Production and Growth-Part One

Human capital refers to human­-made capital such as tools and machinery, as opposed to natural capital such as rivers and mineral deposits

• True

• False

If a production function exhibits constant returns to scale, then doubling all of the inputs doubles output.

• True

• False

For a given level of technology, we should expect an increase in productivity within a nation when there is an increase in each of the following except

• Labor

• physical capital/worker

• human capital/worker

• natural resources/worker

Which of the following describes an increase in technological knowledge?

• A farmer sends his child to agricultural college and the child returns to work on the farm

• A farmer hires another day laborer

• A farmer buys another tractor

• A farmer discovers that it is better to plant in the spring rather than in the fall

If we have the following information about three different countries (A, B, C):

Country (A): Real GDP (20000 units)-Total workers (400 workers)

Country (B): Real GDP (40000 units)-Total workers (400 workers)

Country (C): Real GDP (16000 units)-Total workers (400 workers)

Which country has a higher productivity?

• A

• B

• C

• D

International data on real GDP per person give us a sense of how standards of living vary across countries.

• True

• False

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

• productivity

• population

• preferences

• prices

Productivity is defined as

• the amount of difficulty that is involved in producing a given quantity of goods and services.

• the quantity of labor that is required to produce one unit of goods and services.

• the quantity of goods and services produced from each unit of labor input.

• the quantity of goods and services produced over a given amount of time.