Eco 5

QN=101 (17812) When the overall level of prices in the economy is increasing, economists say that the economy is experiencing

• a. economic growth

• b. stagflation.

• c. inflation

• d. deflation.

QN=102 (17797) Arlo is offered a job in Des Moines, where the CPI is 60, and a job in New York, where the CPI is 125. Arlo's job offer in Des Moines is for $48,000. How much does the New York job have to pay in order for the two salaries to represent the same purchasing power?

• a. $23,040

• b. $52,000

• c. $79,200

• d. $100,000

QN=103 (17818) Scenario 24-2The price tag on a golf ball in 1975 read $0.20, and the price tag on a golf ball in 2005 read $2.00. The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3.Refer to Scenario 24-2. The price of a 1975 golf ball in 2005 dollars is

• a. $0.05

• b. $0.53

• c. $0.73.

• d. $2.00.

QN=104 (17840) Which of the following is correct?

• a. Although levels of real GDP per person vary substantially from country to country, the growth rate of real GDP per person is similar across countries.

• b. Productivity is not closely linked to government policies.

• .c. The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress.

• d. Productivity may be measured by the growth rate of real GDP per person.

QN=105 (17831) On a production function, as capital per worker increases, output per worker

• a. increases. This increase is larger at larger values of capital per worker.

• b. increases. This increase is smaller at larger values of capital per worker.

• c. decreases. This decrease is larger at larger value of capital per worker.

• d. decreases. This decrease is smaller at larger value of capital per worker.

QN=106 (17836) 3. Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of

• a. increasing returns to capital.

• b. increasing returns to labor.

• c. diminishing returns to capital.

• d. diminishing returns to labor.

QN=107 (17839) The level of real GDP person

• a. differs widely across countries, but the growth rate of real GDP per person is similar across countries

• b. is very similar across countries, but the growth rate of real GDP per person differs widely across countries.

• c. and the growth rate of real GDP per person are similar across countries

• d. and the growth rate of real GDP per person vary widely across countries.

QN=108 (17833) 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

• a. stay the same

• b. increase by exactly 50 percent.

• c. increase by exactly 100 percent.

• d. increase, but not necessarily by either 50 percent or 100 percent.

QN=109 (17828) 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,

• a. (i) its output would stay the same and so would its labor productivity.

• b. (ii) its output and labor productivity would increase, but less than double.

• c. (iii) its output and labor productivity would increase by more than double.

• d. None of (i), (ii), and (iii) is correct.

QN=110 (17838) Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth?

• a. A country with no or few domestic natural resources is destined to be poor.

• b. Differences in natural resources have virtually no role in explaining differences in standards of living

• c. Some countries can be rich mostly because of their natural resources and countries without natural resources need not be poor, but can never have very high standards of living

• d. Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living.