Question :
51) ________ in the United States ________ in most European : 1228331
51) ________ in the United States ________ in most European countries.
A) GDP per hour; is greater than GDP per hour
B) Average weekly hours; are greater than average weekly hours
C) The Okun Gap; is equal to the Okun Gap
D) The Lucas Wedge; is greater than the Lucas Wedge
E) Both A and B are true.
52) The gap in GDP between the United States and Europe can be explained by the fact that
A) U.S. labor is more productive than European labor.
B) prices are higher in the United States.
C) the Okun Gap is larger in the United States.
D) income taxes are higher in the United States.
E) equilibrium employment is higher in Europe.
53) Employing an additional 1 billion hours of labor increases real GDP by $12 billion. Employing another 1 billion hours beyond the first 1 billion increases real GDP by $11 billion. Hence we can conclude from this information that as employment increases, real GDP
A) increases at an increasing rate.
B) decreases at an increasing rate.
C) decreases at a decreasing rate.
D) increases at a decreasing rate.
E) falls from $12 billion to $11 trillion as more workers are hired.
54) If adding an initial 100 billion labor hours per year increases real GDP by $3 trillion, diminishing returns informs us that an additional 100 billion labor hours per year will increase real GDP by
A) exactly $3 trillion.
B) less than $3 trillion.
C) more than $3 trillion.
D) either exactly $3 trillion or by less than $3 trillion, depending on whether the real wage rate remains constant or rises.
E) some amount but there is not enough information to tell by how much.
55) The table above gives a nation’s production function. Which of the following is NOT an attainable combination of real GDP and labor?
A) Real GDP of $4.0 trillion and labor of 90 billion hours per year.
B) Real GDP of $4.7 trillion and labor of 110 billion hours per year.
C) Real GDP of $4.0 trillion and labor of 70 billion hours per year.
D) Real GDP of $5.2 trillion and labor of 90 billion hours per year.
E) Real GDP of $5.5 trillion and labor of 150 billion hours per year.
56) The above figure shows a nation’s production function. Point A is
A) attainable if the economy is inefficient.
B) unattainable given the state of the economy.
C) attainable if the nation uses resources efficiently.
D) the maximum amount of real GDP the nation can produce.
E) the labor market equilibrium quantity of employment and real GDP.
57) The above figure shows a nation’s production function. Point B is
A) unattainable.
B) attainable if the nation uses resources inefficiently.
C) attainable if the nation uses resources efficiently.
D) the maximum amount of real GDP the nation can ever produce.
E) Both answers C and D are correct.
58) The above figure shows a nation’s production function. Point C is
A) unattainable given the nation’s resource level.
B) attainable if the nation uses resources efficiently.
C) attainable if the nation uses resources inefficiently.
D) the maximum amount of real GDP the nation can produce.
E) the labor market equilibrium point.
59) The above figure that most accurately shows a production function is
A) Figure A.
B) Figure B.
C) Figure C.
D) Figure D.
E) Both Figure A and Figure B; Figure A for an economy with an excess of labor and Figure B for an economy with a shortage of labor.
60) Based on the production function in the above figure, which of the following is an attainable combination of labor and real GDP?
i.300 billion hours of labor and real GDP of $15 trillion
ii.300 billion hours of labor and real GDP of $6 trillion
iii.100 billion hours of labor and real GDP of $12 trillion
A) i only
B) ii only
C) iii only
D) ii and iii
E) i and ii
