Question 1

In 2011 Buckeye Brewing produced 1,000 bottles of ginger ale each day.It employed 10 workers each working 8 hours a day.In 2012 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day.Productivity at Buckeye Brewing

Accepted Answer

A) increased by 20%. 
B) increased by 16.67%. 
C) decreased by 1.67%. 
D) decreased by 40%.

Question 2

In the production function Y= A F(L,K,H,N),which symbol reflects the state of technology?

Accepted Answer

A) A 
B) K 
C) H 
D) N

Question 3

You sell cupcakes.One day you double the time you spend and double all your inputs,and make twice as many cupcakes.Your cupcake production function has

Accepted Answer

A) decreasing returns to scale. 
B) zero returns to scale. 
C) constant returns to scale. 
D) increasing returns to scale.

Question 4

In a particular production process,if the quantities of all inputs used double,then the quantity of output doubles as well.This means that

Accepted Answer

A) the production process cannot be enhanced by technological advances. 
B) no mathematical representation of the relevant production function can be formulated. 
C) the relevant production function has the limits-to-growth property. 
D) the relevant production function has the constant-returns-to-scale property.

Question 5

Scenario 25-1.An economy's production form takes the form Y = AF(L,K,H,N).
-Refer to Scenario 25-1.If the production function has the constant-returns-to-scale property,then if we know the values of A,K/L,H/L,and N/L,we also know the value of

Accepted Answer

A) output. 
B) labor productivity. 
C) A. 
D) All of the above are correct.

Question 6

Historically,the market prices of most natural resources (adjusted for inflation)have

Accepted Answer

A) increased. 
B) remained stable. 
C) remained stable or decreased. 
D) decreased.

Question 7

After adjusting for inflation,over time the prices of most natural resources have been

Accepted Answer

A) steady or falling,meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling. 
B) steady or falling,meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing. 
C) rising,meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling. 
D) rising,meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing.

Question 8

Natural resources

Accepted Answer

A) are inputs provided by nature. 
B) include land,rivers,and mineral deposits. 
C) take two forms: renewable and nonrenewable. 
D) All of the above are correct.

Question 9

Which of the following lists contains,in this order,natural resources,human capital,and physical capital?

Accepted Answer

A) For a restaurant: the land the restaurant was built on,the money it borrowed to buy supplies,the freezers where the chops and steaks are kept. 
B) For a furniture company: wood,the skills and knowledge of its workers,saws. 
C) For a railroad: fuel,railroad engines,railroad tracks. 
D) None of the above is correct.

Question 10

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,productivity would

Accepted Answer

A) fall to less than one-half of its former value. 
B) fall,but it would still be greater than one-half of its former value. 
C) stay the same. 
D) rise but less than double.

Question 11

A leading environmental group recently published a report contending that humans are running a "resource deficit" because we are using natural resources faster than they can be regenerated.The group claims that this means that economic growth will eventually stop,and will even be reversed.An economist would

Accepted Answer

A) agree with the report,and would point to rising natural resource prices as evidence. 
B) agree with the report,but wouldn't think it was important because growth will not slow down for several centuries. 
C) disagree with the report,in part because it ignores the mitigating effects of technological change. 
D) disagree with the report because labor and capital are the primary determinants of growth,and since they are plentiful,growth will not slow down.

Question 12

Popeye produces 20 cans of spinach in 8 hours.Wimpy produces 15 hamburgers in 10 hours.If each hamburger trades for 1.5 cans of spinach,then

Accepted Answer

A) Popeye's production and productivity are greater than Wimpy's. 
B) Popeye's production is greater than Wimpy's,but his productivity is less. 
C) Wimpy's production and productivity are greater than Popeye's. 
D) Wimpy's production is greater than Popeye's,but his productivity is less.

Question 13

Suppose a country reduces restrictions on how many hours people can work.If reducing these restrictions increase the total number of hours worked in the economy,but all other factors that determine output are held fixed,then

Accepted Answer

A) productivity and output both rise. 
B) productivity rises and output falls. 
C) productivity falls and output rises. 
D) productivity and output fall.

Question 14

In determining living standards,productivity plays a key role

Accepted Answer

A) for individuals,but not for nations. 
B) for nations,but not for individuals. 
C) for both nations and individuals. 
D) for neither nations nor individuals.

Question 15

Daniel owns a coffee kiosk.All of his employees work 8 hours per day.In 2011,he employed 6 people who produced a total of 912 cups of coffee each day.In 2012,he hired a seventh employee and production increased to 1008 cups of coffee each day.In Daniel's kiosk,productivity

Accepted Answer

A) increased by about 10.5 percent 
B) increased by 9.5 percent 
C) decreased by about 5.6 percent 
D) decreased by about 5.3 percent

Question 16

Which of the following is an example of physical capital?

Accepted Answer

A) the strength of workers 
B) on the job training 
C) financial assets like cash and bonds 
D) the equipment in a factory

Question 17

If an inexpensive alternative to oil were found,the price of oil adjusted for inflation

Accepted Answer

A) would decline as the alternative would reduce the demand for oil. 
B) would decline as the alternative would reduce the supply of oil. 
C) would increase as the alternative would increase the demand for oil. 
D) would increase as the alternative would increase the supply of oil.

Question 18

Industrial machinery is an example of

Accepted Answer

A) a factor of production that in the past was an output from the production process. 
B) technological knowledge. 
C) a production function. 
D) an item which always has the property called constant returns to scale.

Question 19

Which of the following statements is true?

Accepted Answer

A) The quantity of natural resources per worker can influence productivity. 
B) Technological knowledge and human capital are closely related. 
C) Over long periods of time,the prices of most natural resources are stable or falling,relative to other prices. 
D) All of the above are correct.

Question 20

Which of the following are human capital and physical capital,respectively?

Accepted Answer

A) for an accounting firm: the accountants' knowledge of tax laws and computer software 
B) for a grocery store: grocery carts and shelving 
C) for a school: chalkboard and desks 
D) for a library: the building and the reference librarians' knowledge of the Internet

Exam 12: Production and Growth: Productivity Its Role and Determinants