51.LastyeartheimaginarynationofPanglossiahadrealGDPof400billion.ThisyearithadrealGDPof472.5billion.Whichofthefollowingchangesinpopulationisconsistentwitha5percentgrowthrateofrealGDPperpersonoverthelastyear?
a.Thepopulationdecreasedfrom75millionto72million.
b.Thepopulationdecreasedfrom60millionto50million.
c.The population increased from 70million to 80 million.
d.The population increased from 80million to 90 million.
52.In2012,theimaginarynationofDoradoshadapopulationof8,000andrealGDPof3,000,000.DuringtheyearitsrealGDPgrewbyabout2.9%.WhichofthefollowingsetsofgrowthratesisconsistentwiththisgrowthinrealGDP?
a.2%populationgrowthand6%realGDPgrowth
b.6%populationgrowthand2%realGDPgrowth
c.4%populationgrowthand7%realGDPgrowth
d.7%populationgrowthand4%realGDPgrowth
53.In2012,theimaginarynationofPlatlandhadapopulationof10,000andrealGDPof42,000,000.DuringtheyearitsrealGDPperpersongrewbyabout1.94%.WhichofthefollowingsetsofgrowthratesisconsistentwiththisgrowthinrealGDPperperson?
a.3%populationgrowthand4%realGDPgrowth
b.3%populationgrowthand5%realGDPgrowth
c.6%populationgrowthand4%realGDPgrowth
d.6%populationgrowthand5%realGDPgrowth
54.Whichofthefollowingpairsoftermsrefertothesamething?
a.“capital”and“physicalcapital”
b.“technologicalknowledge”and“humancapital”
c.“standardofliving”and“humancapital”
d.“standardofliving”and“productivity”
1.Whichofthefollowingiscorrect?
a.AlthoughlevelsofrealGDPperpersonvarysubstantiallyfromcountrytocountry,thegrowthrateofrealGDPperpersonissimilaracrosscountries.
b.Productivityisnotcloselylinkedtogovernmentpolicies.
c.ThelevelofrealGDPperpersonisagoodgaugeofeconomicprosperity,andthegrowthrateofrealGDPperpersonisagoodgaugeofeconomicprogress.
d.ProductivitymaybemeasuredbythegrowthrateofrealGDPperperson.
2.Theonevariablethatstandsoutasthemostsignificantexplanationoflargevariationsinlivingstandardsaroundtheworldis
a.productivity.
b.population.
c.preferences.
d.prices.
3.Productivityisdefinedasthequantityof
a.laborrequiredtoproduceanation’sGDP.
b.laborrequiredtoproduceoneunitofgoodsandservices.
c.goodsandservicesproducedfromeachunitoflaborinput.
d.goodsandservicesproducedperunitoftime.
4.Whichofthefollowingisacorrectwaytomeasureproductivity?
a.Dividethenumberofhoursworkedbythequantityofoutput.
b.Dividethequantityofoutputbythenumberofhoursworked.
c.Determinehowmuchoutputisproducedinagiventime.
d.Determinehowmuchtimeittakestoproduceaunitofoutput.
5.Whichofthefollowingstatementsistrue?
a.Productivityiscalculatedashoursworkeddividedbyoutputproduced.
b.AmericanshaveahigherstandardoflivingthanIndonesiansbecauseAmericanworkersaremoreproductivethanIndonesianworkers.
c.BothAandBarecorrect.
d.Noneoftheabovearecorrect.
6.Whichofthefollowingisnotcorrect?
a.Countriesthathavehadhigheroutputgrowthperpersonhavetypicallydonesowithouthigherproductivitygrowth.
b.Acountry’sstandardoflivinganditsproductivityarecloselyrelated.
c.Productivityreferstooutputproducedperhourofwork.
d.Increasesinproductivitycanbeusedtoincreaseoutputorleisure.
7.Indetermininglivingstandards,productivityplaysakeyrole
a.forindividuals,butnotfornations.
b.fornations,butnotforindividuals.
c.forbothnationsandindividuals.
d.forneithernationsnorindividuals.
