Exam 18: Pricing the Factors of Production

The functioning of a market economy is very dependent upon investment for provision of capital and future growth.Describe the process of investment and employment of the created capital in production.

Invention is the discovery of a new process or idea.Innovation is

In general, the quantity of savings supplied to be used for lending increases with the rate of interest.

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

Which of the following would be classified as an innovation?

As interest rates rise, more and more investments become profitable for a firm.

Figure 19-2 -The demand curve for the input in Figure 19-2 is

Interest is the payment for the use of funds used to produce capital.

A usury ceiling will be effective depending on

California passed a law called "Proposition 2 1/2" that limited property taxes to 2.5 percent of property value.Naturally this reduced taxes on many properties, and apartment landlords had more money at the end of the year at given rents.This windfall could be called an economic rent only if

An employer would never operate on the upward-sloping part of an MRP curve because

A ptomaine poisoning scare causes a decrease in the demand for canned tuna fish.Everything else equal, the demand curve for aluminum cans will

Capital is defined as

Almost all of the rent that tenants pay to landlords of apartments buildings is economic rent.

If the interest rate on borrowing falls,

Mr.Calhoun owned a worn-out piece of farmland for growing cotton, which he had been unable to rent for years.Suddenly he was getting offers from cotton farmers to lease his land.What is the most likely explanation of this?

A lottery promises a $250,000 prize.But the prize money is paid out in $50,000 annual installments with the first installment received today..The winner is offered the option of an immediate lump-sum payment.If the interest rate remains at 10 percent for the entire period, what is the smallest amount the winner should accept?

Marginal productivity analysis shows that a drop in the price of the product will cause input use to

When factor markets are competitive, it always pays a profit-maximizing firm to

Capital is a flow of resources into the production of investment goods.