Question 1

When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,a rise in labor ________________________,and a rise in the technology coefficient __________________.

Accepted Answer

A)  shifts the production function upward; also shifts the production function upward 
B)  moves us up along a given production function; shifts the production function upward 
C)  shifts the production function downward; shifts the production function upward 
D)  shifts the production function upward; moves us up along a given production function

Question 2

A useful rule of thumb called the "Rule of 70" states that if something grows at a constant rate of Z percent per year,it doubles in size approximately every __________ years.

Accepted Answer

A)  70 - Z 
B)  70/Z 
C)  Z/70 
D)  70 × (Z/100)

Question 3

In the production function Real GDP = T (L,K),the T stands for tax coefficient.

Accepted Answer

A) True 
 B)False

Question 4

In the production function,the variable K represents human capital.

Accepted Answer

A) True 
 B)False

Question 5

An economy growing at a steady rate of 2.6 percent per year doubles in size approximately every __________ years.

Accepted Answer

A)  50 
B)  27 
C)  38 
D)  43

Question 6

List and describe four factors that can contribute to economic growth.

Accepted Answer

The answer of List and describe four factors that can...

Question 7

Production Function
Real GDP = T (L,K),such that Real GDP = T(L + K)
Assume that the technology coefficient is equal to 0.40.
-Refer to Exhibit 17-1.If this production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,the resulting graph would be

Accepted Answer

A)  upward sloping. 
B)  downward sloping. 
C)  vertical. 
D)  horizontal.

Question 8

_______________________ specifies the relation between technology and the factor inputs to output.

Accepted Answer

A)  Neoclassical growth theory 
B)  Meta-ideas 
C)  The LRAS curve 
D)  A production function

Question 9

Neoclassical growth theory treats technology as an _________________ variable,and new growth theory treats technology as an ______________.

Accepted Answer

A)  exogenous; endogenous variable 
B)  endogenous; exogenous variable 
C)  endogenous; endogenous variable,as well 
D)  exogenous; exogenous variable,as well

Question 10

According to new growth theory,discovering and implementing new __________ is what causes economic growth.

Accepted Answer

A)  ways of managing personnel 
B)  manufacturing techniques 
C)  ideas 
D)  resource sources 
E)  none of the above

Question 11

A production function specifies the relation between ____________ and the ___________ to ____________________.

Accepted Answer

A)  technology; output; Real GDP 
B)  technology; the factor inputs; Real GDP 
C)  price; quantity; Real GDP 
D)  Real GDP; the factor inputs; the price level

Question 12

Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds.We should expect more entrepreneurship under the __________ system and faster real economic growth under the __________ system.

Accepted Answer

A)  former; former 
B)  former; latter 
C)  latter; former 
D)  latter; latter

Question 13

Suppose the population of a country rises significantly.If the country's Real GDP remains constant,the result is _________________ economic growth.

Accepted Answer

A)  both absolute economic growth and per-capita real 
B)  absolute economic growth,but not per-capita real 
C)  per-capita real economic growth,but not absolute 
D)  neither absolute economic growth nor per-capita real

Question 14

If an economy can increase its steady annual growth rate from 1 percent to 1.5 percent,this reduces the time it takes for the economy to double in size by approximately __________ years.

Accepted Answer

A)  5 
B)  8 
C)  33 
D)  17 
E)  23

Question 15

New growth theory holds that technology is __________ and that the more resources that go to develop technology,the __________ technology that is produced.

Accepted Answer

A)  exogenous; more and better 
B)  exogenous; less 
C)  endogenous; more and better 
D)  endogenous; less

Question 16

Property rights are a tangible factor in producing economic growth.

Accepted Answer

A) True 
 B)False

Question 17

Higher income taxes cause a ____________shift of the labor supply curve,which then produces__________ Real GDP.

Accepted Answer

A)  rightward; less 
B)  rightward; more 
C)  leftward; less 
D)  leftward; more

Question 18

-Refer to Exhibit 17-3 Assume that the starting point on the production function is point A.After an increase in the quantity of labor,there would be a ______________________ which would shift the LRAS curve from LRAS1 to _______________ resulting in _______________..

Accepted Answer

A)  movement along the production function to point C; LRAS2; economic growth 
B)  shifting upward of the production function to point B; LRAS2; economic growth 
C)  movement along the production function to point C; LRAS3; a shrinking economy 
D)  shifting upward of the production function to point B; LRAS3; a shrinking economy

Question 19

Economists Barro and McCleary's research regarding the impact of religious beliefs on economic growth noted that a belief in hell matters more to economic growth than the belief in heaven.

Accepted Answer

A) True 
 B)False

Question 20

An economy doubles in size every 20 years if it maintains a steady annual growth rate of about __________ percent.

Accepted Answer

A)  4.0 
B)  2.8 
C)  3.5 
D)  2.0

Exam 17: Market Failure: Externalities, public Goods, and Asymmetric Information

When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,a rise in labor ______,and a rise in the technology coefficient .

A useful rule of thumb called the "Rule of 70" states that if something grows at a constant rate of Z percent per year,it doubles in size approximately every __________ years.

In the production function Real GDP = T (L,K),the T stands for tax coefficient.

In the production function,the variable K represents human capital.

An economy growing at a steady rate of 2.6 percent per year doubles in size approximately every __________ years.

List and describe four factors that can contribute to economic growth.

Production Function Real GDP = T (L,K) ,such that Real GDP = T(L + K) Assume that the technology coefficient is equal to 0.40. -Refer to Exhibit 17-1.If this production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,the resulting graph would be

_______________________ specifies the relation between technology and the factor inputs to output.

Neoclassical growth theory treats technology as an ___ variable,and new growth theory treats technology as an .

According to new growth theory,discovering and implementing new __________ is what causes economic growth.

A production function specifies the relation between ______ and the _ to ________________.

Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds.We should expect more entrepreneurship under the system and faster real economic growth under the system.

Suppose the population of a country rises significantly.If the country's Real GDP remains constant,the result is _________________ economic growth.

If an economy can increase its steady annual growth rate from 1 percent to 1.5 percent,this reduces the time it takes for the economy to double in size by approximately __________ years.

New growth theory holds that technology is and that the more resources that go to develop technology,the technology that is produced.

Property rights are a tangible factor in producing economic growth.

Higher income taxes cause a __shift of the labor supply curve,which then produces Real GDP.

-Refer to Exhibit 17-3 Assume that the starting point on the production function is point A.After an increase in the quantity of labor,there would be a ______________ which would shift the LRAS curve from LRAS₁ to _ resulting in _________..

Economists Barro and McCleary's research regarding the impact of religious beliefs on economic growth noted that a belief in hell matters more to economic growth than the belief in heaven.

An economy doubles in size every 20 years if it maintains a steady annual growth rate of about __________ percent.