8.Thekeydeterminantofthestandardoflivinginacountryis
a.theamountofgoodsandservicesproducedfromeachhourofaworker’stime.
b.thetotalamountofgoodsandservicesproducedwithinthecountry.
c.thetotalamountofitsphysicalcapital.
d.itsgrowthrateofrealGDP.
9.Foragivenyear,productivityinaparticularcountryismostcloselymatchedwiththatcountry’s
a.levelofrealGDPoverthatyear.
b.levelofrealGDPdividedbyhoursworkedoverthatyear.
c.growthrateofrealGDPdividedbyhoursworkedoverthatyear.
d.growthrateofrealGDPperpersonoverthatyear.
10.Whichofthefollowingwould,byitself,revealthemostaboutacountry’sstandardofliving?
a.itslevelofcapital
b.thenumberofhoursworked
c.itsavailabilityofnaturalresources
d.itsproductivity
11.Productivity
a.isnearlythesameacrosscountries,andsoprovidesnohelpexplainingdifferencesinthestandardoflivingacrosscountries.
b.explainsverylittleofthedifferencesinthestandardoflivingacrosscountries.
c.explainssome,butnotmostofthedifferencesinthestandardoflivingacrosscountries.
d.explainsmostofthedifferencesinthestandardoflivingacrosscountries.
12.Productivityisthe
a.keydeterminantoflivingstandards,andgrowthinproductivityisthekeydeterminantofgrowthinlivingstandards.
b.keydeterminantoflivingstandards,butgrowthinproductivityisnotthekeydeterminantofgrowthinlivingstandards.
c.notthekeydeterminantoflivingstandards,butgrowthinproductivityisthekeydeterminantofgrowthinlivingstandards.
d.notthekeydeterminantoflivingstandards,andgrowthinproductivityisnotthekeydeterminantofgrowthinlivingstandards.
13.OverthelasttenyearsproductivitygrewfasterinMapolithaninRomeriawhilethepopulationandtotalhoursworkedremainedthesameinbothcountries.Itfollowsthat
a.realGDPperpersongrewfasterinMapolithaninRomeria.
b.realGDPperpersonmustbehigherinMapolithaninRomeria.
c.thestandardoflivingmustbehigherinMapolithaninRomeria.
d.Alloftheabovearecorrect.
14.OverthelasttenyearsproductivitygrewmoreslowlyinIberiathaninAirewhilethepopulationandtotalhoursworkedremainedthesameinbothcountries.Itfollowsthat
a.realGDPperpersonmustbelowerinIberiathaninAire.
b.realGDPperpersongrewmoreslowlyinIberiathaninAire.
c.thestandardoflivingmustbehigherinIberiathaninAire.
d.Alloftheabovearecorrect.
15.WhichofthefollowingcanexplainfastergrowthofrealGDPincountryAthaninCountryB?
a.bothgreaterpopulationgrowthandgreaterproductivitygrowthinCountryA
b.greaterpopulationgrowthinCountryA,butnotgreaterproductivitygrowthinCountryA
c.greaterproductivitygrowthinCountryA,butnotgreaterpopulationgrowthinCountryA
d.neithergreaterpopulationgrowthnorgreaterproductivitygrowthinCountryA
16.SupposethatrealGDPgrewmoreinCountryAthaninCountryBlastyear.
a.CountryAmusthaveahigherstandardoflivingthancountryB.
b.CountryA’sproductivitymusthavegrownfasterthancountryB’s.
c.Bothoftheabovearecorrect.
d.Noneoftheabovearecorrect.
17.Giventhatacountry’srealoutputhasincreased,inwhichofthefollowingcasescanwebesurethatitsproductivityalsohasincreased?
a.Thetotalnumberofhoursworkedrose.
b.Thetotalnumberofhoursworkedstayedthesame.
c.Thetotalnumberofhoursworkedfell.
d.Bothbandcarecorrect.
18.Phoenixfurnitureuses12workers,eachworkingeighthours,toproduce192rockingchairs.WhatisPhoenix’sproductivity?
a.192rockingchairs
b.24rockingchairsperhour
c.2rockingchairsperhour
d.2hoursperrockingchair
19.Hit-Itproduces320baseballbatsperdayusing2workerswhoeachwork8hoursperday.WhatisHitIt’sproductivity?
a.320baseballbats
b.160baseballbatsperhour
c.20baseballbatsperhour
d.Noneoftheaboveiscorrect.
