Exam 18: Pricing the Factors of Production

Which factor receives the profit from production?

An inward shift of the demand curve for a product causes outward shifts in the demand curves for all the factors used to produce the product.

The demand for borrowed funds is a derived demand.

Economic rent is a payment for a factor of production that elicits an increase in the quantity supplied.

If the demand for softballs increases, one could expect the demand for leather to increase. This is attributable to the

An increase in land rents

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

A firm should make an investment only if

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?

As interest rates increase,

Usury laws typically regulate

Capital is the

Discounting is the process of

The demand curve for capital is

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

When a few rival groups spend money in competition for a license that grants them a monopoly for the provision of cable TV for an area, economists label this activity

In a competitive market for Sardines, if Mama Jessica's chain of pizza restaurants decides to support hard-working sardine fishers by paying 15 percent above market price, what would the theory of economic rent predict?

Mr. Paque is a bear hunter for timber companies that want to diminish damage to trees done by bears in the spring. Due to a reduction in the bear population between 1995 and 2005, Mr. Paque finds fewer bears each year and additional hours spent hunting produce fewer additional bears. This means that Mr. Paque's (i)overall productivity has fallen; (ii)marginal product has fallen.

If mining companies are indifferent between operating and not operating a quarry, that quarry is

Investment is a flow of resources into the production of new capital.