Question 1

Increases in both human capital per worker and physical capital per worker increase productivity.

Accepted Answer

Both human capital (education, skills, and training) and physical capital (machinery, technology, tools) per worker contribute to increased productivity, allowing workers to produce more goods or services in less time. By improving their knowledge and skills, workers can perform their tasks more efficiently while physical capital can help automate and streamline production processes.

Question 2

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Accepted Answer

A country's standard of living is determined by a variety of factors, including education, infrastructure, political stability, technology, and trade. While natural resources can certainly contribute to a country's economy, they are not the sole determinant of a high standard of living. Examples of countries without significant natural resources that have high standards of living include Singapore, Japan, and South Korea, which rely on a highly skilled workforce and investment in technology and innovation.

Question 3

Petroleum is an example of a nonrenewable resource.

Accepted Answer

Petroleum, also known as crude oil, is a fossil fuel that has a finite amount on earth and takes millions of years to form. Once it is extracted and used, it cannot be easily replaced or replenished, making it a nonrenewable resource.

Question 4

Like physical capital, human capital is a produced factor of production.

Accepted Answer

Human capital refers to the knowledge, skills, and abilities that individuals possess and can use to produce goods and services. It is produced through education, training, and other forms of investment in people.

Question 5

Journey Motorcycles produced 100 motorcycles using 50 workers who each worked 8 hours a day. Journey's productivity was 1/4.

Accepted Answer

The answer of Journey Motorcycles produced 100 motorcycles using 50...

Question 6

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education, training, and experience.

Accepted Answer

Human capital is indeed defined as the knowledge, skills, and abilities that workers acquire through education, training, and experience.

Question 7

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Accepted Answer

To calculate productivity, we need to divide the units of goods and services produced by the number of hours of labor used. 
Country A's productivity = 7,000 units / 700 hours = 10 units per hour of labor 
Country B's productivity = 5,500 units / 500 hours = 11 units per hour of labor 
Therefore, productivity is lower in Country A than in Country B.

Question 8

If a production function has constant returns to scale, then if all inputs double so does production.

Accepted Answer

Constant returns to scale means that if all inputs are multiplied by a constant factor, then output is also multiplied by the same constant factor. Therefore, if all inputs double, production will also double.

Question 9

Over the period 1900­2010, Brazil's rate of economic growth exceeded that of China.

Accepted Answer

The answer of Over the period 1900­2010, Brazil's rate of...

Question 10

A forest is an example of a nonrenewable resource.

Accepted Answer

A forest is a renewable resource as long as it is managed and harvested in a responsible and sustainable manner. Through proper management practices such as reforestation and selective harvesting, forests can regenerate and continue to provide benefits such as wood, wildlife habitat, and carbon storage.

Question 11

The same size decrease in the amount of capital stock per worker will cause output per worker to fall by more in a country with a relatively high level of capital per worker than in a country with a relatively low level of capital per worker.

Accepted Answer

According to the principle of diminishing returns in economics, in a country with a relatively low level of capital per worker, a decrease in the amount of capital stock per worker will have a more significant impact on output per worker because when capital per worker is initially low, it is more productive. Conversely, in a country with a high level of capital per worker, the impact of a decrease in capital stock per worker on output per worker is less pronounced due to the diminishing marginal productivity of capital.

Question 12

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Accepted Answer

Historical trends show that despite increasing consumption, technological advancements and better extraction methods have often led to an increase in the availability of many natural resources, causing their prices to decrease relative to other goods when adjusted for inflation.

Question 13

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Accepted Answer

Standard of living is closely related to productivity. The higher the productivity, the higher the standard of living. As the productivity level in Indonesia is lower than that of the United States, it is expected that Indonesians have a lower standard of living.

Question 14

If a country has a higher level of productivity than another, then it also has a higher level of real GDP.

Accepted Answer

Higher productivity means a country can produce more output per unit of input, but it doesn't necessarily translate to a higher level of real GDP. Real GDP is influenced by other factors as well, such as the total amount of labor and capital in the economy. A country with lower productivity could still have a higher real GDP if it has significantly more resources or labor.

