Question 1

Last year, real GDP in Oceania was $620 billion and the population was 2.3 million. The year before, real GDP was $502 billion and the population was 2.0 million. What was the approximate growth rate of real GDP per person?

Accepted Answer

First, we need to calculate the real GDP per person for both years:

- Real GDP per person in the current year: $620 billion / 2.3 million = $269.57 thousand/person 
- Real GDP per person in the previous year: $502 billion / 2.0 million = $251 thousand/person

Next, we can calculate the growth rate of real GDP per person:

- Growth rate = [(Current year GDP per person - Previous year GDP per person) / Previous year GDP per person] x 100% 
- Growth rate = [($269.57 - $251) / $251] x 100% 
- Growth rate ≈ 7%

Therefore, the approximate growth rate of real GDP per person is 7 percent.

Question 2

In 2018, real GDP in the Kingdom of Fife was $500 billion and the population was 2 million. In 2019, real GDP was $660 billion and the population was 2.2 million. What was the approximate growth rate of real GDP per person?

Accepted Answer

The answer of In 2018, real GDP in the Kingdom...

Question 3

What is a direct determinant of productivity?

Accepted Answer

Human capital, consisting of knowledge, skills, and abilities, directly affects a worker's productivity. A highly skilled and educated workforce can perform tasks more efficiently and effectively, leading to higher productivity levels.

Question 4

Which of the following would NOT be considered physical capital?

Accepted Answer

On-the-job training is not a physical object or tool that can be touched or used to produce goods or services. It is a form of human capital that helps improve the skills and knowledge of workers. The other options (sewing machine, computer, desk) are all examples of physical capital.

Question 5

What do economists call the equipment and structures available to produce goods and services?

Accepted Answer

Economists call the equipment and structures available to produce goods and services physical capital.

Question 6

Which of the following would be considered physical capital?

Accepted Answer

Physical capital refers to tangible assets that are used to produce goods or services, and the projector at a cinema is an example of this. Milk and cheese (B) are considered as raw materials or inputs, while the skills and knowledge of a chef (C) are considered human capital. The number of hours people spend in the gym (D) does not qualify as either physical or human capital.

Question 7

Kawartha Furniture uses 8 workers working 10 hours to produce 160 rocking chairs. What is the productivity of these workers?

Accepted Answer

Productivity is measured by output per unit of input. In this case, the input is the number of workers and hours worked, and the output is the number of chairs produced. 
Productivity = Output/Input 
Input = 8 workers x 10 hours = 80 worker-hours 
Output = 160 chairs 
Productivity = 160 chairs / 80 worker-hours = 2 chairs per hour. 
Therefore, the answer is B.

Question 8

Monica works 8 hours and produces 7 units of goods per hour. Rachel works 6 hours and produces 10 units of goods per hour. What can we conclude?

Accepted Answer

Rachel's productivity is 10 units per hour, which is greater than Monica's 7 units per hour. Rachel's total output is 60 units (6 hours * 10 units/hour), which is also greater than Monica's total output of 56 units (8 hours * 7 units/hour).

Question 9

Lesley looks over reports on four of her workers. Smith made 30 baskets in 6 hours. Dex made 40 baskets in 10 hours. Leo made 55 baskets in 10 hours. Neve made 21 baskets in 3 hours. Who has the greatest productivity?

Accepted Answer

Neve has the greatest productivity with 7 baskets per hour (21 baskets / 3 hours).

Question 10

How does productivity explain the differences in standard of living across countries?

Accepted Answer

Productivity is the main determinant of a country's standard of living. Higher productivity means that a country can produce more goods and services with the same amount of resources, leading to higher incomes and a higher standard of living for the population. Countries with high levels of productivity tend to have higher standards of living, while those with low productivity levels tend to have lower standards of living. While other factors such as population and natural resources can also impact the standard of living, productivity is the primary driver.

Question 11

In 2018, Freedonia had a population of 2700 and real GDP of about $1,080,000. In 2017, it had a population of 2500 and real GDP of about $1,000,000. What was the approximate growth rate of real GDP per person in Freedonia between 2017 and 2018?

Accepted Answer

The answer of In 2018, Freedonia had a population of...

Question 12

What is the average amount of goods and services produced from each hour of a worker's time called?

Accepted Answer

The average amount of goods and services produced from each hour of a worker's time is called productivity. Per capita GDP and per capita national income are measurements of overall economic output per person, while human capital refers to the skills and knowledge possessed by a workforce.

Question 13

How is a nation's standard of living determined?

Accepted Answer

A nation's standard of living is determined by its productivity, or the amount of goods and services produced per person. This is a better measure than gross domestic product (B) or national income (C) because those measures do not account for population size. The size of the labor force (D) is a factor in productivity, but not the sole determinant of a nation's standard of living.

Question 14

Tom works 6 hours a day and Jerry works 8 hours. Tom can produce 6 baskets of goods while Jerry can produce 7 baskets. What can we conclude?

Accepted Answer

Tom's productivity is higher because he produces 1 basket per hour (6 baskets/6 hours), while Jerry produces less than 1 basket per hour (7 baskets/8 hours).

Question 15

Why are Canadian workers more productive than the Chinese?

Accepted Answer

Canadians have more capital to work with, meaning they have access to better technology and equipment that can increase their productivity compared to Chinese workers who may have limited resources.

Question 16

What would an economist call the tractors, hay balers, and combine harvesters that are used on a farm?

Accepted Answer

Tractors, hay balers, and combine harvesters are all physical items used to produce agricultural goods. Therefore, they would be classified as physical capital in economics.

Question 17

Which statement best describe the relationship between productivity and standard of living?

Accepted Answer

Productivity is a key determinant of a country's standard of living. Higher productivity leads to increased output and often results in higher wages and better working conditions for workers, which can improve the overall quality of life in a country. Additionally, higher productivity can result in more resources being available for investment in education, healthcare, and infrastructure, all of which can contribute to an improved standard of living.

Question 18

Last year, real GDP per person in Midlothian was $8000. The year before, it was $6000. What was the growth rate of real GDP per person?

Accepted Answer

The growth rate of real GDP per person is calculated as [(New GDP - Old GDP) / Old GDP] * 100. So, [(8000 - 6000) / 6000] * 100 = 33.33 percent.

Question 19

What do economists call the inputs used to produce goods and services?

Accepted Answer

Economists call the inputs used to produce goods and services as factors of production. These factors include land, labor, capital, and entrepreneurship.

Question 20

What is a correct way to measure productivity?

Accepted Answer

Productivity is typically measured by dividing output by the number of hours worked, as this gives a measure of how much output is being generated per unit of time (in this case, per hour). Dividing the number of workers by output or dividing the number of hours worked by output would not give a meaningful measure of productivity, and dividing output by the number of workers would give a measure of labor productivity but would not take into account the amount of time worked.

Quiz 7: Production and Growth