Problem 1
(a) What is the distinction between total output and per capita output? Which grows more rapidly? Why? Does it always grow? (b) What are the two channels by which potential output can be increased using supply-side policies?
Problem 2
Name two economic bads. Suggest feasible ways in which they might be measured. Should they be included in GNP? Could they be?
Problem 3
Choose the correct answer: Countries that isolate themselves from the world economy tend to grow slowly because (a) they fail to learn about technical progress elsewhere, (b) without competition, they have insufficient incentive to invest, (c) there are other adverse consequences of the political regime that took such a decision, (d) all of the above, (e) none of the above.
Problem 5
Choose the correct answer: The empirical correlation between countries that possess extreme mineral wealth and the prevalence of civil wars suggests that: (a) wars raise the demand for resources and encourage exploration for minerals, (b) when easy wealth is available, it increases the incentive to fight over the spoils provided by nature rather than co-operate to produce goods and services, (c) mineral wealth attracts foreign predators.
Problem 6
'Because we know Malthus got it wrong, we are relaxed about the fact that some minerals are in finite supply.- Is there a connection? Explain.
Problem 10
Can technical progress be negative?
Problem 12
'Britain produces too many scientists, too few engineers.- What kind of evidence might help you decide if this is true? Will a free market lead people to choose the career that most benefits society?
Problem 14
Is it in a country's best interests to focus on economic growth? Or, in other words, is growth good?