Question 15

Over the period 1890-2010, Japan experienced a 2.65 percent average annual growth rate of real GDP per person.

Accepted Answer

This statement is true, based on data from the World Bank. From 1890 to 2010, Japan's real GDP per capita grew at an average annual rate of 2.65 percent. However, the growth rate was not constant throughout this entire period and was influenced by various events, such as World War II and the Japanese economic miracle in the post-war era.

Question 16

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Accepted Answer

While there is some truth in the statement that rich countries generally experienced higher GDP growth rates than poor countries over the last 120 years, the assertion that poor countries got poorer is not accurate. In fact, many poor countries have experienced significant economic growth over the last century, although often from a very low base. In recent decades, some developing countries have even experienced faster economic growth than many developed countries, narrowing the income gap somewhat.

Question 17

As capital per worker rises, output per worker rises. However, this increase in output per worker is smaller at smaller levels of existing capital per worker.

Accepted Answer

As capital per worker rises, output per worker indeed increases, but the increase in output per worker is smaller at higher levels of existing capital per worker due to diminishing returns to capital.

Question 18

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Accepted Answer

Constant returns to scale occur when increasing all inputs by a certain proportion results in output increasing by the same proportion, not a point where increasing inputs will no longer increase output.

Question 19

If it could increase its growth rates slightly, a country with low income would catch up with rich countries in about ten years.

Accepted Answer

Catching up with rich countries is not just about increasing growth rates slightly, it also requires structural reforms, investments in education, technology, infrastructure, and innovation, as well as good governance and political stability.

Question 20

Productivity can be computed as the number of hours worked divided by output.

Accepted Answer

Productivity is calculated by dividing output by the number of hours worked, not the other way around. The formula is usually expressed as output per hour worked.

Quiz 7: Production and Growth

Increases in both human capital per worker and physical capital per worker increase productivity.

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Petroleum is an example of a nonrenewable resource.

Like physical capital, human capital is a produced factor of production.

Journey Motorcycles produced 100 motorcycles using 50 workers who each worked 8 hours a day. Journey's productivity was 1/4.

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education, training, and experience.

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

If a production function has constant returns to scale, then if all inputs double so does production.

Over the period 19002010, Brazil's rate of economic growth exceeded that of China.

A forest is an example of a nonrenewable resource.

The same size decrease in the amount of capital stock per worker will cause output per worker to fall by more in a country with a relatively high level of capital per worker than in a country with a relatively low level of capital per worker.

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

If a country has a higher level of productivity than another, then it also has a higher level of real GDP.

Over the period 1890-2010, Japan experienced a 2.65 percent average annual growth rate of real GDP per person.

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

As capital per worker rises, output per worker rises. However, this increase in output per worker is smaller at smaller levels of existing capital per worker.

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

If it could increase its growth rates slightly, a country with low income would catch up with rich countries in about ten years.

Productivity can be computed as the number of hours worked divided by output.

Quiz 7: Production and Growth

Increases in both human capital per worker and physical capital per worker increase productivity.

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Petroleum is an example of a nonrenewable resource.

Like physical capital, human capital is a produced factor of production.

Journey Motorcycles produced 100 motorcycles using 50 workers who each worked 8 hours a day. Journey's productivity was 1/4.

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education, training, and experience.

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

If a production function has constant returns to scale, then if all inputs double so does production.

Over the period 1900­2010, Brazil's rate of economic growth exceeded that of China.

A forest is an example of a nonrenewable resource.

The same size decrease in the amount of capital stock per worker will cause output per worker to fall by more in a country with a relatively high level of capital per worker than in a country with a relatively low level of capital per worker.

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

If a country has a higher level of productivity than another, then it also has a higher level of real GDP.

Over the period 1890-2010, Japan experienced a 2.65 percent average annual growth rate of real GDP per person.

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

As capital per worker rises, output per worker rises. However, this increase in output per worker is smaller at smaller levels of existing capital per worker.

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

If it could increase its growth rates slightly, a country with low income would catch up with rich countries in about ten years.

Productivity can be computed as the number of hours worked divided by output.

Over the period 19002010, Brazil's rate of economic growth exceeded that of China.