Economic growth can be defined as
A) the rate of growth in the productivity of labor.
B) the rate of growth in the productivity of capital.
C) the rate of growth of labor plus the rate of depreciation of capital.
D) the rate of growth of labor plus the rate of growth of capital plus the rate of growth in the productivity of labor and capital.
Ques. 2Technology is
A) society's pool of knowledge of how to produce goods and services.
B) a resource like land or physical capital.
C) computers and lasers.
D) not obtainable by engaging in activities that increase human capital.
Ques. 3Which of the following describes that people cannot examine every possible choice available to them but instead use simple rules of thumb to sort among the alternatives that happen to occur to them?
A) self-interest
B) bounded rationality
C) ceteris paribus
D) normative economics
Ques. 4If the price of one good goes up and the demand of a related good goes down, the two goods are
A) complements.
B) substitutes.
C) inferior goods.
D) normal goods.
Ques. 5U.S. government regulation of social and economic activity
A) only began after World War II.
B) costs less now than it did in the 1980s.
C) has increased steadily since 1970.
D) is confined to antitrust law.
Ques. 6A unit tax of 1 has been levied on a good. The equilibrium price of the good will most likely
A) increase by 1.
B) remain unchanged.
C) decrease by 1.
D) increase by an amount less than 1.
Ques. 7One characteristic of a public good is that it
A) is available for consumption by only a few individuals at any particular time.
B) always eliminates the free-rider problem.
C) can be consumed simultaneously by many individuals.
D) can be easily subdivided into small units.
Ques. 8Which of the following is a behavioral implication of bounded rationality?
A) unbounded selfishness
B) a rule of thumb
C) a rational mistake
D) a nervous breakdown
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