Capital Formation, Investment Choice, Information Technology, And Technical Progress MCQs

Option A: Solow residual

Option B: productivity paradox

Option C: technological followership

Option D: Stieglitz discrepancies

Correct Answer: productivity paradox ✔

Option A: price distortions

Option B: consumer surplus

Option C: shadow prices

Option D: exchange rates

Correct Answer: shadow prices ✔

Option A: scholarship for technical education

Option B: R&D in robotics

Option C: a new drug to cure AIDS

Option D: environmental pollution

Correct Answer: environmental pollution ✔

Option A: economies of scale

Option B: external economies

Option C: negative externality

Option D: net present value

Correct Answer: external economies ✔

Option A: Labor is often underemployed, having a low alternative cost

Option B: It is cheaper to hire labor in LDC because its productivity is relatively higher than in DCs

Option C: Adapting existing Western technology to LDC conditions requires little creativity

Option D: Labor is usually considered the scarce factor

Correct Answer: Labor is often underemployed, having a low alternative cost ✔

Option A: In 1990 the world had 98 mainline phones and 2 mobile phones per 1,000 people: in 2001 169 mainline and 153 mobiles per 1000

Option B: Mobile phones do not require the massive infrastructure investment that mainline telephone require

Option C: In 2001 the World information technology expenditures were about 1/20 of 1% of world gross investment

Option D: In 2001 internet users per 1000 people in middle income countries were greater than high income countries

Correct Answer: In 2001 internet users per 1000 people in middle income countries were greater than high income countries ✔

Option A: inadequate government bureaucracy

Option B: small size of infrastructure

Option C: too few innovative entrepreneurs

Option D: unsuitable technology

Correct Answer: All of the above are correct ✔

Option A: Dale Jorgenson

Option B: Joseph Stieglitz

Option C: Robert Solow

Option D: Theodore W. Schultz

Correct Answer: Robert Solow ✔

Option A: productivity paradox

Option B: absorptive capacity

Option C: the residual

Option D: uncertainly

Correct Answer: absorptive capacity ✔

Option A: a natural monopoly

Option B: an LDC’s limit of one firm to an industry

Option C: an individual firm facing a horizontal (perfectly elastic) demand curve in LDCs

Option D: The existence of oligopoly

Correct Answer: a natural monopoly ✔

Option A: mobile phone

Option B: electricity

Option C: water supply

Option D: postal service

Correct Answer: mobile phone ✔

Option A: 800

Option B: 40,000

Option C: more than zero but less than 800

Option D: less than zero

Correct Answer: 800 ✔

Option A: wage costs per unit of output

Option B: wage rate that prevails in LDCs

Option C: Wage rate divided by the productivity of labor

Option D: marginal product of labor divided by wage

Correct Answer: Wage rate divided by the productivity of labor ✔

Option A: maximum capital absorption

Option B: factor price distortions

Option C: engineering mentality

Option D: intermediate technology

Correct Answer: engineering mentality ✔

Option A: G-7 countries

Option B: countries with highest productivity growth in the world since 1960

Option C: countries with decreasing TFP growth since 1990s

Option D: countries with the lowest information technology equipment and software index prices

Correct Answer: G-7 countries ✔