Question 1

Which of the following would increase productivity?

Accepted Answer

All of the choices listed above would increase productivity. An increase in the physical capital stock per worker would mean that workers have more tools and equipment to work with, which can increase their efficiency. An increase in human capital per worker, such as through education and training, can also increase the productivity of workers. Additionally, an increase in natural resources per worker could mean that there are more resources available to be used in production, which can increase output.

Question 2

If an economy with constant returns to scale were to double its physical capital stock,its available natural resources,and its human capital,but leave the size of the labor force the same,

Accepted Answer

If an economy has constant returns to scale, doubling all inputs will result in a doubling of output. However, since the labor force remains the same, the increase in human capital will lead to a more efficient utilization of the existing labor force, resulting in an increase in productivity. However, the increase in output and productivity will not be as much as double, as there are limits to how much natural resources can be used efficiently and how much capital can be utilized per worker.

Question 3

You sell fruit smoothies.One day you double the time you spend and double all your inputs,and make twice as many smoothies.Your smoothie production function has

Accepted Answer

When the time and inputs are doubled, the smoothie production is also doubled, indicating constant returns to scale. There is no increase or decrease in the proportion of output to the inputs used. Therefore, C is the correct choice.

Question 4

In a particular production process,if the quantities of all inputs used are increased by 60 percent,then the quantity of output increases by 60 percent as well.This means that

Accepted Answer

The fact that increasing all inputs by 60% results in a proportional increase in output indicates that the production function has constant returns to scale, meaning that doubling all inputs would double output, tripling inputs would triple output, and so on. This does not suggest that the production process cannot be enhanced by technological advances or that there are limits on growth, and there may or may not be a mathematical representation of the production function.

Question 5

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,productivity would

Accepted Answer

If the number of workers in an economy doubled and all other inputs stayed the same, the productivity would fall, but it would still be greater than one-half of its former value. This is because the constant returns to scale mean that doubling the number of workers would not double the output, but it would increase it by less than double. Therefore, productivity would decrease but still be greater than one-half of its former value.

Question 6

Other things the same,which of the following could explain an increase in productivity?

Accepted Answer

An increase in productivity could be the result of either an increase in human capital (better training, education, skills, or experience) or an increase in physical capital (technology or equipment upgrades). Thus, both choices A and B could potentially explain an increase in productivity, but choice A is more comprehensive.

Question 7

If a production function has constant returns to scale,output can be doubled if

Accepted Answer

If the production function has constant returns to scale, then when all inputs are doubled, the output will also double. This is because the production function exhibits constant returns to scale when increasing inputs proportionally results in a proportional increase in output. Therefore, choice C is the correct answer.

Question 8

Refer to Scenario 12-1.K represents the quantity of

Accepted Answer

K represents the quantity of physical capital only, as H represents human capital and N represents nonrenewable natural resources.

Question 9

In a particular production process,if the quantities of all inputs used double,then the quantity of output doubles as well.This means that

Accepted Answer

If doubling all inputs results in a doubling of output, then the production function exhibits constant returns to scale. This means that increasing inputs by a certain factor (in this case, 2) will increase output by that same factor. This does not necessarily mean that the production process cannot be enhanced by technological advances or that there is a limit to growth. It simply means that inputs and outputs are proportionally related.

Question 10

If your firm's production function has constant returns to scale and you increase all your inputs by 60%,then your firm's output will

Accepted Answer

If the production function has constant returns to scale, then output will increase proportionally to the increase in inputs. Therefore, if inputs are increased by 60%, output will also increase by 60%.

Question 11

If your firm's production function has constant returns to scale,and if you double all your inputs,then your firm's productivity will

Accepted Answer

The answer of If your firm's production function has constant...

Question 12

In the equation for the production function H/L represents

Accepted Answer

The answer of In the equation for the production function...

Question 13

In the equation for the production function Y/L represents

Accepted Answer

The answer of In the equation for the production function...

Question 14

Suppose there are constant returns to scale.Now suppose that over time a country doubles its workers,its natural resources,its physical capital,and its human capital,but its technology is unchanged.Which of the following would double?

Accepted Answer

With constant returns to scale and all inputs doubling, output must also double. However, productivity is a measure of output per unit of input, so if input quantities all double while technology remains the same, productivity will not increase. Therefore, option B is the correct answer.

Question 15

Which of the following is a determinant of productivity?

Accepted Answer

All three factors listed (human capital per worker, physical capital per worker, and natural resources per worker) can contribute to productivity. Human capital refers to the knowledge and skills workers possess, which can lead to increased efficiency and innovation. Physical capital refers to the tools and equipment used by workers to produce goods and services, which can improve efficiency and output. Finally, natural resources can affect productivity by providing the raw materials necessary for production.

Question 16

Suppose a country imposes new restrictions on how many hours people can work.If these restrictions reduce the total number of hours worked in the economy,but all other factors that determine output are held fixed,then

Accepted Answer

If the total number of hours worked in the economy is reduced, it means that the output produced will also decrease since there are fewer hours of labor input. However, the productivity of the remaining workers may increase as they will have to work more efficiently to maintain the same level of output with fewer hours. Therefore, productivity will rise while output falls.

Question 17

An economy's production function has the constant-returns-to-scale property.If the economy's labor force doubled and all other inputs stayed the same,then real GDP would

Accepted Answer

The answer of An economy's production function has the constant-returns-to-scale...

Question 18

If there are constant returns to scale,the production function can be written as

Accepted Answer

In a production function with constant returns to scale, increasing all inputs by the same proportion should increase output by the same proportion. Option C is the only one that shows this relationship, where all inputs are divided by L (the amount of labor) to obtain the output per unit of labor. This means that if all inputs are increased by the same proportion, the resulting output per unit of labor will remain the same.

Question 19

If your firm's production function has constant returns to scale,then if you double all your inputs,your firm's output will

Accepted Answer

Constant returns to scale means that when all inputs are doubled, the output will also double. Therefore, the productivity (output per unit of input) will remain the same.

Question 20

You bake cookies.One day you double the time you spend,double the number of chocolate chips,flour,eggs,and all your other inputs,and bake twice as many cookies.Your cookie production function has

Accepted Answer

The answer of You bake cookies.One day you double the...

Quiz 25: Production and Growth