicted per capita GDP, relative to the United States, as given by , is 0.10, and total factor productivity is 0.083. What is the observed per capita GDP, relative to the United States?

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 , then labor's share of GDP is one-third.

Suppose the payments to capital and labor are (wL)/Y* = 2/3 and (rK)/Y*= 1/3, respectively. One implication of this result is that and profits are .

Refer to the following table when answering the following questions. Table 4.1: Production Model's Prediction for Per Capita GDP (US = 1) (Source: Penn World Tables 9.0) -Consider Table 4.1, which compares the model to actual statistical data on per capita GDP. You observe the model:

A production function of the form exhibits constant returns to scale.

A firm's profit is simply 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:

A production function exhibits decreasing returns to scale when you:

In the production function , represents a productivity parameter.

The marginal product of the labor curve represents the:

If MPL $\lt$ w, the firm:

Suppose the payments to capital and labor are (wL)/Y* = 2/3 and (rK)/Y*= 1/3, respectively. One implication of this result is:

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

A production function exhibits increasing returns to scale when you:

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

Exam 4: A Model of Production

One explanation of differences in total factor productivity is differences in labor's share of GDP.

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

Mathematically, an economic model is:

As an economist working at the International Monetary Fund, you are given the following data for Burundi: predicted per capita GDP, relative to the United States, as given by , is 0.10, and total factor productivity is 0.083. What is the observed per capita GDP, relative to the United States?

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 , then labor's share of GDP is one-third.

Suppose the payments to capital and labor are (w*L*)/Y* = 2/3 and (r*K*)/Y*= 1/3, respectively. One implication of this result is that ________ and profits are ________.

Refer to the following table when answering the following questions. Table 4.1: Production Model's Prediction for Per Capita GDP (US = 1) (Source: Penn World Tables 9.0) -Consider Table 4.1, which compares the model to actual statistical data on per capita GDP. You observe the model:

A production function of the form exhibits constant returns to scale.

A firm's profit is simply 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:

A production function exhibits decreasing returns to scale when you:

In the production function , represents a productivity parameter.

The marginal product of the labor curve represents the:

If MPL <\lt< w, the firm:

Suppose the payments to capital and labor are (w*L*)/Y* = 2/3 and (r*K*)/Y*= 1/3, respectively. One implication of this result is:

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

A production function exhibits increasing returns to scale when you:

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

Suppose the payments to capital and labor are (wL)/Y* = 2/3 and (rK)/Y*= 1/3, respectively. One implication of this result is that and profits are .

If MPL $\lt$ w, the firm:

Suppose the payments to capital and labor are (wL)/Y* = 2/3 and (rK)/Y*= 1/3, respectively. One implication of this result is: