1. 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.
2. The one variable that stands out as the most significant explanation of large variations in living standards around the
world is
a.
productivity.
b.
population.
c.
preferences.
d.
prices.
3. Productivity is defined as the quantity of
a.
b.
c.
d.
4. Which of the following is a correct way to measure productivity?
a.
Divide the number of hours worked by the quantity of output.
b.
Divide the quantity of output by the number of hours worked.
c.
Determine how much output is produced in a given time.
d.
Determine how much time it takes to produce a unit of output.
5. Which of the following statements is true?
a.
Productivity is calculated as hours worked divided by output produced.
b.
Americans have a higher standard of living than Indonesians because American workers are more productive
than Indonesian workers.
c.
Both A and B are correct.
d.
None of the above are correct.
6. Which of the following is not correct?
a.
Countries that have had higher output growth per person have typically done so without higher productivity
growth.
b.
A country’s standard of living and its productivity are closely related.
c.
Productivity refers to output produced per hour of work.
d.
Increases in productivity can be used to increase output or leisure.
7. In determining living standards, productivity plays a key role
a.
for individuals, but not for nations.
b.
for nations, but not for individuals.
c.
for both nations and individuals.
d.
for neither nations nor individuals.
8. The key determinant of the standard of living in a country is
a.
the amount of goods and services produced from each hour of a worker’s time.
b.
the total amount of goods and services produced within the country.
c.
the total amount of its physical capital.
d.
its growth rate of real GDP.
9. For a given year, productivity in a particular country is most closely matched with that country’s
a.
level of real GDP over that year.
b.
level of real GDP divided by hours worked over that year.
c.
growth rate of real GDP divided by hours worked over that year.
d.
growth rate of real GDP per person over that year.
10. Which of the following would, by itself, reveal the most about a country’s standard of living?
a.
its level of capital
b.
the number of hours worked
c.
its availability of natural resources
d.
its productivity
11. Productivity
a.
is nearly the same across countries, and so provides no help explaining differences in the standard of living
across countries.
b.
explains very little of the differences in the standard of living across countries.
c.
explains some, but not most of the differences in the standard of living across countries.
d.
explains most of the differences in the standard of living across countries.
12. Productivity is the
a.
key determinant of living standards, and growth in productivity is the key determinant of growth in living
standards.
b.
key determinant of living standards, but growth in productivity is not the key determinant of growth in living
standards.
c.
not the key determinant of living standards, but growth in productivity is the key determinant of growth in
living standards.
d.
not the key determinant of living standards, and growth in productivity is not the key determinant of growth in
living standards.
13. Over the last ten years productivity grew faster in Mapoli than in Romeria while the population and total hours worked
remained the same in both countries. It follows that
a.
real GDP per person grew faster in Mapoli than in Romeria.
b.
real GDP per person must be higher in Mapoli than in Romeria.
c.
the standard of living must be higher in Mapoli than in Romeria.
d.
All of the above are correct.
14. Over the last ten years productivity grew more slowly in Iberia than in Aire while the population and total hours
worked remained the same in both countries. It follows that
a.
real GDP per person must be lower in Iberia than in Aire.
b.
real GDP per person grew more slowly in Iberia than in Aire.
c.
the standard of living must be higher in Iberia than in Aire.
d.
All of the above are correct.
15. Which of the following can explain faster growth of real GDP in country A than in Country B?
a.
both greater population growth and greater productivity growth in Country A
b.
greater population growth in Country A, but not greater productivity growth in Country A
c.
greater productivity growth in Country A, but not greater population growth in Country A
d.
neither greater population growth nor greater productivity growth in Country A
16. Suppose that real GDP grew more in Country A than in Country B last year.
a.
Country A must have a higher standard of living than country B.
b.
Country A’s productivity must have grown faster than country B’s.
c.
Both of the above are correct.
d.
None of the above are correct.
17. Given that a country’s real output has increased, in which of the following cases can we be sure that its productivity
also has increased?
a.
The total number of hours worked rose.
b.
The total number of hours worked stayed the same.
c.
The total number of hours worked fell.
d.
Both b and c are correct.
18. Phoenix furniture uses 12 workers, each working eight hours, to produce 192 rocking chairs. What is Phoenix’s
productivity?
a.
192 rocking chairs
b.
24 rocking chairs per hour
c.
2 rocking chairs per hour
d.
2 hours per rocking chair
19. Hit-It produces 320 baseball bats per day using 2 workers who each work 8 hours per day. What is Hit-It’s
productivity?
a.
320 baseball bats
b.
160 baseball bats per hour
c.
20 baseball bats per hour
d.
None of the above is correct.
20. In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was Alpha Cabinet Company’s
productivity?
a.