20.InonedayAlphaCabinetCompanymade40cabinetswith320hoursoflabor.WhatwasAlphaCabinetCompany’sproductivity?
a.1/8cabinetperhour
b.8hourspercabinet
c.40cabinets
d.Noneoftheaboveiscorrect.
21.InonedayMadisonLaundrywashed4,000poundsoflaundrywith5workerswhoeachworked8hours.Whatwasitsproductivity?
a.4000poundsoflaundry
b.500poundsoflaundryperhour
c.100poundsoflaundryperhour
d.Noneoftheaboveiscorrect.
22.AlliedBusinessConsultantsemploysfiveresearchersthateachwork8hourdays.Inonedaytheresearchersprepared10reportsforits2largestclients.WhatwasAlliedBusinessConsultants’productivity?
a.10reports
b.5reportsperclient
c.1.25reportsperhour
d.1/4reportperhour
23.Youandyourfriendworktogetherfor4hourstoproduceatotalof8bookcases.What is productivity?
a.16bookcases
b.8bookcases
c.2bookcasesperhour
d.1bookcaseperhour
24.InonedayPortalComputerCompanymade400laptopswith1200hoursoflabor.Whatwasitsproductivity?
a.1/3laptopperhour
b.3hoursperlaptop
c.1200laptops
d.400laptops
25.Marylooksoverreportsonfourofherworkers.Jackmade30basketsin5hours.Rudymade32basketsin8hours.Sammade40basketsin12hours.Waltermade22basketsinfourhours.Whohasthegreatestproductivity?
a.Jack
b.Rudy
c.Sam
d.Walter
26.Abarbershopproduces192haircutsaday.Eachbarberintheshopworks8hoursperdayandproducesthesamenumberofhaircutsperhour.Iftheshop’sproductivityis2haircutsperhouroflabor,thenhowmanybarbersdoestheshopemploy?
a.8
b.12
c.16
d.Noneoftheaboveiscorrect.
27.Miller’sDairyproduces960gallonsofmilkperday.Eachmilkeratthedairyworks8hoursperdayandproducesthesamenumberofgallonsofmilkperhour.IftheDairy’sproductivityis12gallonsofmilkperhouroflabor,thenhowmanymilkersdoestheshopemploy?
a.8
b.10
c.80
d.120
28.Gramp’sPotatoChipsproduces2560bagsofpotatochipsaday.EachemployeeatGramp’sworks8hours.Ifthecompany’sproductivityis20bagsperhour,howmanypeopledoesGramp’semploy?
a.8
b.16
c.24
d.Noneoftheaboveiscorrect.
29.Greg’sIceCreamproduces1120gallonsoficecreamperday.Eachemployedworkssevenhoursandhasproductivityof20gallonsanhour.HowmanyemployeesdoesGreg’semploy?
a.160
b.56
c.8
d.Noneoftheaboveiscorrect.
30.AdamandDougbothbuildbirdhouses.Adamworks30hoursaweekandproduces15birdhouses.Dougworks20hoursaweekandproduces12birdhouses.Whichofthefollowingiscorrect?
a.Adam’sproductionandproductivityarehigherthanDoug’s.
b.Adam’sproductionishigherthanDoug’s,butDoug’sproductivityishigherthanAdam’s.
c.Doug’sproductionishigherthanAdam’s,butAdam’sproductivityishigherthanDoug’s.
d.Doug’sproductionandproductivityarehigherthanAdam’s.
31.AlexisandTarabothminesalt.Alexismines300poundsin20hours.Taramines400poundsin40hours.Whichofthefollowingiscorrect?
a.Alexis’sproductivityisgreaterthanTara’s.ThisdifferencecouldbeexplainedbyAlexishavingmorephysicalcapitalthanTara.
b.Alexis’sproductivityisgreaterthanTara’s.Thisdifferencecannotbeexplainedbyadifferenceinthephysicalcapitaleachhas.
c.Tara’sproductivityisgreaterthanAlexis’s.ThisdifferencecouldbeexplainedbyTarahavingmorephysicalcapitalthanAlexis.
d.Tara’sproductivityisgreaterthanAlexis’s.Thisdifferencecannotbeexplainedbyadifferenceinthephysicalcapitaleachhas.
