Question 1

Refer to the table, in which the values for columns (2)through (5)are in acres. If the relevant columns are (1), (2), and (4), land rent will be

Accepted Answer

A) $100 per acre. 
B) $300 per acre. 
C) $200 per acre. 
D) $400 per acre. 
A) $100 per acre. 
B) $300 per acre. 
C) $200 per acre. 
D) $400 per acre.

Question 2

Entrepreneurs normally do all of the following except

Accepted Answer

A) taking the initiative in combining other resources to produce goods or services. 
B) making the basic, nonroutine policy decisions for their organization. 
C) bearing the risks involved in introducing new products or production innovations. 
D) getting hired as a top executive in established corporations. 
A) taking the initiative in combining other resources to produce goods or services. 
B) making the basic, nonroutine policy decisions for their organization. 
C) bearing the risks involved in introducing new products or production innovations. 
D) getting hired as a top executive in established corporations.

Question 3

For a given future value and interest rate, the discounted present value will become larger as the time period gets longer.

Accepted Answer

A) True 
 B)False

Question 4

Economists would not consider which one of the following to be a productive economic resource?

Accepted Answer

A) land 
B) capital goods 
C) money 
D) entrepreneurship 
A) land 
B) capital goods 
C) money 
D) entrepreneurship

Question 5

In Progress and Poverty (1879), Henry George argued for

Accepted Answer

A) a progressive income tax. 
B) a heavy tax on land-rent income. 
C) a flat tax. 
D) a subsidy for land. 
A) a progressive income tax. 
B) a heavy tax on land-rent income. 
C) a flat tax. 
D) a subsidy for land.

Question 6

Refer to the demand schedule and possible supply schedules, A-D. There would be no incentive function performed by price in which of the given resource supply schedules?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 7

Currently, capitalist income, that is, corporate profits, interest, and rent, accounts for about what percentage of the income paid to American resource suppliers?

Accepted Answer

A) 10 percent 
B) 20 percent 
C) 50 percent 
D) 80 percent 
A) 10 percent 
B) 20 percent 
C) 50 percent 
D) 80 percent

Question 8

Refer to the diagrams. Assume that only wheat can be grown on the three grades of land shown in Figures (a), (b), and (c). Also assume that identical amounts of labor, capital, and other needed inputs are used in farming each grade of land. On the basis of these three figures, we

Accepted Answer

A) the land shown in both Figures (a)and (b)is a "free good." 
B) the land shown in Figure (a)only is a "free good." 
C) the land shown in all three figures is a "free good." 
D) land is not a "free good" in any of the three figures. 
A) the land shown in both Figures (a)and (b)is a "free good." 
B) the land shown in Figure (a)only is a "free good." 
C) the land shown in all three figures is a "free good." 
D) land is not a "free good" in any of the three figures.

Question 9

Refer to the table representing Kara's bank account. If the $3,000 was deposited into her account at the beginning of year 1 and no further deposits or withdrawals were made, the value for cell D

Accepted Answer

A) cannot be determined. 
B) is $472.88. 
C) is $165.38. 
D) is $307.50. 
A) cannot be determined. 
B) is $472.88. 
C) is $165.38. 
D) is $307.50.

Question 10

Other things equal, short-term loans usually have lower rates of interest than do long-term loans.

Accepted Answer

A) True 
 B)False

Question 11

Some countries have negative nominal interest rates. Which of the following statements about this situation is not true?

Accepted Answer

A) A saver or lender will get back less than the amount she invested. 
B) This is mostly a result of deliberate central bank policies. 
C) Consumers are expected to save more and consume less. 
D) Consumers are expected to borrow more and spend more. 
A) A saver or lender will get back less than the amount she invested. 
B) This is mostly a result of deliberate central bank policies. 
C) Consumers are expected to save more and consume less. 
D) Consumers are expected to borrow more and spend more.

Question 12

If the inflation rate is 10 percent, what is a bank's real rate of return on a loan of $100 at 10 percent interest?

Accepted Answer

A) $100 
B) $10 
C) 10 percent 
D) 0 percent 
A) $100 
B) $10 
C) 10 percent 
D) 0 percent

Question 13

Economic profits are not payments received for

Accepted Answer

A) taking uninsurable risks in a firm. 
B) making products or production innovations. 
C) starting up a business. 
D) working for someone else. 
A) taking uninsurable risks in a firm. 
B) making products or production innovations. 
C) starting up a business. 
D) working for someone else.

Question 14

Which of the following is correct?

