1708 ? Chapter 25 /Production and Growth
52. Which of the following is considered human capital?
a. knowledge acquired from early childhood education programs b. knowledge acquired from grade school
c. knowledge acquired from on-the-job training d. All of the above are correct.
ANS: D DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Human capital MSC: Definitional
53. Which of the following is human capital?
a. a student loan
b. understanding how to use a company's accounting software c. training videos for new corporate employees d. All of the above are correct.
ANS: B DIF: 2 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Human capital MSC: Definitional
54. Which of the following is considered human capital?
a. the comfortable chair in your dorm room where you read economics texts b. the amount you get paid each week to work at the library c. the things you have learned this semester
d. any capital goods that require a human to be present to operate
ANS: C DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Human capital MSC: Definitional
55. Which of the following best illustrates the human capital of a survivor stranded on an island?
a. the fishing poles she has produced b. the invention of a better fishing lure
c. the fresh fruit and fish on and around the island d. her previous training in a survival course
ANS: D DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Human capital MSC: Interpretive
56. Which of the following is a part of your economics professor's human capital?
a. the things she learned at some prestigious university b. her copy of Mankiw's text c. her chalk holder
d. All of the above are correct.
ANS: A DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Human capital MSC: Definitional
57. Which of the following is human capital?
a. textbooks
b. hand held power tools
c. understanding how to repair cars d. All of the above are correct.
ANS: C DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Human capital MSC: Definitional
Chapter 25 /Production and Growth ? 1709
58. Which of the following would be human capital and physical capital, respectively?
a. for an accounting firm, the accountants’ knowledge of tax laws and computer software b. for a grocery store, grocery carts and shelving c. for a school, chalkboard and desks
d. for a library, the building and the reference librarians’ knowledge of the Internet
ANS: A DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Human capital | Physical capital MSC: Definitional
59. Which of the following would be human capital and physical capital, respectively?
a. for an accounting firm, the accountants’ knowledge of tax laws and the number of hours worked by
those accountants
b. for a grocery store, grocery carts and cash registers.
c. for a restaurant, the chefs’ knowledge about preparing food and equipment in the kitchen d. for a library, the building and the reference librarians’ knowledge of the Internet
ANS: C DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Human capital | Physical capital MSC: Definitional
60. Natural resources
a. are inputs provided by nature.
b. are inputs such as land, rivers, and mineral deposits. c. take two forms: renewable and nonrenewable. d. All of the above are correct.
ANS: D DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Natural resources MSC: Definitional
61. The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral
deposits are called a. physical capital. b. natural resources. c. human capital.
d. technological knowledge.
ANS: B DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Natural resources MSC: Definitional
62. Which of the following lists contains, in this order, natural resources, human capital, and physical capital?
a. For a restaurant: the land the restaurant was built on, the things the Chef learned at Cooking School,
the freezers where the chops and steaks are kept.
b. For a furniture company: wood, the company cafeteria, saws. c. For a railroad: fuel, railroad engines, railroad tracks. d. None of the above is correct.
ANS: A DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Natural resources | Physical capital | Human capital MSC: Definitional63. Which of the following is an example of a nonrenewable resource?
a. coal b. honey c. livestock
d. All of the above are correct.
ANS: A DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Natural resources MSC: Definitional
1710 ? Chapter 25 /Production and Growth
64. Which of the following is an example of a renewable natural resource?
a. the knowledge possessed by scientists b. carpenters’ labor services c. lumber
d. All of the above are correct.
ANS: C DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Natural resources MSC: Definitional
65. Which of the following is an example of a renewable natural resource?
a. fish b. soybeans c. wood
d. All of the above are correct.
ANS: D DIF: 1 REF: 25-2 NAT: Analytic LOC: The Study of economics, and definitions of economics TOP: Natural resources MSC: Definitional
66. In a market economy, scarcity of resources is most clearly reflected in
a. supply. b. demand.
c. market prices.
d. the stock of the resource.
ANS: C
NAT: Analytic TOP: Scarcity DIF: 2 REF: 25-2
LOC: Scarcity, tradeoffs, and opportunity cost MSC: Definitional
67. In a market economy, we know that a resource has become scarcer when
a. its price rises relative to other prices. b. it is non-renewable and some of it is used. c. people search for substitutes. d. All of the above are correct.
ANS: A
NAT: Analytic TOP: Scarcity DIF: 2 REF: 25-2
LOC: Scarcity, tradeoffs, and opportunity cost MSC: Interpretive
68. In a market economy, we know that a resource has become scarcer when
a. both the demand for the good and the supply of the good have increased. b. both the demand for the good and the supply of the good have decreased. c. the demand for the good has increased and the supply has decreased.
d. the demand for the good has decreased and the supply has remained constant.