32.Waldoworkseighthoursandproduces7unitsofgoodsperhour.Emersonworkssixhoursandproduces10unitsofgoodsperhour.
a.Waldo’sproductivityandoutputaregreaterthanEmerson’s.
b.Waldo’sproductivityisgreaterthanEmerson’sbuthisoutputisless.
c.Emerson’sproductivityandoutputaregreaterthanWaldo’s.
d.Emerson’sproductivityisgreaterthanWaldo’sbuthisoutputisless.
33.Popeyeproduces20cansofspinachin8hours.Wimpyproduces15hamburgersin10hours.Ifeachhamburgertradesfor1.5cansofspinach,then
a.Popeye’sproductionandproductivityaregreaterthanWimpy’s.
b.Popeye’sproductionisgreaterthanWimpy’s,buthisproductivityisless.
c.Wimpy’sproductionandproductivityaregreaterthanPopeye’s.
d.Wimpy’sproductionisgreaterthanPopeye’s,buthisproductivityisless.
34.Nathanownsabakerythatbakesonlycakes.Allofhisbakerswork8hoursperday.In2011, heemployed5bakerswhoproducedatotalof200cakeseachday.In2012,heemployed6bakerswhoproducedatotalof249cakeseachday.Thebakery’sproductivity
a.decreasedby2.33%.
b.increasedby2.33%.
c.increasedby3.75%.
d.increasedby24.50%.
35.Danielownsacoffeekiosk.Allofhisemployeeswork8hoursperday.In2011,heemployed6peoplewhoproducedatotalof912cupsofcoffeeeachday.In2012,hehiredaseventhemployeeandproductionincreasedto1008cupsofcoffeeeachday.InDaniel’skiosk, productivity
a.increasedbyabout10.5percent
b.increasedby9.5percent
c.decreasedbyabout5.6percent
d.decreasedbyabout5.3percent
36.In2011BuckeyeBrewingproduced1,000bottlesofgingeraleeachday.Itemployed10workerseachworking8hoursaday.In2012itproduced960bottlesofgingeraleeachdayemploying8workerswhoworked8hourseachday.ProductivityatBuckeyeBrewing
a.increasedby20%.
b.increasedby16.67%.
c.decreasedby1.67%.
d.decreasedby40%.
37.In2011,ModernElectronics,Inc.produced60,000calculators,employing80workers,eachofwhomworked8hoursperday.In2012,thesamefirmproduced76,500calculators,employing85workers,eachofwhomworked10hoursperday.ProductivityatModernElectronics
a.decreasedby4%
b.remainedconstant.
c.increasedby8.33%
d.increasedby27.50%
38.RealFoodsproduced400,000cansofdicedtomatoeslastyearand460,000cansofdicedtomatoesthisyear.Itemployedthesamenumberoflaborhourseachyear.RealFoods’productivity
a.decreased13%.
b.wasunchanged.
c.increased13%.
d.increased15%.
39.In2010,AcmeFoodsproduced300,000bagsofpretzels,employing12,000hoursoflabor.In2011,itproduced322,000bagsofpretzels,employing14,000hoursoflabor.AcmeFoodsproductivity
a.decreasedby8%.
b.wasunchanged.
c.increasedby6.8%.
d.increasedby7.3%.
40.Dilbert’sIncorporatedproduced5,000,000unitsofaccountingsoftwarein2010.Atthestartof2011thepointyhairedbossreducedtotalannualhoursofemploymentfrom10,000to8,000andproductionwas4,800,000.Thesenumbersindicatethatproductivity
a.fellby4%.
b.fellby20%.
c.roseby12%.
d.roseby20%.
41.Dilbert’sIncorporatedproduced6,000,000unitsofsoftwarein2010.Atthestartof2011thepointyhairedbossraisedemploymentfrom10,000totalannualhoursto14,000annualhoursandproductionwas7,000,000units.Thesenumberindicatethatproductivity
a.fellbyabout16.7%.
b.stayedthesame.
c.rosebyabout16.7%.
d.rosebyabout40%.