1/8 cabinet per hour
b.
8 hours per cabinet
c.
40 cabinets
d.
None of the above is correct.
21. In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its
productivity?
a.
4000 pounds of laundry
b.
500 pounds of laundry per hour
c.
100 pounds of laundry per hour
d.
None of the above is correct.
22. Allied Business Consultants employs five researchers that each work 8 hour days. In one day the researchers prepared
10 reports for its 2 largest clients. What was Allied Business Consultants’ productivity?
a.
10 reports
b.
5 reports per client
c.
1.25 reports per hour
d.
1/4 report per hour
23. You and your friend work together for 4 hours to produce a total of 8 bookcases. What is productivity?
a.
16 bookcases
b.
8 bookcases
c.
2 bookcases per hour
d.
1 bookcase per hour
24. In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity?
a.
1/3 laptop per hour
b.
3 hours per laptop
c.
1200 laptops
d.
400 laptops
25. Mary looks over reports on four of her workers. Jack made 30 baskets in 5 hours. Rudy made 32 baskets in 8 hours.
Sam made 40 baskets in 12 hours. Walter made 22 baskets in four hours. Who has the greatest productivity?
a.
Jack
b.
Rudy
c.
Sam
d.
Walter
26. A barber shop produces 192 haircuts a day. Each barber in the shop works 8 hours per day and produces the same
number of haircuts per hour. If the shop’s productivity is 2 haircuts per hour of labor, then how many barbers does the
shop employ?
a.
8
b.
12
c.
16
d.
None of the above is correct.
27. Miller’s Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the
same number of gallons of milk per hour. If the Dairy’s productivity is 12 gallons of milk per hour of labor, then how
many milkers does the shop employ?
a.
8
b.
10
c.
80
d.
120
28. Gramp’s Potato Chips produces 2560 bags of potato chips a day. Each employee at Gramp’s works 8 hours. If the
company’s productivity is 20 bags per hour, how many people does Gramp’s employ?
a.
8
b.
16
c.
24
d.
None of the above is correct.
29. Greg’s Ice Cream produces 1120 gallons of ice cream per day. Each employed works seven hours and has productivity
of 20 gallons an hour. How many employees does Greg’s employ?
a.
160
b.
56
c.
8
d.
None of the above is correct.
30. Adam and Doug both build birdhouses. Adam works 30 hours a week and produces 15 bird houses. Doug works 20
hours a week and produces 12 bird houses. Which of the following is correct?
a.
Adam’s production and productivity are higher than Doug’s.
b.
Adam’s production is higher than Doug’s, but Doug’s productivity is higher than Adam’s.
c.
Doug’s production is higher than Adam’s, but Adam’s productivity is higher than Doug’s.
d.
Doug’s production and productivity are higher than Adam’s.
31. Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of
the following is correct?
a.
Alexis’s productivity is greater than Tara’s. This difference could be explained by Alexis having more
physical capital than Tara.
b.
Alexis’s productivity is greater than Tara’s. This difference cannot be explained by a difference in the physical
capital each has.
c.
Tara’s productivity is greater than Alexis’s. This difference could be explained by Tara having more physical
capital than Alexis.
d.
Tara’s productivity is greater than Alexis’s. This difference cannot be explained by a difference in the physical
capital each has.
32. Waldo works eight hours and produces 7 units of goods per hour. Emerson works six hours and produces 10 units of
goods per hour.
a.
Waldo’s productivity and output are greater than Emerson’s.
b.
Waldo’s productivity is greater than Emerson’s but his output is less.
c.
Emerson’s productivity and output are greater than Waldo’s.
d.
Emerson’s productivity is greater than Waldo’s but his output is less.
33. Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades
for 1.5 cans of spinach, then
a.
Popeye’s production and productivity are greater than Wimpy’s.
b.
Popeye’s production is greater than Wimpy’s, but his productivity is less.
c.
Wimpy’s production and productivity are greater than Popeye’s.
d.
Wimpy’s production is greater than Popeye’s, but his productivity is less.
34. Nathan owns a bakery that bakes only cakes. All of his bakers work 8 hours per day. In 2011, he employed 5 bakers
who produced a total of 200 cakes each day. In 2012, he employed 6 bakers who produced a total of 249 cakes each day.
The bakery’s productivity
a.
decreased by 2.33%.
b.
increased by 2.33%.
c.
increased by 3.75%.
d.
increased by 24.50%.
