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Question 1

Productivity is measured by:

a) The growth in output of a firm

b) The growth in profits of a firm

c) Total output/total input

d) Total amount of investment in capital goods

Question 2

A production possibility frontier shows:

a) The total amount of a good that can be produced with a combination of labour and capital

b) That limitless amounts of good can be produced in the long run

c) That economies will always produce at points along it

d) The opportunity cost of one good in terms of the lost production of another good

Question 3

As we move along a production possibility frontier…

a) Unemployment might rise

b) Unemployment might fall

c) Resources will be used more efficiently

d) Any of the combinations of goods is possible

Question 4

The law of diminishing marginal returns illustrates:

a) That technology costs will always rise as output increases

b) That with a given state of technology when some resources are increased in a situation where there are wider capacity constraints that costs of output rise

c) That with a given state of technology when some resources are increased in a situation where there are wider capacity constraints that costs of output fall

d) That it is inevitable that past a certain point there is no gain in improving technology

Question 5

What is human capital?

a) The development of robots in industry

b) The rise of Information technology

c) The skills and abilities of humans to learn

d) Technological ideas of people

Question 6

Which of the technologies below would most be associated with the development of genetically modified organisms?

a) Bio-technology

b) Nano-technology

c) Information technology

d) Appropriate Technology

Question 7

What are the implications of the precautionary principle?

a) That firms should not invest in technology of the future returns are uncertain

b) That if there is the risk that technology might harm the public then the burden of proof that it will not is on the those that are trying to implement the new technology

c) That since we live in such an uncertain world that businesses should also seek to minimize risk

d) That businesses should do all they can to eliminate competitive threats

Question 8

The idea of "creative destruction" as developed by the economist Schumpeter is best described as:

a) The tendency for technology to sometimes have negative externalities

b) The abilities of monopoly firms to build powerful market positions

c) That innovation will be constant and will involve the replacement of existing businesses by companies using new and better technology

d) That many inventions arise out of the research and development of military developments

Question 9

If, as a result of a technological change, a company is able to develop new methods of producing a product and thus improve quality and reduce costs this would be an example of:

a) Product innovation

b) Product imitation

c) Product invention

d) Process innovation

Question 10

Appropriate Technology…

a) Is technology that seeks to replace energy intensive and polluting technologies

b) Is technology that is best suited to the local internal and external environment in which a business operates

c) Will occur when "high-tech" solutions replace "low-tech" ones

d) Is when one business copies the technology that has been developed by another

Oxford University Press, Online Resource Centre, Chapter 03.

Chapter 03

Instructions