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Ch015TestBank - CHAPTER 27 Rent Interest and Profit Topic 1...

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CHAPTER 27 Rent, Interest, and Profit Topic Question numbers ___________________________________________________________________________________________________ 1. Economic rent 1-21 2. Land taxation 22-27 3. Interest rate concept 28-33 4. Loanable funds theory of interest 34-47 5. Structure and impact of interest rates 48-56 6. Nominal and real interest rates 57-64 7. Usury laws 65-69 8. Profit 70-79 9. Income shares 80-86 Consider This 87-88 Last Word 89-92 True-False 93-103 ___________________________________________________________________________________________________ Multiple Choice Questions Economic rent Econ: 527 LO: 27-1 Micro: 293 Topic: 1 Type: Definition 1. Economic or pure rent is: A) a payment made for the use of housing, factory buildings, or capital goods. B) a payment for resources used in the production of "free goods." C) a payment for the use of those resources whose supply is perfectly elastic. D) the price paid for the use of land and other nonreproducible resources. Ans: D Econ: 527 LO: 27-1 Micro: 293 Topic: 1 Type: Application of Concept 2. To say that land rent performs no incentive function means that: Econ: 527 LO: 27-1 Micro: 293 Topic: 1 Type: Definition 3. Which of the following statements is correct ?
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Econ: 527 LO: 27-1 Micro: 293 Topic: 1 Type: Definition 4. Economic rent refers to the price paid for land and other natural resources that: Use the following to answer questions 5-6: Econ: 527 LO: 27-1 Micro: 293 Topic: 1 Type: Graphical 5. