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Berkeley City College ECON 1A 1)Diminishing marginal productivity implies that a proportional increase in all inputs will produce a less than proportional increase in output

Economics

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Berkeley City College

ECON 1A

1)Diminishing marginal productivity implies that a proportional increase in all inputs will produce a less than proportional increase in output.

True False

 

2. Say's Law allows growth theorists to:
   1. ignore aggregate demand and focus only on aggregate supply.
   2. ignore aggregate supply and focus only on aggregate demand.
   3. assume that aggregate supply is determined by aggregate demand.
   4. assume that aggregate demand is always less than aggregate supply.

 

3. Per capita real output would be certain to increase if:
   1. both real GDP and population increase.
   2. both real GDP and population decrease.
   3. real GDP increases and population decreases.
   4. real GDP decreases and population increases.

 

4. In 2003 and 2004, the United States went through what many economists described as a jobless recovery, which is a situation in which real output grows but the unemployment rate does not fall. Normally an increase in real output affects:
   1. both structural and cyclical unemployment equally.
   2. structural unemployment.
   3. cyclical unemployment more than structural unemployment.
   4. structural unemployment more than cyclical unemployment.

 

5. Technological change can result in:
   1. structural unemployment.
   2. frictional unemployment.
   3. cyclical unemployment.
   4. seasonal unemployment.

 

6. Which of the following will increase potential output?
   1. an increase in the target rate of unemployment.
   2. a decrease in the target rate of unemployment.
   3. an increase in capacity utilization.
   4. a decrease in the target rate of capacity utilization.

 

7. John has received a 3% pay increase but the rate of inflation is 6%. Economists would tell John that his real wage has:
   1. risen by 3%.
   2. fallen by 3%.
   3. risen by 2%.
   4. fallen by 2%.

 

 

8. Suppose two economies are identical in every way except that one has twice as much physical capital as the other. They have the same customs, laws, population, and educational levels. Economists would expect that additional machinery would have:
   1. the same marginal product in both.
   2. a higher marginal product in the country that begins with more capital.
   3. a higher marginal product in the country that begins with less capital.
   4. a higher marginal product in the country that begins with more capital if they are using a production function approach, but if they are using the convergence approach, the higher marginal product will be in the country that begins with less capital.

 

9. In the early 20th century the U.S. South was poor relative to the North. During the century the gap in per-capita income narrowed. The process of convergence explained in the text would explain this narrowing of the gap as due to:
   1. movement of capital to the north and labor to the south.
   2. movement of capital to the south and labor to the north.
   3. extension of minimum wages laws nationwide.
   4. use of taxes to transfer wealth from the north to the south.