Question 1

Why is the supply of loanable funds often interest inelastic?

Accepted Answer

The supply is often interest inelastic b

Question 2

The demand curve for a factor is that part of the MRP where marginal product is

Accepted Answer

A) rising. 
B) falling. 
C) positive. 
D) negative. 
A) rising. 
B) falling. 
C) positive. 
D) negative.

Question 3

The supply curve for funds

Accepted Answer

A) is generally positively sloped. 
B) depends upon people's savings plans. 
C) is a function of the interest rate. 
D) All of the above are correct. 
A) is generally positively sloped. 
B) depends upon people's savings plans. 
C) is a function of the interest rate. 
D) All of the above are correct.

Question 4

The equilibrium rent for marginal land

Accepted Answer

A) equals zero. 
B) depends on the supply and demand of land. 
C) exceeds the opportunity cost of the land. 
D) is always greater than the equilibrium rent for nonmarginal land. 
A) equals zero. 
B) depends on the supply and demand of land. 
C) exceeds the opportunity cost of the land. 
D) is always greater than the equilibrium rent for nonmarginal land.

Question 5

In the United States, the money for loans to businesses comes mainly from

Accepted Answer

A) corporate profits. 
B) the federal government. 
C) savings held in lending institutions. 
D) state and local governments. 
A) corporate profits. 
B) the federal government. 
C) savings held in lending institutions. 
D) state and local governments.

Question 6

The theory of land rent holds that

Accepted Answer

A) all plots of land are identical. 
B) all land yields a positive rent return. 
C) rent on any piece of land will equal the difference between the cost of producing the output on that land and the cost of producing it on marginal land. 
D) competition for superior plots of land will force the rent on those lands to a marginal return of zero. 
A) all plots of land are identical. 
B) all land yields a positive rent return. 
C) rent on any piece of land will equal the difference between the cost of producing the output on that land and the cost of producing it on marginal land. 
D) competition for superior plots of land will force the rent on those lands to a marginal return of zero.

Question 7

Suppose that 19th-century politicians had succeeded in their attempt to impose a "single tax"-a tax on suppliers of land (i.e., landlords).Most of the economic burden of the tax would have been borne by

Accepted Answer

A) renters, because the demand for land is generally less elastic than its supply. 
B) renters, because the demand for land is generally more elastic than its supply. 
C) landlords, because the demand for land is generally less elastic than its supply. 
D) landlords, because the demand for land is generally more elastic than its supply. 
A) renters, because the demand for land is generally less elastic than its supply. 
B) renters, because the demand for land is generally more elastic than its supply. 
C) landlords, because the demand for land is generally less elastic than its supply. 
D) landlords, because the demand for land is generally more elastic than its supply.

Question 8

Usury laws tend to hurt whom?

Accepted Answer

A) suppliers of loans 
B) consumers who cannot get credit 
C) bank stockholders 
D) All of the above are correct. 
A) suppliers of loans 
B) consumers who cannot get credit 
C) bank stockholders 
D) All of the above are correct.

Question 9

In 1862, the Homestead Act made land available to farmers at zero cost.Yet many farmers preferred to purchase land along the rail line from the railroad.The farmers

Accepted Answer

A) were duped by the railroads. 
B) knew the soil was better near the railroads. 
C) realized that crops would be less costly to grow and transport on land near the railroads. 
D) were exploited by the railroads. 
A) were duped by the railroads. 
B) knew the soil was better near the railroads. 
C) realized that crops would be less costly to grow and transport on land near the railroads. 
D) were exploited by the railroads.

Question 10

When the interest rate is higher, the difference between the value of money today and tomorrow is smaller.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

When determination of rent is left to the market,

Accepted Answer

A) that rent price is almost entirely determined by the supply side. 
B) that price can settle at politically unpopular levels. 
C) land is fairly distributed among the members of society. 
D) the supply of land will be perfectly elastic. 
A) that rent price is almost entirely determined by the supply side. 
B) that price can settle at politically unpopular levels. 
C) land is fairly distributed among the members of society. 
D) the supply of land will be perfectly elastic.

Question 13

The demand for capital is

Accepted Answer

A) directly related to the interest rate. 
B) inversely related to the interest rate. 
C) unrelated to the interest rate. 
D) first falls, and then rises, in relation to the interest rate. 
A) directly related to the interest rate. 
B) inversely related to the interest rate. 
C) unrelated to the interest rate. 
D) first falls, and then rises, in relation to the interest rate.

Question 14

Discounting is the process of

Accepted Answer

A) cutting prices to get rid of surplus stocks. 
B) finding the present value of future dollars. 
C) finding the future value of present dollars. 
D) giving special concessions to special customers. 
A) cutting prices to get rid of surplus stocks. 
B) finding the present value of future dollars. 
C) finding the future value of present dollars. 
D) giving special concessions to special customers.

Question 15

A landlord will supply her land for rental only if in equilibrium

Accepted Answer

A) she receives economic rent on the land. 
B) she is paid at least the opportunity cost of using the land herself. 
C) her land is marginal. 
D) her rate of return on her investment in the land is zero. 
A) she receives economic rent on the land. 
B) she is paid at least the opportunity cost of using the land herself. 
C) her land is marginal. 
D) her rate of return on her investment in the land is zero.

Question 16

Which of the following is usually a durable good?

Accepted Answer

A) a unit of labor 
B) the interest rate 
C) a depletable resource 
D) a capital good 
A) a unit of labor 
B) the interest rate 
C) a depletable resource 
D) a capital good

Question 17

Innovation is the act of putting an invention to practical use.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following best describes the concept of "derived demand?
"

Accepted Answer

A) The price of corn land determines the price of corn. 
B) The price of corn land has nothing to do with the price of corn. 
C) The price of corn determines the price of the land on which corn is grown. 
D) Cheap labor means cheap corn. 
A) The price of corn land determines the price of corn. 
B) The price of corn land has nothing to do with the price of corn. 
C) The price of corn determines the price of the land on which corn is grown. 
D) Cheap labor means cheap corn.

Question 19

A "single tax" on land was proposed in the nineteenth century by

Accepted Answer

A) Lloyd George. 
B) Henry George. 
C) George Washington. 
D) George Sands. 
A) Lloyd George. 
B) Henry George. 
C) George Washington. 
D) George Sands.

Question 20

Marginal land is on the borderline of being used in production.

Accepted Answer

A) True 
 B)False

Exam 18: Pricing the Factors of Production

Why is the supply of loanable funds often interest inelastic?

The demand curve for a factor is that part of the MRP where marginal product is

The supply curve for funds

The equilibrium rent for marginal land

In the United States, the money for loans to businesses comes mainly from

The theory of land rent holds that

Suppose that 19th-century politicians had succeeded in their attempt to impose a "single tax"-a tax on suppliers of land (i.e., landlords).Most of the economic burden of the tax would have been borne by

Usury laws tend to hurt whom?

In 1862, the Homestead Act made land available to farmers at zero cost.Yet many farmers preferred to purchase land along the rail line from the railroad.The farmers

When the interest rate is higher, the difference between the value of money today and tomorrow is smaller.

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

When determination of rent is left to the market,

The demand for capital is

Discounting is the process of

A landlord will supply her land for rental only if in equilibrium

Which of the following is usually a durable good?

Innovation is the act of putting an invention to practical use.

Which of the following best describes the concept of "derived demand? "

A "single tax" on land was proposed in the nineteenth century by

Marginal land is on the borderline of being used in production.

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

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