Question 1

In the long run,a country will experience an increasing standard of living only if it experiences

Accepted Answer

The only option that ensures an increasing standard of living in the long run is continuous technological change. This will allow for increased productivity, greater efficiency, and ultimately, higher standards of living. Options A, C, and D are not enough on their own to ensure a continuous rise in living standards. A high rate of consumption can lead to resource depletion and environmental degradation, while a high rate of labor force growth or a slow rate of population growth may not be sustainable in the long run.

Question 2

What is human capital?

Accepted Answer

Human capital refers to the knowledge, skills, and abilities that workers acquire through education, training, and experience. It is an intangible asset and represents an investment in human resources that can increase labor productivity and overall economic output. This is why it is often considered one of the most important factors in a country's economic development.

Question 3

Figure 22-1
 
-Refer to Figure 22-1.Which of the following would cause an economy to move from a point like A in the figure above to a point like B?

Accepted Answer

Moving from point A to point B involves an increase in output per hour worked, which can be achieved by an increase in capital per hour worked. Therefore, choice C is the correct answer. Option A is incorrect because an improvement in technology would shift the production function upward, but it would not necessarily lead to a movement from point A to point B. Option B is incorrect because a decrease in capital per hour worked would lead to a movement to the left, from point A to a point like C. Option D is incorrect because a technological regression would shift the production function downward, resulting in a movement from point A to a point like D.

Question 4

Most economic growth in the world occurred between 1,000,000 B.C.and 1300 A.D.

Accepted Answer

Economic growth as we understand it did not occur until the Industrial Revolution in the 18th and 19th centuries. While there were periods of economic activity and progress throughout history, the idea of sustained economic growth and development is a relatively recent phenomenon.

Question 5

Which factors explain labor productivity?

Accepted Answer

Technological change can significantly enhance labor productivity by making processes more efficient, while the quantity of capital per hour worked (such as machinery and tools) directly impacts the output each worker can produce in a given time.

Question 6

The per-worker production function has a ________ slope,indicating that increases in capital per hour worked ________ real GDP.

Accepted Answer

A positive slope indicates that increases in capital per hour worked lead to an increase in real GDP.

Question 7

How do economic growth rates affect a nation's standard of living?

Accepted Answer

The answer of How do economic growth rates affect a...

Question 8

The Soviet Union consistently increased the amount of capital available to its workers,but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker.This phenomenon is referred to as

Accepted Answer

Diminishing returns to capital refers to the phenomenon where as more capital is added, the increase in output becomes smaller and smaller. This means that eventually, adding more capital will not lead to any significant increase in GDP per worker. This is the scenario described in the question. The other answer choices are not applicable to this phenomenon.

Question 9

If an outflow of workers leaves a country with a smaller but more productive workforce and the capital per hour worked does not change,there will be ________ the per-worker production function in that country.

Accepted Answer

The answer of If an outflow of workers leaves a...

Question 10

Figure 22-1
 
-Refer to Figure 22-1.Technological change is shown in the figure above by the movement from

Accepted Answer

The answer of Figure 22-1
 
-Refer to Figure 22-1.Technological change...

Question 11

The per-worker production function shows the relationship between ________ per hour worked and ________ per hour worked,holding ________ constant.

Accepted Answer

The per-worker production function shows the relationship between capital per hour worked and real GDP per hour worked, holding technology constant.

Question 12

If,after an outflow of workers in a country,it now takes more capital per hour worked to get the same amount of GDP per hour worked,this indicates ________ the per-worker production function in that country.

Accepted Answer

A decrease in the number of workers would lead to a decline in labor productivity. The per-worker production function would shift downward, and more capital would be required to achieve the same level of output per hour worked. Therefore, the correct answer would be D, a downward shift of the per-worker production function.

Question 13

New growth theory

Accepted Answer

New growth theory emphasizes that economic incentives influence the rate of technological change. It argues that firms invest in research and development to create new technologies in response to market incentives, such as profit-seeking behavior, and those technologies can lead to economic growth.

Question 14

A small economy increased its capital per hour worked (K/L)from $40,000 to $50,000.As a result,real GDP per worker (Y/L)grew from $20,000 to $25,000.If the economy increases its capital per hour worked by another $10,000 to $60,000,but there is no change in technology,by how much more and in what direction will output per worker change?

Accepted Answer

The economy exhibits diminishing returns to capital, meaning that as more capital is added without a change in technology, the additional output generated per worker decreases. Therefore, increasing capital from $50,000 to $60,000 will increase output per worker by less than the previous $5,000 increase.

Question 15

Which of the following describes the Soviet Union's economy through most of the second half of the 20th century?

Accepted Answer

The answer of Which of the following describes the Soviet...

Question 16

Technological change will

Accepted Answer

Technological change is often associated with an increase in productivity, which would shift the per-worker production function up. This means that each worker is able to produce more output, leading to an increase in the overall level of output that the economy can produce.

Question 17

If there is a change in the ability of a firm to produce a given level of output with a given level of inputs,we say there is

Accepted Answer

Technological change refers to the introduction of new and improved technologies that enable a firm to produce more output with the same set of inputs. This results in a shift in the production function, allowing the firm to produce more output with the same level of inputs, or the same level of output with fewer inputs. Therefore, option B is the correct answer. Options A and C refer to specific aspects of the change in technology, while option D refers to a movement along a given production function, which does not necessarily imply a change in technology.

Question 18

In 2010,South America had a lower average GDP per capita than any other continent.

Accepted Answer

In 2010, Africa had a lower average GDP per capita than South America, making South America not the continent with the lowest GDP per capita.

Question 19

Table 22-2
 
-Refer to Table 22-2.Calculate the GDP per capita for each country in the table.Which country has the highest standard of living? Why?

Accepted Answer

The answer of Table 22-2
 
-Refer to Table 22-2.Calculate the...

Question 20

An economic growth model

Accepted Answer

An economic growth model is designed to explain changes in real GDP per capita in the long run, by exploring the factors that influence the growth of an economy over time. It does not typically focus on short term changes or fluctuations in nominal GDP per capita.

Quiz 11: Long-Run Economic Growth: Sources and Policies