Accepted Answer

A) Money is a resource, but real capital is not. 
B) Real capital is a resource, but money is not. 
C) Neither money nor real capital is a resource. 
D) Both money and real capital are resources. 
A) Money is a resource, but real capital is not. 
B) Real capital is a resource, but money is not. 
C) Neither money nor real capital is a resource. 
D) Both money and real capital are resources.

Question 15

Suppose that the available quantity of a certain type of farmland is 400,000 acres, and the demand for this land is given in the table. How much of the farmland will be rented?

Accepted Answer

A) 200,000 acres 
B) 300,000 acres 
C) 400,000 acres 
D) 500,000 acres 
A) 200,000 acres 
B) 300,000 acres 
C) 400,000 acres 
D) 500,000 acres

Question 16

For all practical purposes, the supply of land is

Accepted Answer

A) almost perfectly inelastic. 
B) negatively sloped. 
C) relatively elastic. 
D) perfectly elastic. 
A) almost perfectly inelastic. 
B) negatively sloped. 
C) relatively elastic. 
D) perfectly elastic.

Question 17

If the interest rate is 5 percent, what is the present value of $10,000 received three years from now?

Accepted Answer

A) $8,638 
B) $9,000 
C) $11,600 
D) $11,000 
A) $8,638 
B) $9,000 
C) $11,600 
D) $11,000

Question 18

Economists who have studied the composition of "proprietor's income" have found that this income item is made up of

Accepted Answer

A) wages and profits, mostly wages. 
B) interest and profits, mostly profits. 
C) rent and interest, mostly interest. 
D) wages and interest, mostly wages. 
A) wages and profits, mostly wages. 
B) interest and profits, mostly profits. 
C) rent and interest, mostly interest. 
D) wages and interest, mostly wages.

Question 19

One effect of a usury law is that it will

Accepted Answer

A) benefit lenders. 
B) penalize borrowers. 
C) increase the efficiency of investment. 
D) subsidize borrowers with high incomes. 
A) benefit lenders. 
B) penalize borrowers. 
C) increase the efficiency of investment. 
D) subsidize borrowers with high incomes.

Question 20

The table shows the projected rate of return and number of investment projects that might be undertaken by a small firm. Each project requires an investment of $1,000. The number of investment projects this firm would undertake will decrease from 4 to 2 if the interest rate in the loanable funds market

Accepted Answer

A) increases from 10 percent to 20 percent. 
B) decreases from 20 percent to 10 percent. 
C) decreases from 15 percent to 10 percent. 
D) increases from 15 percent to 20 percent. 
A) increases from 10 percent to 20 percent. 
B) decreases from 20 percent to 10 percent. 
C) decreases from 15 percent to 10 percent. 
D) increases from 15 percent to 20 percent.

Exam 18: Rent, Interest, and Profit

Refer to the table, in which the values for columns (2)through (5)are in acres. If the relevant columns are (1), (2), and (4), land rent will be

Entrepreneurs normally do all of the following except

For a given future value and interest rate, the discounted present value will become larger as the time period gets longer.

Economists would not consider which one of the following to be a productive economic resource?

In Progress and Poverty (1879), Henry George argued for

Refer to the demand schedule and possible supply schedules, A-D. There would be no incentive function performed by price in which of the given resource supply schedules?

Currently, capitalist income, that is, corporate profits, interest, and rent, accounts for about what percentage of the income paid to American resource suppliers?

Refer to the diagrams. Assume that only wheat can be grown on the three grades of land shown in Figures (a), (b), and (c). Also assume that identical amounts of labor, capital, and other needed inputs are used in farming each grade of land. On the basis of these three figures, we

Refer to the table representing Kara's bank account. If the $3,000 was deposited into her account at the beginning of year 1 and no further deposits or withdrawals were made, the value for cell D

Other things equal, short-term loans usually have lower rates of interest than do long-term loans.

Some countries have negative nominal interest rates. Which of the following statements about this situation is not true?

If the inflation rate is 10 percent, what is a bank's real rate of return on a loan of $100 at 10 percent interest?

Economic profits are not payments received for

Which of the following is correct?

Suppose that the available quantity of a certain type of farmland is 400,000 acres, and the demand for this land is given in the table. How much of the farmland will be rented?

For all practical purposes, the supply of land is

If the interest rate is 5 percent, what is the present value of $10,000 received three years from now?

Economists who have studied the composition of "proprietor's income" have found that this income item is made up of

One effect of a usury law is that it will

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, RD, and Efficiency

The Demand for Resources

Wage Determination

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters