Question 1

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?
A)the owner's knowledge of how to prepare vegetarian entrees
B)the money in the owner's account at the bank from which she borrowed money
C)the tables and chairs in the restaurant
D)the fresh fruits, vegetables, and grains the restaurant uses to prepare its meals

Accepted Answer

Physical capital refers to the tangible assets that a business uses to produce goods or services. In this case, the tables and chairs in the restaurant are physical capital. The owner's knowledge (A) and the money in the owner's account (B) are not tangible assets and therefore do not qualify as examples of physical capital. The fresh fruits, vegetables, and grains (D) are inputs or resources, but not physical capital.

Question 2

Which of the following is physical capital?
A)the strength of workers
B)the knowledge of workers
C)financial assets like cash and bonds
D)the equipment in a factory

Accepted Answer

Physical capital refers to tangible assets such as machinery, buildings, and vehicles that are used in the production process. The equipment in a factory is an example of physical capital. Choices A, B, and C refer to human capital or financial capital.

Question 3

Dilbert's Incorporated produced 6,000,000 units of software in 2008. At the start of 2009 the pointy-haired boss raised employment from 10,000 total annual hours to 14,000 annual hours and production was 7,000,000 units. These number indicate that productivity
A)fell by about 16.7%.
B)stayed the same.
C)rose by about 16.7%.
D)rose by about 40%.

Accepted Answer

The answer of Dilbert's Incorporated produced 6,000,000 units of software...

Question 4

Table 12-1.Athens and Troy both produce only ribs and baked potatoes. 
-Refer to Table 12-1. Which of the following is correct?
A)Both productivity and the standard of living are higher in Athens than Troy.
B)Productivity is higher in Athens while the standard of living is higher in Troy
C)Productivity is higher in Troy while the standard of living is higher in Athens.
D)Both productivity and the standard of living are higher in Troy than Athens.

Accepted Answer

The answer of Table 12-1.Athens and Troy both produce only...

Question 5

The equipment and structures available to produce goods and services are called
A)physical capital.
B)human capital.
C)the production function.
D)technology.

Accepted Answer

The term "physical capital" refers to the tangible equipment and structures necessary in the production of goods and services. Thus, answer choice A is the correct answer. Answer choice B refers to the intangible knowledge and skills possessed by individuals, while answer choice C refers to the relationship between inputs and outputs in production. Answer choice D is also related to the production process, but specifically refers to the methods and techniques used in production, rather than the physical equipment and structures.

Question 6

Country A has a population of 1,000, of whom 700 worked an average of 8 hours a day and had a productivity of 2.5. Country B has a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. The country with the higher real GDP was
A)country A, and the country with higher real GDP per person was country A.
B)country A, and the country with higher real GDP per person was country B.
C)country B, and the country with higher real GDP per person was country A.
D)country B, and the country with higher real GDP per person was country B.

Accepted Answer

The answer of Country A has a population of 1,000,...

Question 7

Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods.
A)Country A has higher productivity and higher real GDP per person than country B.
B)Country A has lower productivity and lower real GDP per person than country B.
C)Country A has higher productivity, but lower real GDP per person than country B.
D)Country B has lower productivity, but higher real GDP per person than country B.

Accepted Answer

The answer of Country A has a population of 1,000,...

Question 8

Which of the following would be considered physical capital?
A)the refrigerators at Uncle Bob's restaurant
B)rivers on which goods are transported
C)the skills and knowledge of a lawyer
D)All of the above are correct.

Accepted Answer

Physical capital refers to tangible objects that are used in the production of goods and services. The refrigerators at Uncle Bob's restaurant are physical assets that are used to store and preserve food items.

B) Rivers are not physical capital as they are part of the natural environment and cannot be used as tools or equipment for production.

C) The skills and knowledge of a lawyer are considered human capital, which refers to the education, experience, and expertise of individuals that contribute to the production of goods and services.

D) Therefore, option A is the only correct choice as the refrigerators are a physical asset that contributes to the production of goods at Uncle Bob's restaurant.

Question 9

Which of the following would not be considered physical capital?
A)a new factory building
B)a computer used to help Mercury Delivery Service keep track of its orders
C)on-the-job training
D)a desk used in an accountant's office

Accepted Answer

Physical capital refers to tangible assets like buildings, computers, machinery, and equipment used in the production of goods and services. On-the-job training, while important for human capital development, is not a physical asset and hence cannot be considered physical capital.

Question 10

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 4,000 work 12 hours a day to produce a total of 120,000 final goods.
A)Workland has higher productivity and higher real GDP per person than Laborland.
B)Workland has higher productivity but lower real GDP per person than Laborland.
C)Workland has lower productivity but higher real GDP per person than Laborland.
D)Workland has lower productivity and lower real GDP per person than Laborland.

Accepted Answer

The answer of Workland has a population of 10,000, of...

Question 11

Industrial machinery is an example of
A)a factor of production that in the past was an output from the production process.
B)physical capital.
C)something that influences productivity.
D)All of the above are correct.

Accepted Answer

The answer of Industrial machinery is an example of
A)a factor...

Question 12

Each day Sonja works 8 hours and produces 8 units of goods and services. Emma works 10 hours each day and produces 9 units of goods and services. It follows that
A)Sonja's productivity is higher than Emma's.
B)Emma's productivity is higher than Sonja's.
C)Emma's income per hour will be higher than Sonja's.
D)Sonja's income per day will be higher than Emma's.

Accepted Answer

Sonja produces 1 unit per hour (8 units/8 hours), while Emma produces 0.9 units per hour (9 units/10 hours), making Sonja more productive.

Question 13

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called
A)human capital.
B)physical capital.
C)natural resources.
D)technological knowledge.

