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File: Chapter 17 Rent, Interest, and Profit Multiple Choice [QUESTION] 1. If a factor of production has a fixed total supply, then payments to that factor constitute: A) Wages B) Economic rent C) Normal profits D) Interest payments Answer: B Topic: Economic Rent Difficulty: 2 Medium Learning Objective: 17-01 Blooms: Level 1 Remember AACSB: Analytic [QUESTION] 2. Which of the following resources is a free and non-reproducible gift of nature? A) Labor B) Entrepreneurship C) Capital D) Land Answer: D Topic: Economic Rent Difficulty: 1 Easy Learning Objective: 17-01 Blooms: Level 1 Remember AACSB: Analytic [QUESTION] 3. Pure economic rent is the price of a resource with a perfectly: A) Elastic demand schedule B) Elastic supply schedule C) Inelastic supply schedule D) Inelastic demand schedule Answer: C Topic: Economic Rent Difficulty: 2 Medium Learning Objective: 17-01 Blooms: Level 1 Remember AACSB: Analytic [QUESTION] 4. Which of the following factors does not cause changes in land rent? A) Demand for land B) Supply of land C) Prices of the products produced from the land D) Prices of other resources employed along with land Answer: B Topic: Economic Rent Difficulty: 2 Medium Learning Objective: 17-01 Blooms: Level 1 Remember AACSB: Analytic Reference: 17-5 Use the following to answer question 5: [QUESTION] 5. What line in the above graph would best represent the supply curve for land? A) 1 B) 2 C) 3 D) 4 Answer: B Topic: Economic Rent Difficulty: 1 Easy Learning Objective: 17-01 Blooms: Level 3 Apply AACSB: Analytic Refer To: 17-5 Reference: 17-6 Use the following to answer questions 6-8: Use the following demand schedule and possible supply schedules, A-D, to answer the next question(s). [QUESTION] 6. Refer to the above schedules. There would be no incentive function performed by price in which of the given resource supply schedules? A) A B) B C) C D) D Answer: C Topic: Economic Rent Difficulty: 1 Easy Learning Objective: 17-01 Blooms: Level 3 Apply AACSB: Analytic Refer To: 17-6 [QUESTION] 7. Refer to the above schedules. Suppose that price influences the availability of the economic resource, and the equilibrium price is $2. Which resource supply schedule would apply in this case? A) A B) B C) C D) D Answer: D Topic: Economic Rent Difficulty: 1 Easy Learning Objective: 17-01 Blooms: Level 3 Apply AACSB: Analytic Refer To: 17-6 [QUESTION] 8. Refer to the above schedules. Suppose that the supply of a resource is given by the schedule that exhibits a zero price elasticity. If demand for the resource increases from the original demand schedule by 20 units at each price, then the equilibrium economic rent would be: A) $4 B) $3 C) $2 D) $1 Answer: A Topic: Economic Rent Difficulty: 3 Hard Learning Objective: 17-01 Blooms: Level 3 Apply AACSB: Analytic Refer To: 17-6 [QUESTION] 9. Which of the following does not explain differences in rent for different parcels of land?... View Full Document

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