Question : 101) Consider the aggregate production function Y = F(K, L). : 1384436

 

101) Consider the aggregate production function Y = F(K, L). If the inputs K and L are increased by 5% each, and the production function displays constant returns to scale, then total output will increase by ________%.

A) 0

B) less than 5

C) 5

D) more than 5

E) Not enough information to determine

102) Consider an aggregate production function Y = F(K, L) that displays diminishing marginal returns to labour. If the amount of capital is held constant and the amount of labour used in production is increasing, then

A) each additional unit of labour will add less to total output than the previous unit of labour.

B) each additional unit of labour will add more to total output than the previous unit of labour.

C) total output increases in proportion to the increases in labour.

D) there are increasing returns to scale.

E) there are constant returns to scale.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

103) Note: This question requires a calculator with an exponent feature.

A) 200

B) 1020

C) 1220

D) 6727

E) 20 200

104) Note: This question requires a calculator with an exponent function.

A) 2191

B) 8000

C) 20 800

D) 80 000

E) 836 683

105) Note: This question requires a calculator with an exponent function.

A) 1645; 2000

B) 1126; 1268

C) 2692; 7107

D) 500; 2000

E) 51 000; 52 000

106) Modern or “new” theories of long-run economic growth are based on the assumptions that technological change is mainly ________ to an economy and that investment yields ________ marginal returns.

A) exogenous; diminishing

B) exogenous; constant

C) exogenous; increasing

D) endogenous; decreasing

E) endogenous, increasing

107) The “new” theories of economic growth emphasize that the pace of technological change is ________ to economic signals, and that it is ________ to the economic system.

A) responsive; exogenous

B) responsive; endogenous

C) unresponsive; exogenous

D) unresponsive; endogenous

E) unresponsive; unrelated

108) The “new” theories of economic growth emphasize that technological change ________ to price and profit signals.

A) and product development are both directly related

B) is directly related and product development is inversely related

C) is unaffected by but product development is directly related

D) is directly related and population growth is inversely related

E) and product development are both unrelated

109) According to the “new” theories of economic growth, increasing marginal returns to capital investment is

A) possible, but only in the early stages of innovation before imitators rush in to drive prices down.

B) possible after initial fixed costs of innovation have been borne.

C) possible only if the capital is government-owned infrastructure.

D) impossible, and is thus a weak source of growth.

E) impossible because diminishing returns are unavoidable.

110) New theories of economic growth based on the idea that growth is endogenous

A) assume that the rate of growth of the economy is equal to the rate of population growth.

B) assume that the growth rate of technology is exogenous.

C) incorporate factors such as central-bank behaviour.

D) ignore the role of technology.

E) stress the role of knowledge and learning in the economy’s rate of growth.