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1. Problems and Applications Q1 Most countries, including the United States, import substantial amounts of goods and services from other countries. True or False: Countries with the least amount of international trade tend to have the highest standard of living. O True 0 False 2. Problems and Applications Q2 Suppose that society decided to reduce consumption and increase investment. More investment leads to V economic growth in the long run. Which of the following statements are true about groups in society that would benefit from or be hurt by this change? Check ail that apply. C] All groups can increase their spending. [3 There might be a transition period in which workers and owners in investment-goods industries would receive lower incomes. C] There might be a transition period in which workers and owners in consumptiongoods industries would receive lower incomes. 2. Problems and Applications Q2 Suppose that society decided to reduce consumption and increase investment. More investment leads to V economic growth in the long run. which of the following sta re true about groups in society that would benefit from or be hurt by this change? Check all that apply. C] All groups can i eir spending. C] There might be a transition period in which workers and owners in investment-goods industries would receive lower incomes. C] There might be a transition period in which workers and owners in consumptiongoods industries would receive lower incomes. 3. Problems and Applications Q3 Societies choose what share of their resources to devote to consumption and what share to devote to investment. Some of these decisions involve private spending; others involve government spending. For each form of private spending, indicate whether it represents consumption or investment. Private Spending Consumption Investment People buying clothes O O Firms buying automobiles for delivery services O 0 Firms buying machines O O O 0 People buying automobiles For each form of government spending, indicate whether it represents consumption or investment. Government Spending Consumption Investment Paying salary to public elementary school teachers O O Building tunnels Building public housing 000 000 Buying medical equipment 4. Problems and Applications Q4 What is the opportunity cost of investing in capital? O Improved technology that leads to faster growth 0 The loss of consumption that results from redirecting resources toward investment 0 Higher taxes True or False: If the extra output produced from an additional unit of capital falls as the stock of capital rises, the country may be overinvesting in capital. O True O False What is the opportunity cost of investing in human capital? 0 The goods or resources that could be produced if the resources to produce them were not invested in human capital 0 Improved technology that leads to faster growth C) Lower taxes True or False: A country may be overinvesting in human capital if the best job a Ph.D. in philosophy can find is managing a restaurant. 0 True 0 False 5. Problems and Applications Q5 In the 19905 and the first two decades of the 20005, investors from the Asian economies of Japan and China made significant direct and portfolio investments in the United States. At the time, many Americans were unhappy that this investment was occurring. True or False: It was better for the United States not to receive this foreign investment because it shrank the capital stock. O True O False True or False: It would have been better for Americans to have made this investment because then they would have received the returns on the investment themselves. 0 True 0 False 6. Problems and Applications Q6 In many developing nations, young women have lower enrollment rates in secondary school than do young men. Which of the following observations are consistent with greater educational opportunities for young women leading to faster economic growth in these countries? Check all that apply. [3 Increased human capital reduces productivity. C] There are external benefits associated with greater knowledge in a country. C] The opportunity cost of having a child is lower. 7. Problems and Applications Q7 The International Property Rights Index (IPRI) scores countries based on the legal and political environment and how well property rights are protected. The following table lists the IPRI scores and GDP per person in 2018 for six countries. GDP per Person IPRI Score (Current US Dollars) Norway 8.5 82,3724 Singapore 8.4 61,230.2 United Kingdom 8.1 42,260.9 Brazil 5.7 9,126.9 Algeria 4.1 4,449.8 Bangladesh 3.4 1,736.3 Countries with poor property rights enforcement generally have V income per person than those with better property rights protection. What can the government of a relatively poor country do to promote economic prosperity? Check all that apply. C] Minimize corruption among government officials. D Give inventors and authors exclusive, temporary rights to market and sell their creations. [3 Establish and enforce strong property rights. [3 Promote free trade by reducing or removing tariffs on imports from foreign countries. 7. Problems and Applications Q7 The International Property Rights Index (IPRI) scores countries based on the legal and political environment and how well property rights are protected. The following table lists the IPRI scores and GDP per person in 2018 for six countries. GDP per Person IPRI Score (Current US Dollars) Norway 8.5 82,3724 Singapore 8.4 61,230.2 United Kingdom 8.1 42,2603 Brazil 5.7 9,126.9 Algeria 4.1 4,449.8 Bangladesh 3.4 1,736.3 Countries with poor property rights enforcement generally have V income per person than those with better property rights protection. What can the government of a relatively poor country do to pro omic prosperity? Check all that apply. C] Minimize corruption among government officials. D Give inventors and authors exclusive, temporary rights to market and sell their creations. [3 Establish and enforce strong property rights. [3 Promote free trade by reducing or removing tariffs on imports from foreign countries. 8. Problems and Applications Q8 International data show a positive correlation between income per person and the health of the population. True or False: Individuals with lower incomes are in better health than those with higher incomes thanks to cheaper medical alternatives such as home remedies, and healthier individuals are likely to be more productive than sick ones. O True 0 False 9. Problems and Applications Q9 Adam Smith wrote, \"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.\" True or False: Low taxation would lead to slower economic growth because it encourages citizens and businesses to consume more and invest less. O True 0 False