Accepted Answer

The saws, lathes, and drill presses are physical tools and equipment that are used to produce furniture, which is a form of physical capital in the business. Human capital encompasses the abilities and skills of the woodworkers, while natural resources refer to the wood used to make the furniture. Technological knowledge could be applicable in the use and maintenance of the equipment, but it does not encompass the equipment itself.

Question 14

Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500.
A)Upland has higher productivity and higher real GDP per person than Lowland.
B)Upland has higher productivity but lower real GDP per person than Lowland.
C)Upland has lower productivity but higher real GDP per person than Lowland.
D)Upland has lower productivity and lower real GDP per person than Lowland.

Accepted Answer

Upland's total real output is higher than Lowland's ($342,000 > $171,500) even though its population is larger. This means that Upland has higher productivity. Additionally, Upland's real GDP per person is also higher than Lowland's ($342,000/15,000 > $171,500/8,000), indicating that Upland is more prosperous on a per person basis.

Question 15

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's
A)productivity is greater than Will's.
B)output is greater than Will's.
C)standard of living is higher than Will's.
D)All of the above are correct.

Accepted Answer

Arnold's productivity is greater than Will's as he can produce 6 baskets of goods per hour while Will can produce only 4 baskets of the same goods per hour. Therefore, Arnold's output is also higher than Will's. This, in turn, can lead to a higher standard of living for Arnold as he is able to produce more in less time leading to potentially higher wages and more opportunities for advancement. Hence, all of the above choices are correct.

Question 16

Which of the following items plays a role in determining productivity?
A)physical capital
B)natural resources
C)technological knowledge
D)All of the above are correct.

Accepted Answer

All of the above items play a role in determining productivity. Physical capital such as machines and tools can increase productivity through efficient production processes. Natural resources can also increase productivity by providing materials necessary for production. Technological knowledge drives innovation, allowing for new and more efficient ways of producing goods and services.

Question 17

Last year the imaginary country of Bahkan had a population of 10,000, 6,000 people worked 8 hours a day and produced a real GDP of $30,000,000. The imaginary country of San Andreo had a population of 15,000, 8,000 people worked 7 hours a day and produced a real GDP of $33,000,000. Which of the following is correct?
A)Bahkan had the higher productivity and the higher real GDP per person.
B)San Andreo had the higher productivity and the higher real GDP per person.
C)Bahkan had the higher productivity while San Andreo had the higher real GDP per person.
D)San Andreo had the higher productivity while Bahkan had the higher real GDP per person.

Accepted Answer

Bahkan had the higher productivity (30,000,000/6,000*8 = $625 per hour) and the higher real GDP per person (30,000,000/10,000 = $3,000).

Question 18

Last year a country had 800 workers who worked an average of 8 hours and produced 12,800 units. This year the same country had 1000 workers who worked an average of 8 hours and produced 14,000 units. This country's productivity was
A)higher this year than last year. A possible source of this change in productivity is a change in the size of the capital stock.
B)higher this year than last year. A change in the size of the capital stock does not affect productivity.
C)lower this year than last year. A possible source of this change in productivity is a change in the size of the capital stock.
D)lower this year than last year. A change in the size of the capital stock does not affect productivity.

Accepted Answer

The answer of Last year a country had 800 workers...

Question 19

Industrial machinery is an example of
A)a factor of production that in the past was an output from the production process.
B)technological knowledge.
C)a production function.
D)an item which always has the property called constant returns to scale.

Accepted Answer

Industrial machinery is an example of a factor of production that was once an output from the production process, as machinery itself is produced before it can be used in the production of other goods.

Question 20

Table 12-1.Athens and Troy both produce only ribs and baked potatoes. 
-Refer to Table 12-1. Which of the following is correct?
A)Both real GDP and real GDP per person are higher in Athens than Troy.
B)Real GDP is higher in Athens while real GDP per person is higher in Troy
C)Real GDP is higher in Troy while real GDP per person is higher in Athens.
D)Both real GDP and real GDP per person are higher in Troy than Athens.

Accepted Answer

Real GDP is higher in Athens, and real GDP per person is also higher in Athens.

Quiz 12: Production and Growth

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?

Which of the following is physical capital?

Dilbert's Incorporated produced 6,000,000 units of software in 2008. At the start of 2009 the pointy-haired boss raised employment from 10,000 total annual hours to 14,000 annual hours and production was 7,000,000 units. These number indicate that productivity

Table 12-1.Athens and Troy both produce only ribs and baked potatoes. -Refer to Table 12-1. Which of the following is correct?

The equipment and structures available to produce goods and services are called

Country A has a population of 1,000, of whom 700 worked an average of 8 hours a day and had a productivity of 2.5. Country B has a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. The country with the higher real GDP was

Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods.

Which of the following would be considered physical capital?

Which of the following would not be considered physical capital?

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 4,000 work 12 hours a day to produce a total of 120,000 final goods.

Industrial machinery is an example of

Each day Sonja works 8 hours and produces 8 units of goods and services. Emma works 10 hours each day and produces 9 units of goods and services. It follows that

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500.

Both Arnold and Will work 10 hours a day. Arnold can produce six baskets of goods per hour while Will can produce four baskets of the same goods per hour. It follows that Arnold's

Which of the following items plays a role in determining productivity?

Last year a country had 800 workers who worked an average of 8 hours and produced 12,800 units. This year the same country had 1000 workers who worked an average of 8 hours and produced 14,000 units. This country's productivity was

Industrial machinery is an example of

Table 12-1.Athens and Troy both produce only ribs and baked potatoes. -Refer to Table 12-1. Which of the following is correct?