Question 1

How is a nation's standard of living determined?

Accepted Answer

A nation's standard of living is determined by its productivity because productivity measures the amount of goods and services produced per unit of input (such as labor). Higher productivity leads to increased wealth and a higher standard of living, as there are more goods and services available for consumption. Gross domestic product (B) and national income (C) are both measures of a nation's economic output, but do not necessarily directly reflect the standard of living of citizens. The size of a nation's labor force (D) may contribute to productivity, but is not the sole determinant of a nation's standard of living.

Question 2

Why are Canadian workers more productive than the Chinese?

Accepted Answer

Having more capital to work with can lead to greater efficiency and productivity in the workplace. This can include better equipment, technology, and infrastructure. Additionally, Canada has higher labor standards which can lead to a more efficient workforce.

Question 3

In 2014, real GDP in Latania was $750 billion and the population was 3 million. In 2015, real GDP was $990 billion and the population was 3.3 million. What was the approximate growth rate of real GDP per person?

Accepted Answer

The answer of In 2014, real GDP in Latania was...

Question 4

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

Accepted Answer

Iris works fewer hours, but produces more units per hour than Laurie. Therefore, Iris has higher productivity and output than Laurie.

Question 5

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 6

What is a direct determinant of productivity?

Accepted Answer

Human capital, which refers to the knowledge, skills, and abilities of the workforce, is a direct determinant of productivity. Invested in human capital can lead to increases in productivity and economic growth. Wage, price of natural resources, and unemployment rate can also indirectly affect productivity, but they are not direct determinants.

Question 7

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

To find the growth rate of real GDP per person, we first need to calculate the real GDP per person for both years.

For the first year: 
Real GDP per person = 620 billion / 2.3 million = $269,565.22

For the second year: 
Real GDP per person = 502 billion / 2.0 million = $251,000

Now we can find the growth rate: 
((269,565.22 - 251,000) / 251,000) * 100 = 7.4%

Rounding this to the nearest percentage gives us a growth rate of approximately 7%. Therefore, the best choice is B.

Question 8

What would an economist call the saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce chests and cabinets?

Accepted Answer

The saws, lathes, and drill presses are physical assets used in the production process, making them physical capital. A is incorrect because human capital pertains to the knowledge and skills of the workers, while C is too general and D is more applicable to the knowledge and techniques used in the production process.

Question 9

Last year, real GDP per person in Olympus was $6500. The year before, it was $5500. What was the growth rate of real GDP per person?

Accepted Answer

The answer of Last year, real GDP per person in...

Question 10

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, which include labor, capital, land, and entrepreneurship.

Question 11

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.

Question 12

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

Accepted Answer

Productivity is calculated as output/input or in this case, chairs produced/hours worked. 
The workers produce 160 chairs in 80 hours, which means they produce 2 chairs per hour. Therefore, the correct answer is B) 2 chairs per hour.

Question 13

Which of the following would NOT be considered physical capital?

Accepted Answer

On-the-job training is a form of human capital, not physical capital, as it refers to the skills and knowledge that workers acquire through experience and education. The other options are all examples of physical capital, which are tangible goods used in the production process.

Question 14

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 as physical capital. It is one of the factors of production along with labor and natural resources.

Question 15

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

Accepted Answer

Productivity, which measures the amount of goods and services produced per unit of input, is a key driver of economic growth and standard of living. Countries with higher levels of productivity are able to produce more output with the same amount of input, leading to higher levels of economic growth and higher standards of living for its citizens. Countries with lower levels of productivity tend to have lower standards of living. Therefore, productivity explains most of the differences in standard of living across countries.

Question 16

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

Accepted Answer

Productivity and standard of living are closely related. When a country's productivity is high, it can create more wealth and income, which can be used to improve the quality of life for its citizens. With higher productivity, there can be more resources to invest in education, healthcare, infrastructure, and other important areas that can impact a country's standard of living. Conversely, a low productivity can lead to lower wages and fewer resources for investment, which can hold back a country's overall standard of living.

Question 17

In 2014, Freedonia had a population of 2700 and real GDP of about $1,080,000. In 2013, 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 2013 and 2014?

Accepted Answer

The answer of In 2014, Freedonia had a population of...

Question 18

What is a correct way to measure productivity?

Accepted Answer

Productivity is the ratio of output to the amount ofinputs used in production. Therefore, dividing output by the number of hours worked would be the correct way to measure productivity. Option B is the correct choice.

Question 19

Dawn looks over reports on five of her workers. Carol made 25 baskets in 5 hours. Peter made 30 baskets in 6 hours. Rob made 40 baskets in 10 hours. Jack made 55 baskets in 10 hours. Jacqueline made 21 baskets in 3 hours. Who has the greatest productivity?

Accepted Answer

The answer of Dawn looks over reports on five of...

Question 20

Which of the following would be considered physical capital?

Accepted Answer

Physical capital refers to the tangible assets used in the production process, such as machinery, equipment, and buildings. The cappuccino machine at the Garden of Eat'n Cafe is an example of physical capital. 
B, C, and D are not considered physical capital as they do not refer to tangible assets used in the production process.

Quiz 7: Production and Growth