Question 1

Which of the following is true of earnings from land?

Accepted Answer

A) An increase in economic rent leads to an increase in the supply of land. 
B) A decrease in transfer earnings from land leads to an increase in its demand. 
C) An increase in economic rent does not lead to an increase in the supply of land. 
D) A decrease in transfer earnings from land leads to a decrease in its supply. 
E) An increase in economic rent raises the elasticity of supply of land. 
A) An increase in economic rent leads to an increase in the supply of land. 
B) A decrease in transfer earnings from land leads to an increase in its demand. 
C) An increase in economic rent does not lead to an increase in the supply of land. 
D) A decrease in transfer earnings from land leads to a decrease in its supply. 
E) An increase in economic rent raises the elasticity of supply of land.

Question 2

Which of the following actions can be categorized as rent seeking?

Accepted Answer

A) Increase in the income tax rates by the government 
B) Lobbying efforts of individuals or groups to gain favors from the government 
C) Profit maximizing firms charging a price greater than their marginal costs 
D) Export of goods from developing to developed countries 
E) Government intervention in the real estate market 
A) Increase in the income tax rates by the government 
B) Lobbying efforts of individuals or groups to gain favors from the government 
C) Profit maximizing firms charging a price greater than their marginal costs 
D) Export of goods from developing to developed countries 
E) Government intervention in the real estate market

Question 3

If corporate firms start offering higher dividends on their stock, the price of the exhaustible resource tends to fall in the current period.

Accepted Answer

A) True 
 B)False

Question 4

The supply curve of land in the market for uses of land is:

Accepted Answer

A) perfectly inelastic. 
B) nonexistent. 
C) perfectly elastic. 
D) positively sloped. 
E) negatively sloped. 
A) perfectly inelastic. 
B) nonexistent. 
C) perfectly elastic. 
D) positively sloped. 
E) negatively sloped.

Question 5

Lack of well-defined ____ may cause market failures.

Accepted Answer

A) fiscal policies 
B) public transportation systems 
C) private property rights 
D) interest rates 
E) monetary policies 
A) fiscal policies 
B) public transportation systems 
C) private property rights 
D) interest rates 
E) monetary policies

Question 6

The figure given below represents an imperfectly competitive resource market.Here common land (and not land used for specific purpose)is under consideration. Figure 31.1   In Figure 31.1, the curve A indicates:

Accepted Answer

A) demand curve for land. 
B) supply curve of land. 
C) marginal factor cost of land. 
D) marginal revenue product curve for land. 
E) value of marginal product curve of land. 
A) demand curve for land. 
B) supply curve of land. 
C) marginal factor cost of land. 
D) marginal revenue product curve for land. 
E) value of marginal product curve of land.

Question 7

The people of Andres, a small fishing village in a country, are facing extremely difficult times as their source of livelihood is threatened.Unregulated by the government, the coastline was subject to overfishing for a long time, adversely affecting the stock of fish.The variety of fish has declined and it takes much longer to haul in a decent catch these days.People in Andres are worried that they may have to migrate to other areas or look for alternative sources to earn a living.Which of the following is most similar to this scenario?

Accepted Answer

A) Oil producers hoard the extracted oil to increase prices. 
B) Public highways get congested because they are nonexclusive. 
C) Poaching of the Javan rhino for its priced horns in unprotected forest belts of Indonesia has led to its near extinction. 
D) People in Jinbong village now have to pay to be able to fish in the local pond. 
E) A farmer shifts from potato to corn cultivation because the latter offers more profits. 
A) Oil producers hoard the extracted oil to increase prices. 
B) Public highways get congested because they are nonexclusive. 
C) Poaching of the Javan rhino for its priced horns in unprotected forest belts of Indonesia has led to its near extinction. 
D) People in Jinbong village now have to pay to be able to fish in the local pond. 
E) A farmer shifts from potato to corn cultivation because the latter offers more profits.

Question 8

If coal is extracted in an unsustainable manner in the current period, the price for steel is likely to increase in future.