ANS: C
NAT: Analytic TOP: Scarcity DIF: 2 REF: 25-2
LOC: Scarcity, tradeoffs, and opportunity cost MSC: Interpretive
69. If the price of a good has risen over time,
a. it must have become more scarce. b. it must have become less scarce.
c. it has become more scarce only if the price adjusted for inflation has risen. d. it has become less scarce only if the price adjusted for inflation has risen.
ANS: C
NAT: Analytic TOP: Scarcity DIF: 2 REF: 25-2
LOC: Scarcity, tradeoffs, and opportunity cost MSC: Interpretive
Chapter 25 /Production and Growth ? 1711
70. In a market economy, the real, or inflation-adjusted, price of a resource measures its
a. contribution to revenue. b. relative scarcity. c. productivity.
d. contribution to efficiency.
ANS: B DIF: 1 REF: 25-2 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Natural resources MSC: Definitional
71. Greater scarcity of a natural resource is indicated
a. by an increase in the price of the resource, whether the price increase is less than or greater than the
rate of inflation.
b. only by an increase in the price of the resource that is less than the rate of inflation. c. only by an increase in the price of the resource that is greater than the rate of inflation.
d. only by an increase in the price of the resource that is caused by a decrease in supply and is greater
than the rate of inflation.
ANS: C DIF: 2 REF: 25-2 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Natural resources MSC: Interpretive
72. Historically, the market prices of most natural resources (adjusted for inflation) have
a. increased.
b. remained stable.
c. remained stable or decreased. d. decreased.
ANS: C DIF: 2 REF: 25-2 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Natural resources MSC: Definitional
73. The behavior of market prices over time indicates that natural resources
a. are a limit to economic growth. b. are unrelated to economic growth. c. are not a limit to economic growth.
d. are the major determinant of productivity.
ANS: C DIF: 1 REF: 25-2 NAT: Analytic LOC: Productivity and growth TOP: Natural resources | Economic growth
MSC: Interpretive
74. Which of the following statements is true?
a. Natural resources per worker influence productivity only when those natural resources are
renewable.
b. The prices of most natural resources are stable or falling relative to other prices. c. Technology requires greater use of natural resources.
d. The terms human capital and technological knowledge are used interchangeably.
ANS: B DIF: 2 REF: 25-2 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Natural resources MSC: Interpretive
75. Which of the following statements is true?
a. The quantity of natural resources per worker can influence productivity. b. Technological knowledge and human capital are closely related.
c. Over long periods of time, the prices of most natural resources are stable or falling, relative to other
prices.
d. All of the above are correct.
ANS: D DIF: 2 REF: 25-2 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Natural resources | Productivity MSC: Interpretive
1712 ? Chapter 25 /Production and Growth
76. If natural resources had become scarcer, then we would expect their
a. prices to have risen more than inflation as they have.
b. prices to have risen more than inflation, but they have not. c. known quantities to have fallen as they have. d. known quantities to have fallen but they have not.
ANS: B DIF: 2 REF: 25-2 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Natural resources MSC: Interpretive
77. If an inexpensive alternative to oil were found, the price of oil adjusted for inflation
a. would decline as the alternative would reduce the demand for oil. b. would decline as the alternative would reduce the supply of oil. c. would increase as the alternative would increase the demand for oil. d. would increase as the alternative would increase the supply of oil.
ANS: A DIF: 3 REF: 25-2 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Natural resources MSC: Applicative
78. A leading environmental group recently published a report contending that humans are running a \
deficit\means that economic growth will eventually stop, and will even be reversed. An economist would a. agree with the report, and would point to rising natural resource prices as evidence.
b. agree with the report, but wouldn't think it was important because growth will not slow down for
several centuries.
c. disagree with the report, in part because it ignores the mitigating effects of technological change. d. disagree with the report because labor and capital are the primary determinants of growth, and since
they are plentiful, growth will not slow down.
ANS: C DIF: 2 REF: 25-2 NAT: Analytic LOC: Scarcity, tradeoffs, and opportunity cost TOP: Natural resources MSC: Interpretive
79. If a good has become more scarce, then we know for sure that
a. the demand for it increased. b. the supply of it decreased.
c. either the demand for it increased or the supply of it decreased. d. both the supply of it and the demand for it decreased.
ANS: C
NAT: Analytic TOP: Scarcity DIF: 3 REF: 25-2
LOC: Scarcity, tradeoffs, and opportunity cost MSC: Interpretive
80. 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.
ANS: D DIF: 2 REF: 25-2 NAT: Analytic LOC: Productivity and growth TOP: Natural resources | Economic growth
MSC: Interpretive