35. Daniel owns a coffee kiosk. All of his employees work 8 hours per day. In 2011, he employed 6 people who produced
a total of 912 cups of coffee each day. In 2012, he hired a seventh employee and production increased to 1008 cups of
coffee each day. In Daniel’s kiosk, productivity
a.
increased by about 10.5 percent
b.
increased by 9.5 percent
c.
decreased by about 5.6 percent
d.
decreased by about 5.3 percent
36. In 2011 Buckeye Brewing produced 1,000 bottles of ginger ale each day. It employed 10 workers each working 8
hours a day. In 2012 it produced 960 bottles of ginger ale each day employing 8 workers who worked 8 hours each day.
Productivity at Buckeye Brewing
a.
increased by 20%.
b.
increased by 16.67%.
c.
decreased by 1.67%.
d.
decreased by 40%.
37. In 2011, Modern Electronics, Inc. produced 60,000 calculators, employing 80 workers, each of whom worked 8 hours
per day. In 2012, the same firm produced 76,500 calculators, employing 85 workers, each of whom worked 10 hours per
day. Productivity at Modern Electronics
a.
decreased by 4%
b.
remained constant.
c.
increased by 8.33%
d.
increased by 27.50%
38. Real Foods produced 400,000 cans of diced tomatoes last year and 460,000 cans of diced tomatoes this year. It
employed the same number of labor hours each year. Real Foods’ productivity
a.
decreased 13%.
b.
was unchanged.
c.
increased 13%.
d.
increased 15%.
39. In 2010, Acme Foods produced 300,000 bags of pretzels, employing 12,000 hours of labor. In 2011, it produced
322,000 bags of pretzels, employing 14,000 hours of labor. Acme Foods productivity
a.
decreased by 8%.
b.
was unchanged.
c.
increased by 6.8%.
d.
increased by 7.3%.
40. Dilbert’s Incorporated produced 5,000,000 units of accounting software in 2010. At the start of 2011 the pointy-haired
boss reduced total annual hours of employment from 10,000 to 8,000 and production was 4,800,000. These numbers
indicate that productivity
a.
fell by 4%.
b.
fell by 20%.
c.
rose by 12%.
d.
rose by 20%.
41. Dilbert’s Incorporated produced 6,000,000 units of software in 2010. At the start of 2011 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%.
42. Last year the imaginary country of Basova 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 Andovia had a population of 12,000, 8,000 people
worked 8 hours a day, and produced a real GDP of $38,000,000. Which of the following is correct?
a.
Basova had higher productivity and higher real GDP per person.
b.
Andovia had the higher productivity and higher real GDP per person.
c.
Basova had the higher productivity while Andovia had the higher real GDP per person.
d.
Andovia had the higher productivity while Basova had the higher real GDP per person.
43. 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.
44. 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 3,000 work 7 hours a day to produce a total of 105,000 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.
45. 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.
46. Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and had a productivity of 2.5.
Country B had a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. Country
a.
A had the higher level of real GDP and real GDP per person.
b.
A had the higher level of real GDP and Country B had the higher level of real GDP per person
c.
B had the higher level of real GDP and Country A had the higher level of real GDP per person
d.
B had the higher level of real GDP and real GDP per person.
47. Country A had a population of 2,000, of whom 1,300 worked an average of 8 hours a day and had a productivity of 5.
Country B had a population of 2,500, of whom 1,700 worked 8 hours a day and had productivity of 4. Country
a.
A had the higher level of real GDP and real GDP per person.
b.
A had the higher level of real GDP and Country B had the higher level of real GDP per person
c.
B had the higher level of real GDP and Country A had the higher level of real GDP per person
d.
B had the higher level of real GDP and real GDP per person.
Table 25–1.
Athens and Troy both produce only ribs and baked potatoes.
Athens
Troy
Quantities
Ribs
200,000
300,000
Baked Potatoes
400,000
250,000
Base year prices
Ribs
$10
$10
Baked Potatoes
$4
$4
Population and Employment
Population
6,000
8,000
Total hours of employment
40,000
60,000
48. Refer to Table 25-1. 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.
49. Refer to Table 25-1. 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.
50. 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.
51. 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.
52. Each day Sue works 8 hours and produces 7 units of goods and services. Mary works 10 hours each day and produces
10 units of goods and services. It follows that
a.
Sue’s productivity is higher than Mary’s.
b.
Mary’s productivity is higher than Sue’s.
c.
Sue’s income per hour will be higher than Mary’s.
d.
Sue’s income per day will be higher than Mary’s.
53. 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.
54. 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.
55. 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.
56. 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
57. The equipment and structures available to produce goods and services are called
a.
physical capital.
b.
human capital.
c.
the production function.
d.
technology.
58. 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.
59. Which of the following is not an example of physical capital?
a.
a new factory building
b.
a delivery van
c.
the knowledge of workers
d.
the office chair in a lawyer’s office