Question 1

If the credit market is close to being a competitive market, an interest rate ceiling imposed by usury laws will bring misallocations of resources.

Accepted Answer

A) True 
 B)False

Question 2

The marginal productivity principle has some relevance to organizing production in a socialist society.

Accepted Answer

A) True 
 B)False

Question 3

Usury laws are designed to ensure that interest rates in the market do not exceed acceptable norms.

Accepted Answer

A) True 
 B)False

Question 4

The loan supply curve has a positive slope

Accepted Answer

A)  for all savers. 
B)  only for savers with fixed accumulation targets. 
C)  for all savers except those with fixed accumulation goals. 
D)  only for those contemplating retirement. 
A)  for all savers. 
B)  only for savers with fixed accumulation targets. 
C)  for all savers except those with fixed accumulation goals. 
D)  only for those contemplating retirement.

Question 5

A "single tax" on land was proposed in the nineteenth century by

Accepted Answer

A)  Lloyd George. 
B)  Henry George. 
C)  George Washington. 
D)  George Sands. 
A)  Lloyd George. 
B)  Henry George. 
C)  George Washington. 
D)  George Sands.

Question 6

An employer would never operate on the upward-sloping part of an MRP curve because

Accepted Answer

A)  he would not be maximizing profits. 
B)  he would be hiring workers at wages above MRP. 
C)  the number of workers is too large to get economies of scale. 
D)  he would then have too little capital per worker. 
A)  he would not be maximizing profits. 
B)  he would be hiring workers at wages above MRP. 
C)  the number of workers is too large to get economies of scale. 
D)  he would then have too little capital per worker.

Question 7

Activist capitalists who seek out or create earnings opportunities and assume risk, for which they receive profits, are called

Accepted Answer

A)  rent seekers. 
B)  entrepreneurs. 
C)  muckrakers. 
D)  marginalists. 
A)  rent seekers. 
B)  entrepreneurs. 
C)  muckrakers. 
D)  marginalists.

Question 8

Almost all of the rent that tenants pay to landlords of apartments buildings is economic rent.

Accepted Answer

A) True 
 B)False

Question 9

If savers do not have fixed savings goals, the supply curve of loanable funds will generally be

Accepted Answer

A)  horizontal. 
B)  downward sloping. 
C)  vertical. 
D)  upward sloping. 
A)  horizontal. 
B)  downward sloping. 
C)  vertical. 
D)  upward sloping.

Question 10

The process of building up capital includes

Accepted Answer

A)  acquiring funds from banks and other sources. 
B)  use of borrowed funds to hire inputs to build factories, warehouses, etc. 
C)  completion of the investment process by adding machinery and inventory. 
D)  All of the above are correct. 
A)  acquiring funds from banks and other sources. 
B)  use of borrowed funds to hire inputs to build factories, warehouses, etc. 
C)  completion of the investment process by adding machinery and inventory. 
D)  All of the above are correct.

Question 11

Of all the payments made to factors of production in the United States in 2009, ____ received the lowest share.

Accepted Answer

A)  land rents 
B)  labor 
C)  interest payments 
D)  corporate profits 
A)  land rents 
B)  labor 
C)  interest payments 
D)  corporate profits

Question 12

The principle of marginal productivity

Accepted Answer

A)  is the same as the principle of marginal cost. 
B)  helps explain the demand for each input. 
C)  differs from industry to industry. 
D)  allows the world's food to be grown in a flower pot. 
A)  is the same as the principle of marginal cost. 
B)  helps explain the demand for each input. 
C)  differs from industry to industry. 
D)  allows the world's food to be grown in a flower pot.

Question 13

Interest is the payment for the use of

Accepted Answer

A)  borrowed funds. 
B)  natural resources. 
C)  labor. 
D)  any factor of production. 
A)  borrowed funds. 
B)  natural resources. 
C)  labor. 
D)  any factor of production.

Question 14

A usury rate is like a price ceiling.

Accepted Answer

A) True 
 B)False

Question 15

An outward shift in the demand curve for land will

Accepted Answer

A)  make previously zero-rent land profitable. 
B)  induce people to begin to use land more extensively. 
C)  force reductions in rents. 
D)  be accompanied by a shift in the supply of land. 
A)  make previously zero-rent land profitable. 
B)  induce people to begin to use land more extensively. 
C)  force reductions in rents. 
D)  be accompanied by a shift in the supply of land.

Question 16

Profit is the return to entrepreneurship.

Accepted Answer

A) True 
 B)False

Question 17

Usury laws interfere with the automatic workings of the market mechanism.

Accepted Answer

A) True 
 B)False

Question 18

Figure 19-3
  
-Which panel in Figure 19-3 represents the case of an effective usury law?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 19

High profits in some risky industries attract additional entrepreneurs to those industries.

Accepted Answer

A) True 
 B)False

Question 20

It is true of the demand side of the market for input pricing that

Accepted Answer

A)  the same marginal productivity principle serves as the foundation for the demand schedule for each type of input. 
B)  the demand schedule for one input cannot be determined independently of demand schedules for other inputs. 
C)  the demand curve is the complete MRP curve. 
D)  any inward shift in demand for a commodity will result in outward shifts in the demand curves for the inputs used to produce the commodity. 
A)  the same marginal productivity principle serves as the foundation for the demand schedule for each type of input. 
B)  the demand schedule for one input cannot be determined independently of demand schedules for other inputs. 
C)  the demand curve is the complete MRP curve. 
D)  any inward shift in demand for a commodity will result in outward shifts in the demand curves for the inputs used to produce the commodity.

Exam 19: Pricing the Factors of Production

If the credit market is close to being a competitive market, an interest rate ceiling imposed by usury laws will bring misallocations of resources.

The marginal productivity principle has some relevance to organizing production in a socialist society.

Usury laws are designed to ensure that interest rates in the market do not exceed acceptable norms.

The loan supply curve has a positive slope

A "single tax" on land was proposed in the nineteenth century by

An employer would never operate on the upward-sloping part of an MRP curve because

Activist capitalists who seek out or create earnings opportunities and assume risk, for which they receive profits, are called

Almost all of the rent that tenants pay to landlords of apartments buildings is economic rent.

If savers do not have fixed savings goals, the supply curve of loanable funds will generally be

The process of building up capital includes

Of all the payments made to factors of production in the United States in 2009, ____ received the lowest share.

The principle of marginal productivity

Interest is the payment for the use of

A usury rate is like a price ceiling.

An outward shift in the demand curve for land will

Profit is the return to entrepreneurship.

Usury laws interfere with the automatic workings of the market mechanism.

Figure 19-3 -Which panel in Figure 19-3 represents the case of an effective usury law?

High profits in some risky industries attract additional entrepreneurs to those industries.

It is true of the demand side of the market for input pricing that

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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