42.LastyeartheimaginarycountryofBasovahadapopulationof10,000,6,000peopleworked8hoursaday,andproducedarealGDPof$30,000,000.TheimaginarycountryofAndoviahadapopulationof12,000,8,000peopleworked8hoursaday,andproducedarealGDPof$38,000,000.Whichofthefollowingiscorrect?
a.BasovahadhigherproductivityandhigherrealGDPperperson.
b.AndoviahadthehigherproductivityandhigherrealGDPperperson.
c.BasovahadthehigherproductivitywhileAndoviahadthehigherrealGDPperperson.
d.AndoviahadthehigherproductivitywhileBasovahadthehigherrealGDPperperson.
43.CountryAhasapopulationof1,000,ofwhom800work8hoursadaytomake128,000finalgoods.CountryBhasapopulationof2,000,ofwhom1,800work6hoursadaytomake270,000finalgoods.
a.CountryAhashigherproductivityandhigherrealGDPperpersonthancountryB.
b.CountryAhaslowerproductivityandlowerrealGDPperpersonthancountryB.
c.CountryAhashigherproductivity,butlowerrealGDPperpersonthancountryB.
d.CountryBhaslowerproductivity,buthigherrealGDPperpersonthancountryB.
44.Worklandhasapopulationof10,000,ofwhom7,000work8hoursadaytoproduceatotalof224,000finalgoods.Laborlandhasapopulationof5,000,ofwhom3,000work7hoursadaytoproduceatotalof105,000finalgoods.
a.WorklandhashigherproductivityandhigherrealGDPperpersonthanLaborland.
b.WorklandhashigherproductivitybutlowerrealGDPperpersonthanLaborland.
c.WorklandhaslowerproductivitybuthigherrealGDPperpersonthanLaborland.
d.WorklandhaslowerproductivityandlowerrealGDPperpersonthanLaborland.
45.Uplandhasapopulationof15,000,ofwhom9,000work8hoursadaytoproducerealoutputof$342,000.Lowlandhasapopulationof8,000,ofwhom7,000work7hoursadaytoproducerealoutputof$171,500.
a.UplandhashigherproductivityandhigherrealGDPperpersonthanLowland.
b.UplandhashigherproductivitybutlowerrealGDPperpersonthanLowland.
c.UplandhaslowerproductivitybuthigherrealGDPperpersonthanLowland.
d.UplandhaslowerproductivityandlowerrealGDPperpersonthanLowland.
46.CountryAhadapopulationof1,000,ofwhom600workedanaverageof8hoursadayandhadaproductivityof2.5.CountryBhadapopulationof800,ofwhom560worked8hoursadayandhadproductivityof3.0.Country
a.AhadthehigherlevelofrealGDPandrealGDPperperson.
b.AhadthehigherlevelofrealGDPandCountryBhadthehigherlevelofrealGDPperperson
c.BhadthehigherlevelofrealGDPandCountryAhadthehigherlevelofrealGDPperperson
d.BhadthehigherlevelofrealGDPandrealGDPperperson.
47.CountryAhadapopulationof2,000,ofwhom1,300workedanaverageof8hoursadayandhadaproductivityof 5.CountryBhadapopulationof2,500,ofwhom1,700worked8hoursadayandhadproductivityof4.Country
a.AhadthehigherlevelofrealGDPandrealGDPperperson.
b.AhadthehigherlevelofrealGDPandCountryBhadthehigherlevelofrealGDPperperson
c.BhadthehigherlevelofrealGDPandCountryAhadthehigherlevelofrealGDPperperson
d.BhadthehigherlevelofrealGDPandrealGDPperperson.
Table25-1.
AthensandTroybothproduceonlyribsandbakedpotatoes.
Athens
Troy
Quantities
Ribs
200,000
300,000
BakedPotatoes
400,000
250,000
Baseyearprices
Ribs
$10
$10
BakedPotatoes
$4
$4
PopulationandEmployment
Population
6,000
8,000
Totalhoursofemployment
40,000
60,000
48.RefertoTable25-1.Whichofthefollowingiscorrect?
a.BothrealGDPandrealGDPperpersonarehigherinAthensthanTroy.
b.RealGDPishigherinAthenswhilerealGDPperpersonishigherinTroy
c.RealGDPishigherinTroywhilerealGDPperpersonishigherinAthens.
d.BothrealGDPandrealGDPperpersonarehigherinTroythanAthens.
