Exam 18: Pricing the Factors of Production

Suppose that a community seeks to preserve air quality, and zones a "green belt" around the city, which prevents property development within the belt. What is the most likely result of this law?

List three primary ways in which profits above "normal" levels can be earned.

How does the market mechanism distribute income?

The marginal productivity principle says that a profit-maximizing firm should

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

In a free market for rental housing, effective rent control would have which effect?

MRP represents what the marginal physical product is worth.

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

The supply curve for land is perfectly elastic.

The marginal productivity principle implies that

A sum of money to be received in the future is worth more than a sum of money today.

At the Trolley House bar even the worst bartender makes $50 in tips a night, but most make $100. Tom, however, is the rare bartender who do fancy tricks with the bottles and make snazzy jokes. Tome earns $250 in tips per night. Tom's economic rent is

The demand for borrowed funds is

Marginal land is land on the borderline of

Suppose the marginal physical product of labor at a shoe string factory is 1,500 shoestrings per hour at 80 hours, 1,200 per hour shoestrings at 90 hours, 800 shoestrings per at 100 hours, and 300 shoestrings per hour at 110 hours. If a shoestring maker's wages are $60 per hour and each string sells for $0.05. What is the optimal use of labor for making shoestrings?

A sum of money received at a future date

The marginal revenue product of an input is the marginal physical product times the price per unit of output under perfect competition.

Which of the following activities is most likely to be considered rent seeking?

At high levels of interest, borrowers will borrow ____ and suppliers will supply ____.

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