Question 1

Regulations to prevent Usury are meant to

Accepted Answer

A) limit consumption of depletable resources. 
B) control rents from increasing. 
C) cap the cost of borrowing. 
D) provide a living wage. 
A) limit consumption of depletable resources. 
B) control rents from increasing. 
C) cap the cost of borrowing. 
D) provide a living wage.

Question 2

A lottery promises a $250,000 prize.But the prize money is paid out in $50,000 annual installments with the first installment received today.The winner is offered the option of an immediate lump-sum payment.If the interest rate remains at 10 percent for the entire period, what is the smallest amount the winner should accept?

Accepted Answer

A) $189,540 
B) $192,970 
C) $208,494 
D) $225,000 
A) $189,540 
B) $192,970 
C) $208,494 
D) $225,000

Question 3

Usury laws typically regulate

Accepted Answer

A) interest rates paid on savings. 
B) interest rates charged on loans. 
C) rents charged on land. 
D) economic rent earned in all factor markets. 
A) interest rates paid on savings. 
B) interest rates charged on loans. 
C) rents charged on land. 
D) economic rent earned in all factor markets.

Question 4

Capital is a flow of resources into the production of investment goods.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an example of a change in derived demand?

Accepted Answer

A) The demand for ice cream increases during a heat wave. 
B) The demand for large pickup trucks falls when the price of gasoline increases. 
C) The demand for buns increases when the price of food truck hot dogs increases. 
D) The demand for sunscreen falls when the local swimming pool increases prices. 
A) The demand for ice cream increases during a heat wave. 
B) The demand for large pickup trucks falls when the price of gasoline increases. 
C) The demand for buns increases when the price of food truck hot dogs increases. 
D) The demand for sunscreen falls when the local swimming pool increases prices.

Question 6

Suppose Billy runs a baseball team but has far less money to pay players than other teams.So he figures out how to find overlooked players who are worth more than other teams realize.Billy pays these players less than other teams would be willing to pay if they knew how good they were.As a result, Billy's team wins a lot of games without spending much on players.Which of the following is likely not true?

Accepted Answer

A) Billy's rent will equal the payroll costs of other teams with a similar number of wins less his payroll costs. 
B) Billy's rent will equal his payroll costs less the payroll costs of other teams with a similar number of wins. 
C) When rich teams realize how valuable these players are, they compete for the rent Billy is receiving by offering higher pay. 
D) When rich and poor teams realize how valuable the players Billy finds are, they compete for the rent Billy is receiving by copying his methods for evaluating players. 
A) Billy's rent will equal the payroll costs of other teams with a similar number of wins less his payroll costs. 
B) Billy's rent will equal his payroll costs less the payroll costs of other teams with a similar number of wins. 
C) When rich teams realize how valuable these players are, they compete for the rent Billy is receiving by offering higher pay. 
D) When rich and poor teams realize how valuable the players Billy finds are, they compete for the rent Billy is receiving by copying his methods for evaluating players.

Question 7

The windfall profits tax on oil will curtail oil production if

Accepted Answer

A) oil executives decide to be spiteful. 
B) the demand for oil is inelastic. 
C) the supply curve for oil is upward sloping. 
D) the supply curve for oil is vertical. 
A) oil executives decide to be spiteful. 
B) the demand for oil is inelastic. 
C) the supply curve for oil is upward sloping. 
D) the supply curve for oil is vertical.

Question 8

In the U.S.economy, labor receives

Accepted Answer

A) the lowest share of income. 
B) the highest share of income. 
C) about a quarter of income. 
D) about three-quarters of income. 
A) the lowest share of income. 
B) the highest share of income. 
C) about a quarter of income. 
D) about three-quarters of income.

Question 9

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 10

A firm should make an investment only if

Accepted Answer

A) it is profitable in every year. 
B) the present value of the profits exceeds the present value of the costs. 
C) the present value of the revenues exceeds the present value of the costs. 
D) there are no large losses in the early years. 
A) it is profitable in every year. 
B) the present value of the profits exceeds the present value of the costs. 
C) the present value of the revenues exceeds the present value of the costs. 
D) there are no large losses in the early years.

Exam 18: Pricing the Factors of Production

Regulations to prevent Usury are meant to

Usury laws typically regulate

Capital is a flow of resources into the production of investment goods.

Which of the following is an example of a change in derived demand?

The windfall profits tax on oil will curtail oil production if

In the U.S.economy, labor receives

Interest is the payment for the use of

A firm should make an investment only if

What Is Economics

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of 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

Contemporary Issues in the Useconomy

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