Question 1

If the demand for land shifts upward, rents will be

Accepted Answer

A) earned by some land that was formerly unprofitable. 
B) lost to many landowners. 
C) diminished for society as a whole. 
D) taxed away to help pay the costs of government. 
A) earned by some land that was formerly unprofitable. 
B) lost to many landowners. 
C) diminished for society as a whole. 
D) taxed away to help pay the costs of government.

Question 2

The demand curve for capital is

Accepted Answer

A) its entire marginal physical product curve. 
B) the downward-sloping portion of its marginal physical product curve. 
C) its entire marginal revenue product curve. 
D) the downward-sloping portion of its marginal revenue product curve. 
A) its entire marginal physical product curve. 
B) the downward-sloping portion of its marginal physical product curve. 
C) its entire marginal revenue product curve. 
D) the downward-sloping portion of its marginal revenue product curve.

Question 3

Capital is the

Accepted Answer

A) flow of new equipment that a firm acquires over the course of a year. 
B) amount of increase in a firm's equipment over a year. 
C) amount of money that a firm has on hand at a given time. 
D) stock of plant, equipment, and other productive resources held by a firm. 
A) flow of new equipment that a firm acquires over the course of a year. 
B) amount of increase in a firm's equipment over a year. 
C) amount of money that a firm has on hand at a given time. 
D) stock of plant, equipment, and other productive resources held by a firm.

Question 4

If a ton of steel sells for $15,000 and a car made from a ton of steel sells for $30,000, then if all markets are perfectly competitive, how many cars can be made from the last ton of steel used by a profit-maximizing firm?

Accepted Answer

A) 1/3 car 
B) 1/2 car 
C) 1 car 
D) 1.5 cars 
A) 1/3 car 
B) 1/2 car 
C) 1 car 
D) 1.5 cars

Question 5

Marginal land is land

Accepted Answer

A) that is unprofitable under any circumstances. 
B) that is the most productive in the area. 
C) that is on the borderline of profitability. 
D) of average productivity. 
A) that is unprofitable under any circumstances. 
B) that is the most productive in the area. 
C) that is on the borderline of profitability. 
D) of average productivity.

Question 6

The marginal productivity theory is irrelevant to organizing production in a socialist society.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Of all the payments made to factors of production in the United States in 2013, ____ received the lowest share.

Accepted Answer

A) land rents 
B) labor 
C) interest payments 
D) corporate profits 
A) land rents 
B) labor 
C) interest payments 
D) corporate profits

Question 9

Although it is possible to determine the present value of a payment to be received in one year, it is not possible to determine the present value of a stream of payments over several years.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) more; less 
B) less; more 
C) less; less 
D) more; more 
A) more; less 
B) less; more 
C) less; less 
D) more; more

Question 11

In sophisticated analysis of rent differences

Accepted Answer

A) quality of land is assumed away. 
B) quality of land is recognized and considered. 
C) rates of return are assumed away. 
D) returns on land and capital are assumed to be similar. 
A) quality of land is assumed away. 
B) quality of land is recognized and considered. 
C) rates of return are assumed away. 
D) returns on land and capital are assumed to be similar.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Marginal physical product is

Accepted Answer

A) the increase in input usage resulting from an increase in revenue. 
B) the same as marginal revenue product. 
C) equal to average physical product when a monopoly firm is in equilibrium. 
D) the increase in output stemming from a one-unit increase in input. 
A) the increase in input usage resulting from an increase in revenue. 
B) the same as marginal revenue product. 
C) equal to average physical product when a monopoly firm is in equilibrium. 
D) the increase in output stemming from a one-unit increase in input.

Question 14

Economic rent refers to profit derived from owning an apartment complex.

Accepted Answer

A) True 
 B)False

Question 15

When an economist says a change in the market for land causes a farmer to use his land more intensively, he means that the farmer

Accepted Answer

A) produces more output than before, so the marginal product of his land falls. 
B) produces less output than before, so the marginal product of his land rises. 
C) uses greater amounts of nonland inputs than before, so the marginal revenue product of his land rises. 
D) uses smaller amounts of nonland inputs than before, so the marginal revenue product of his land falls. 
A) produces more output than before, so the marginal product of his land falls. 
B) produces less output than before, so the marginal product of his land rises. 
C) uses greater amounts of nonland inputs than before, so the marginal revenue product of his land rises. 
D) uses smaller amounts of nonland inputs than before, so the marginal revenue product of his land falls.

Question 16

An outward shift in the demand curve for land will

Accepted Answer

A) make previously zero-rent land profitable. 
B) induce people to begin to use land more extensively. 
C) force reductions in rents. 
D) be accompanied by a shift in the supply of land. 
A) make previously zero-rent land profitable. 
B) induce people to begin to use land more extensively. 
C) force reductions in rents. 
D) be accompanied by a shift in the supply of land.

Question 17

A sum of money received at a future date

Accepted Answer

A) is worth less than the same sum of money received today. 
B) is worth more than the same sum of money received today. 
C) has the same value as the same sum of money received today. 
D) is worth less than the same sum of money received yesterday. 
A) is worth less than the same sum of money received today. 
B) is worth more than the same sum of money received today. 
C) has the same value as the same sum of money received today. 
D) is worth less than the same sum of money received yesterday.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The principle of marginal productivity

Accepted Answer

A) is the same as the principle of marginal cost. 
B) helps explain the demand for each input. 
C) differs from industry to industry. 
D) allows the world's food to be grown in a flower pot. 
A) is the same as the principle of marginal cost. 
B) helps explain the demand for each input. 
C) differs from industry to industry. 
D) allows the world's food to be grown in a flower pot.

Question 20

The rate of interest is the price at which money is borrowed and loaned.

Accepted Answer

A) True 
 B)False

Exam 18: Pricing the Factors of Production

If the demand for land shifts upward, rents will be

The demand curve for capital is

Capital is the

If a ton of steel sells for $15,000 and a car made from a ton of steel sells for $30,000, then if all markets are perfectly competitive, how many cars can be made from the last ton of steel used by a profit-maximizing firm?

Marginal land is land

The marginal productivity theory is irrelevant to organizing production in a socialist society.

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

Of all the payments made to factors of production in the United States in 2013, ____ received the lowest share.

Although it is possible to determine the present value of a payment to be received in one year, it is not possible to determine the present value of a stream of payments over several years.

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

In sophisticated analysis of rent differences

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

Marginal physical product is

Economic rent refers to profit derived from owning an apartment complex.

When an economist says a change in the market for land causes a farmer to use his land more intensively, he means that the farmer

An outward shift in the demand curve for land will

A sum of money received at a future date

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

The principle of marginal productivity

The rate of interest is the price at which money is borrowed and loaned.

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

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