Question 1

The supply curve for land is perfectly elastic.

Accepted Answer

A) True 
 B)False

Question 2

Changes in market rents are mainly determined by changes in

Accepted Answer

A) the demand for the fixed factors. 
B) the elasticity of supply. 
C) the supply of fixed factors. 
D) the intensity of production on the land. 
A) the demand for the fixed factors. 
B) the elasticity of supply. 
C) the supply of fixed factors. 
D) the intensity of production on the land.

Question 3

Corporate profits account for the largest portion of U.S.national income.

Accepted Answer

A) True 
 B)False

Question 4

The rate of interest is the price at which money is borrowed and loaned.

Accepted Answer

A) True 
 B)False

Question 5

Steph Curry loves playing basketball so much that he would be willing accept a salary that simply keeps him housed and fed.But because his skills are so rare, professional basketball teams will compete to pay him tens of millions of dollars to play for them.These tens of millions of dollars are

Accepted Answer

A) pure profit. 
B) economic rent. 
C) marginal rent. 
D) competitive rent. 
A) pure profit. 
B) economic rent. 
C) marginal rent. 
D) competitive rent.

Question 6

Interest is the payment for the use of funds used to produce capital.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

As interest rates rise, more and more investments become profitable for a firm.

Accepted Answer

A) True 
 B)False

Question 9

Suppose that one could determine the amount of income that is pure economic rent.If a law were passed that taxed 50 percent of that rent, what would happen to the amount of work that people perform?

Accepted Answer

A) It would increase as people seek higher income. 
B) It would be unchanged. 
C) It would decrease as people suffer a loss of income. 
D) It would increase for some and decrease for others. 
A) It would increase as people seek higher income. 
B) It would be unchanged. 
C) It would decrease as people suffer a loss of income. 
D) It would increase for some and decrease for others.

Question 10

MPP is the additional output that results from a one-unit increase in use of the input.

Accepted Answer

A) True 
 B)False

Question 11

Owners of buildings can expect to collect ____ economic rent in the long run.

Accepted Answer

A) much 
B) marginal 
C) a competitive 
D) little or no 
A) much 
B) marginal 
C) a competitive 
D) little or no

Question 12

The quantity demanded of an input normally rises as its price rises.

Accepted Answer

A) True 
 B)False

Question 13

Economic rent is paid only to land, and not to other resources.

Accepted Answer

A) True 
 B)False

Question 14

The marginal productivity principle demonstrates that distribution under a capitalist system is ethically valid.

Accepted Answer

A) True 
 B)False

Question 15

In general, the quantity of savings supplied to be used for lending increases with the rate of interest.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not true about marginal revenue product?

Accepted Answer

A) It shows the value of the marginal physical product. 
B) It is the marginal physical product times price of the product under perfect competition. 
C) It is the marginal physical product times marginal revenue. 
D) It shows the marginal costs of inputs. 
A) It shows the value of the marginal physical product. 
B) It is the marginal physical product times price of the product under perfect competition. 
C) It is the marginal physical product times marginal revenue. 
D) It shows the marginal costs of inputs.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Consider four parcels of peanut growing land.The nonland peanut production costs are $1,000 for Parcel A, $1,200 for Parcel B, $1,600 for Parcel C, and $1,700 for Parcel D.If, before rents are charged, farmers are indifferent between planting on Parcel, then which of the following is true?

Accepted Answer

A) Parcel A's rent is $200 and Parcel C's rent $0. 
B) Parcel A's rent is $200 and Parcel B's rent $400. 
C) Parcel A's rent is $600 and Parcel B's rent $300. 
D) Parcel A's rent is $600 and Parcel D's rent $0. 
A) Parcel A's rent is $200 and Parcel C's rent $0. 
B) Parcel A's rent is $200 and Parcel B's rent $400. 
C) Parcel A's rent is $600 and Parcel B's rent $300. 
D) Parcel A's rent is $600 and Parcel D's rent $0.

Question 19

Which of the following is not a result of the theory of land rent?

Accepted Answer

A) Capital invested on any plot of land must yield the same return as capital invested on any other plot of land. 
B) The difference between the costs of producing on any two pieces of land must equal the difference between their rents. 
C) Marginal land earns no rent. 
D) Productive land earns more rent than marginal land, which earns more rent than nonproductive land. 
A) Capital invested on any plot of land must yield the same return as capital invested on any other plot of land. 
B) The difference between the costs of producing on any two pieces of land must equal the difference between their rents. 
C) Marginal land earns no rent. 
D) Productive land earns more rent than marginal land, which earns more rent than nonproductive land.

Question 20

A ptomaine poisoning scare causes a decrease in the demand for canned tuna fish.Everything else equal, the demand curve for aluminum cans will

Accepted Answer

A) become steeper. 
B) become flatter. 
C) fall. 
D) rise. 
A) become steeper. 
B) become flatter. 
C) fall. 
D) rise.

Exam 18: Pricing the Factors of Production

The supply curve for land is perfectly elastic.

Changes in market rents are mainly determined by changes in

Corporate profits account for the largest portion of U.S.national income.

The rate of interest is the price at which money is borrowed and loaned.

Steph Curry loves playing basketball so much that he would be willing accept a salary that simply keeps him housed and fed.But because his skills are so rare, professional basketball teams will compete to pay him tens of millions of dollars to play for them.These tens of millions of dollars are

Interest is the payment for the use of funds used to produce capital.

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

As interest rates rise, more and more investments become profitable for a firm.

Suppose that one could determine the amount of income that is pure economic rent.If a law were passed that taxed 50 percent of that rent, what would happen to the amount of work that people perform?

MPP is the additional output that results from a one-unit increase in use of the input.

Owners of buildings can expect to collect ____ economic rent in the long run.

The quantity demanded of an input normally rises as its price rises.

Economic rent is paid only to land, and not to other resources.

The marginal productivity principle demonstrates that distribution under a capitalist system is ethically valid.

In general, the quantity of savings supplied to be used for lending increases with the rate of interest.

Which of the following is not true about marginal revenue product?

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

Consider four parcels of peanut growing land.The nonland peanut production costs are $1,000 for Parcel A, $1,200 for Parcel B, $1,600 for Parcel C, and $1,700 for Parcel D.If, before rents are charged, farmers are indifferent between planting on Parcel, then which of the following is true?

Which of the following is not a result of the theory of land rent?

A ptomaine poisoning scare causes a decrease in the demand for canned tuna fish.Everything else equal, the demand curve for aluminum cans will

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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