Question 1

Explain what is meant by "derived demand" as it relates to factors of production.

Accepted Answer

The demand for a factor of production is

Question 2

Between 1988 and 1989, the price of retail space in Ginza, Tokyo's premier commercial and entertainment center, rose from $400 to $625 per square foot.This was the result of an increase in demand in the face of a perfectly inelastic supply curve for retail space.Economists call this

Accepted Answer

A) monopoly profit. 
B) economic rent. 
C) usury. 
D) marginal revenue product. 
A) monopoly profit. 
B) economic rent. 
C) usury. 
D) marginal revenue product.

Question 3

Which of the following statements is correct?

Accepted Answer

A) The demand for capital is derived from the demands for outputs. 
B) The demands for output are derived from the demand for capital. 
C) The demand for capital is derived from the demand for rent. 
D) The demand for rent is derived from the demand for capital. 
A) The demand for capital is derived from the demands for outputs. 
B) The demands for output are derived from the demand for capital. 
C) The demand for capital is derived from the demand for rent. 
D) The demand for rent is derived from the demand for capital.

Question 4

If savers do not have fixed savings goals, the supply curve of loanable funds will generally be

Accepted Answer

A) horizontal. 
B) downward sloping. 
C) vertical. 
D) upward sloping. 
A) horizontal. 
B) downward sloping. 
C) vertical. 
D) upward sloping.

Question 5

The distribution of income in a market economy is determined by

Accepted Answer

A) the level of employment and prices of the factors of production. 
B) the prices of factors of production. 
C) largely unknown forces which economists seek to discover. 
D) decisions of government offices related to distribution. 
A) the level of employment and prices of the factors of production. 
B) the prices of factors of production. 
C) largely unknown forces which economists seek to discover. 
D) decisions of government offices related to distribution.

Question 6

Explain the effect of a usury law.

Accepted Answer

A usury law puts a ceiling on the intere

Question 7

Usury laws interfere with the automatic workings of the market mechanism.

Accepted Answer

A) True 
 B)False

Question 8

Firms will borrow to finance capital expansion until the MRP of the investment equals the

Accepted Answer

A) MRP of labor. 
B) marginal cost of the finished good. 
C) marginal physical product of capital. 
D) interest payment charged for borrowing. 
A) MRP of labor. 
B) marginal cost of the finished good. 
C) marginal physical product of capital. 
D) interest payment charged for borrowing.

Question 9

Entrepreneurship is the act of starting new firms and taking the risks that are necessary in business opportunities.

Accepted Answer

A) True 
 B)False

Question 10

On January 1, 2010, a homeowner borrowed $5,000 for a term of six months to complete some home improvements, paying an annual interest rate of 8 percent.How much principal and interest will the homeowner pay back on July 1, 2010?

Accepted Answer

A) $2,500 
B) $2,900 
C) $5,200 
D) $5,400 
A) $2,500 
B) $2,900 
C) $5,200 
D) $5,400

Question 11

The marginal productivity theory of distribution has been criticized because

Accepted Answer

A) it assumes that the existing distribution of ownership factors is fair and just when it may not be. 
B) it does not tell us much about real policy matters. 
C) a factor's MRP does not in any way correspond to productive effort. 
D) All of the above are correct. 
A) it assumes that the existing distribution of ownership factors is fair and just when it may not be. 
B) it does not tell us much about real policy matters. 
C) a factor's MRP does not in any way correspond to productive effort. 
D) All of the above are correct.

Question 12

Define the following terms briefly and concisely and indicate their importance to the study of economics.
a.entrepreneurship
b.investment
c.capital
d.innovation
e.discounting

Accepted Answer

a.Entrepreneurship is the act of startin

Question 13

Capital is to investment as

Accepted Answer

A) hard is to soft. 
B) a flow is to a stock. 
C) a stock is to a flow. 
D) paper is to metal. 
A) hard is to soft. 
B) a flow is to a stock. 
C) a stock is to a flow. 
D) paper is to metal.

Exam 18: Pricing the Factors of Production

Explain what is meant by "derived demand" as it relates to factors of production.

Between 1988 and 1989, the price of retail space in Ginza, Tokyo's premier commercial and entertainment center, rose from $400 to $625 per square foot.This was the result of an increase in demand in the face of a perfectly inelastic supply curve for retail space.Economists call this

Which of the following statements is correct?

If savers do not have fixed savings goals, the supply curve of loanable funds will generally be

The distribution of income in a market economy is determined by

Explain the effect of a usury law.

Usury laws interfere with the automatic workings of the market mechanism.

Firms will borrow to finance capital expansion until the MRP of the investment equals the

Entrepreneurship is the act of starting new firms and taking the risks that are necessary in business opportunities.

On January 1, 2010, a homeowner borrowed $5,000 for a term of six months to complete some home improvements, paying an annual interest rate of 8 percent.How much principal and interest will the homeowner pay back on July 1, 2010?

The marginal productivity theory of distribution has been criticized because

Define the following terms briefly and concisely and indicate their importance to the study of economics. a.entrepreneurship b.investment c.capital d.innovation e.discounting

Capital is to investment as

What Is Economics

The Economy: 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

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

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

He 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

Filters