49.RefertoTable25-1.Whichofthefollowingiscorrect?
a.BothproductivityandthestandardoflivingarehigherinAthensthanTroy.
b.ProductivityishigherinAthenswhilethestandardoflivingishigherinTroy
c.ProductivityishigherinTroywhilethestandardoflivingishigherinAthens.
d.BothproductivityandthestandardoflivingarehigherinTroythanAthens.
50.Lastyearacountryhad800workerswhoworkedanaverageof8hoursandproduced12,800units.Thisyearthesamecountryhad1000workerswhoworkedanaverageof8hoursandproduced14,000units.Thiscountry’sproductivitywas
a.higherthisyearthanlastyear.Apossiblesourceofthischangeinproductivityisachangeinthesizeofthecapitalstock.
b.higherthisyearthanlastyear.Achangeinthesizeofthecapitalstockdoesnotaffectproductivity.
c.lowerthisyearthanlastyear.Apossiblesourceofthischangeinproductivityisachangeinthesizeofthecapitalstock.
d.lowerthisyearthanlastyear.Achangeinthesizeofthecapitalstockdoesnotaffectproductivity.
51.BothArnoldandWillwork10hoursaday.ArnoldcanproducesixbasketsofgoodsperhourwhileWillcanproducefourbasketsofthesamegoodsperhour.ItfollowsthatArnold’s
a.productivityisgreaterthanWill’s.
b.outputisgreaterthanWill’s.
c.standardoflivingishigherthanWill’s.
d.Alloftheabovearecorrect.
52.EachdaySueworks8hoursandproduces7unitsofgoodsandservices.Maryworks10hourseachdayandproduces10unitsofgoodsandservices.Itfollowsthat
a.Sue’sproductivityishigherthanMary’s.
b.Mary’sproductivityishigherthanSue’s.
c.Sue’sincomeperhourwillbehigherthanMary’s.
d.Sue’sincomeperdaywillbehigherthanMary’s.
53.Whichofthefollowingitemsplaysaroleindeterminingproductivity?
a.physicalcapital
b.naturalresources
c.technologicalknowledge
d.Alloftheabovearecorrect.
54.Industrialmachineryisanexampleof
a.afactorofproductionthatinthepastwasanoutputfromtheproductionprocess.
b.technologicalknowledge.
c.aproductionfunction.
d.anitemwhichalwayshasthepropertycalledconstantreturnstoscale.
55.Industrialmachineryisanexampleof
a.afactorofproductionthatinthepastwasanoutputfromtheproductionprocess.
b.physicalcapital.
c.somethingthatinfluencesproductivity.
d.Alloftheabovearecorrect.
56.TheKarmicDeedRestaurantusesallofthefollowingtoproducevegetarianmeals.Whichofthemisanexampleofphysicalcapital?
a.theowner’sknowledgeofhowtopreparevegetarianentrees
b.themoneyintheowner’saccountatthebankfromwhichsheborrowedmoney
c.thetablesandchairsintherestaurant
d.thefreshfruits,vegetables,andgrainstherestaurantusestoprepareitsmeals
57.Theequipmentandstructuresavailabletoproducegoodsandservicesarecalled
a.physicalcapital.
b.humancapital.
c.theproductionfunction.
d.technology.
58.Thesaws,lathes,anddrillpressesthatwoodworkersatCedarValleyFurnitureusetoproducefurniturearecalled
a.humancapital.
b.physicalcapital.
c.naturalresources.
d.technologicalknowledge.
59.Which of thefollowing isnotanexampleofphysicalcapital?
a.anewfactorybuilding
b.adeliveryvan
c.theknowledgeofworkers
d.theofficechairinalawyer’soffice
60.Whichofthefollowingisanexampleofphysicalcapital?
a.thestrengthofworkers
b.onthe job training
c.financialassetslikecashandbonds
d.theequipmentinafactory
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