1) All of the following are considered factors of production except:

a) a vacant piece of land that has never been used.

b) an antique sewing machine that Jill still uses to alter clothes.

c) Randy, who has worked as a mechanic for twenty years.

d) All of the above are factors of production.

2) Which of the following policies would likely not help promote economic growth?

a) Awarding scholarships to bright high school students.

b) Offering after-work computer enhancement classes.

c) Replacing old snow plows with new state-of-the-art snow plows.

d) Reducing the number of student visas issued to international students.

3) If Galaxia has a GDP that is 10 times larger than Myopia, which country would likely have greater marginal returns to capital based on the law of diminishing returns to capital?

a) Galaxia

b) Myopia

c) Both countries would have equal marginal returns to capital.

d) Both countries would have marginal returns to capital equal to 0 due to diminishing returns.

4) Which of the following government actions would represent the largest increase in physical capital?

a) A government providing tax credits to offset college tuition.

b) A government raising taxes on corporate earnings.

c) A government expanding its research and development in biotechnology.

d) A government investing in hospitals and other health care facilities to modernize their operations.