Question 1

Profits:

Accepted Answer

A) Are lower in the long run than in the short run 
B) Can be negative 
C) Are less in perfect competition than in monopoly 
D) All of the above 
A) Are lower in the long run than in the short run 
B) Can be negative 
C) Are less in perfect competition than in monopoly 
D) All of the above D

Question 2

The following affect rent EXCEPT

Accepted Answer

A) Better location 
B) Fertility of land 
C) Cleverness of landlords 
D) Scarcity of land 
A) Better location 
B) Fertility of land 
C) Cleverness of landlords 
D) Scarcity of land C

Question 3

Professor Knight is famous for his theory of:

Accepted Answer

A) Rent 
B) Profit 
C) Population 
D) Wages 
A) Rent 
B) Profit 
C) Population 
D) Wages B

Question 4

This is not a function of the entrepreneur:

Accepted Answer

A) Supervise 
B) Innovate 
C) Lend money 
D) Prepare plan 
A) Supervise 
B) Innovate 
C) Lend money 
D) Prepare plan

Question 5

According to Professor Knight risks are of _____ kinds:

Accepted Answer

A) two 
B) three 
C) four 
D) many 
A) two 
B) three 
C) four 
D) many

Question 6

A market system where there is only one buyer, is known as.

Accepted Answer

A) Monopoly 
B) Monopolistic competition 
C) Monopsony 
D) Monopsonistic competition 
A) Monopoly 
B) Monopolistic competition 
C) Monopsony 
D) Monopsonistic competition

Question 7

According to Modern Theory of Rent, rent accrues to

Accepted Answer

A) Land only 
B) Any factor 
C) Capital only 
D) Labour only 
A) Land only 
B) Any factor 
C) Capital only 
D) Labour only

Question 8

An increase in the wage rate:

Accepted Answer

A) Will usually lead to more people employed 
B) Will decrease total earnings of employees if the demand for labour is wage elastic 
C) Is illegal in a free market 
D) Will cause a shift in the demand for labour 
A) Will usually lead to more people employed 
B) Will decrease total earnings of employees if the demand for labour is wage elastic 
C) Is illegal in a free market 
D) Will cause a shift in the demand for labour

Question 9

These are kinds of rent EXCEPT

Accepted Answer

A) Differential rent 
B) Scarcity rent 
C) Mobility rent 
D) Location rent 
A) Differential rent 
B) Scarcity rent 
C) Mobility rent 
D) Location rent

Question 10

Risks in the business arise because of:

Accepted Answer

A) Introduction of the new products 
B) Uncertain policy of rival firms 
C) Changes in tastes 
D) All the above 
A) Introduction of the new products 
B) Uncertain policy of rival firms 
C) Changes in tastes 
D) All the above

Question 11

In economics capital refers to:

Accepted Answer

A) Money 
B) High quality goods 
C) Trade mark 
D) Machinery and factories 
A) Money 
B) High quality goods 
C) Trade mark 
D) Machinery and factories

Question 12

According to Keynes, interest is a payment for:

Accepted Answer

A) Use of durable goods 
B) Use of capital 
C) Use of money 
D) Use of land 
A) Use of durable goods 
B) Use of capital 
C) Use of money 
D) Use of land

Question 13

Some economists say that profit earner is a kind of:

Accepted Answer

A) Wage earner 
B) Rent receiver 
C) Interest receiver 
D) Govt. officer 
A) Wage earner 
B) Rent receiver 
C) Interest receiver 
D) Govt. officer

Question 14

Gross profit does NOT include:

Accepted Answer

A) Rent of land owned by the firm 
B) Pure profit 
C) Interest on capital owned by firm 
D) Taxes 
A) Rent of land owned by the firm 
B) Pure profit 
C) Interest on capital owned by firm 
D) Taxes

Question 15

According to Keynes interest is a payment for

Accepted Answer

A) Consumer's preference 
B) Producer's preference 
C) Liquidity preference 
D) State Bank's preference 
A) Consumer's preference 
B) Producer's preference 
C) Liquidity preference 
D) State Bank's preference

Question 16

Profits:

Accepted Answer

A) Are residual payment 
B) Are pre-determined 
C) Are fixed contract 
D) Are always higher than wages 
A) Are residual payment 
B) Are pre-determined 
C) Are fixed contract 
D) Are always higher than wages

Question 17

Profits arise because an entrepreneur:

Accepted Answer

A) Prepares plan 
B) Innovates 
C) Lends money 
D) Both (a) and (b 
A) Prepares plan 
B) Innovates 
C) Lends money 
D) Both (a) and (b

Question 18

With decrease in price of bonds, rate of interest:

Accepted Answer

A) Decreases 
B) Increases 
C) Does not change 
D) None of the above 
A) Decreases 
B) Increases 
C) Does not change 
D) None of the above

Question 19

Factor prices are determined in the market under forces of

Accepted Answer

A) Elasticity of demand 
B) Elasticity of supply 
C) Elasticity and supply 
D) None of the above 
A) Elasticity of demand 
B) Elasticity of supply 
C) Elasticity and supply 
D) None of the above

Question 20

Interest is paid because

Accepted Answer

A) Capital is scarce 
B) Capital is productive 
C) Capital is attractive 
D) Capital is surplus 
A) Capital is scarce 
B) Capital is productive 
C) Capital is attractive 
D) Capital is surplus

Profits:

The following affect rent EXCEPT

Professor Knight is famous for his theory of:

This is not a function of the entrepreneur:

According to Professor Knight risks are of _____ kinds:

A market system where there is only one buyer, is known as.

According to Modern Theory of Rent, rent accrues to

An increase in the wage rate:

These are kinds of rent EXCEPT

Risks in the business arise because of:

In economics capital refers to:

According to Keynes, interest is a payment for:

Some economists say that profit earner is a kind of:

Gross profit does NOT include:

According to Keynes interest is a payment for

Profits:

Profits arise because an entrepreneur:

With decrease in price of bonds, rate of interest:

Factor prices are determined in the market under forces of

Interest is paid because

Economic Concepts and Theories

Factor and Product Markets, Equilibrium, and Production Factors

Market Equilibrium and Welfare Economics

Welfare Economics and Efficiency Allocation

Key Concepts in Investment and Economic Analysis

Project Evaluation and International Trade Theories

International Trade Theory and Practice

Filters

Exam 2: Understanding Rent, Capital, and Profits in Economics

Profits:

The following affect rent EXCEPT

Professor Knight is famous for his theory of:

This is not a function of the entrepreneur:

According to Professor Knight risks are of _____ kinds:

A market system where there is only one buyer, is known as.

According to Modern Theory of Rent, rent accrues to

An increase in the wage rate:

These are kinds of rent EXCEPT

Risks in the business arise because of:

In economics capital refers to:

According to Keynes, interest is a payment for:

Some economists say that profit earner is a kind of:

Gross profit does NOT include:

According to Keynes interest is a payment for

Profits:

Profits arise because an entrepreneur:

With decrease in price of bonds, rate of interest:

Factor prices are determined in the market under forces of

Interest is paid because

Economic Concepts and Theories

Factor and Product Markets, Equilibrium, and Production Factors

Market Equilibrium and Welfare Economics

Welfare Economics and Efficiency Allocation

Key Concepts in Investment and Economic Analysis

Project Evaluation and International Trade Theories

International Trade Theory and Practice

Filters