Accepted Answer

A) True 
 B)False

Question 9

The market's role is to ensure that nonrenewable resources are allocated across time to where they are most highly valued.This implies, if more is used today:

Accepted Answer

A) the future supply curve shifts downward. 
B) financial investments offer a lower rate of return. 
C) the return on saving the resource for future use rises. 
D) the expected demand for the resource in the future is low. 
E) technological advancement will guarantee a steady future supply. 
A) the future supply curve shifts downward. 
B) financial investments offer a lower rate of return. 
C) the return on saving the resource for future use rises. 
D) the expected demand for the resource in the future is low. 
E) technological advancement will guarantee a steady future supply.

Question 10

Anything that affects the marginal revenue product of a nonrenewable resource will affect the demand for that resource.

Accepted Answer

A) True 
 B)False

Question 11

As extraction of a nonrenewable resource increases, the supply curve shifts up because:

Accepted Answer

A) more substitutes become available. 
B) competition among the existing suppliers intensifies. 
C) the marginal cost of extracting any given amount increases. 
D) the resource finds alternative usage. 
E) the resource becomes less productive. 
A) more substitutes become available. 
B) competition among the existing suppliers intensifies. 
C) the marginal cost of extracting any given amount increases. 
D) the resource finds alternative usage. 
E) the resource becomes less productive.

Question 12

The category of resources economists call "land" refers to all of the following, except:

Accepted Answer

A) nonrenewable natural resources. 
B) renewable natural resources. 
C) oceans. 
D) minerals. 
E) buildings. 
A) nonrenewable natural resources. 
B) renewable natural resources. 
C) oceans. 
D) minerals. 
E) buildings.

Question 13

For resources with upward-sloping supply curves:

Accepted Answer

A) earnings consist solely of economic rent. 
B) earnings consist of both transfer earnings and economic rent. 
C) earnings are called transfer earnings. 
D) earnings are called dividends. 
E) earnings consist entirely of in-kind transfers. 
A) earnings consist solely of economic rent. 
B) earnings consist of both transfer earnings and economic rent. 
C) earnings are called transfer earnings. 
D) earnings are called dividends. 
E) earnings consist entirely of in-kind transfers.

Question 14

In the market for land as a resource, the demand curve is elastic while the supply curve is perfectly inelastic.Identify the underlying assumption.

Accepted Answer

A) There are limited ways in which land can be used as a resource. 
B) Land as an input has large number of substitutes. 
C) There is a fixed supply of land. 
D) Land includes all immovable assets. 
E) Land looses productivity over time. 
A) There are limited ways in which land can be used as a resource. 
B) Land as an input has large number of substitutes. 
C) There is a fixed supply of land. 
D) Land includes all immovable assets. 
E) Land looses productivity over time.

Question 15

Lobbying efforts by individuals and firms:

Accepted Answer

A) increase productive activities in the economy. 
B) merely transfer income and wealth from one individual or group to another. 
C) enable the firms to experience economies of scale. 
D) improves the overall standard of living in the economy. 
E) helps the economy to produce the efficient level of output. 
A) increase productive activities in the economy. 
B) merely transfer income and wealth from one individual or group to another. 
C) enable the firms to experience economies of scale. 
D) improves the overall standard of living in the economy. 
E) helps the economy to produce the efficient level of output.

Exam 52: The Land Market and Natural Resources

Which of the following is true of earnings from land?

Which of the following actions can be categorized as rent seeking?

If corporate firms start offering higher dividends on their stock, the price of the exhaustible resource tends to fall in the current period.

The supply curve of land in the market for uses of land is:

Lack of well-defined ____ may cause market failures.

The figure given below represents an imperfectly competitive resource market.Here common land (and not land used for specific purpose)is under consideration. Figure 31.1 In Figure 31.1, the curve A indicates:

If coal is extracted in an unsustainable manner in the current period, the price for steel is likely to increase in future.

The market's role is to ensure that nonrenewable resources are allocated across time to where they are most highly valued.This implies, if more is used today:

Anything that affects the marginal revenue product of a nonrenewable resource will affect the demand for that resource.

As extraction of a nonrenewable resource increases, the supply curve shifts up because:

The category of resources economists call "land" refers to all of the following, except:

For resources with upward-sloping supply curves:

In the market for land as a resource, the demand curve is elastic while the supply curve is perfectly inelastic.Identify the underlying assumption.

Lobbying efforts by individuals and firms:

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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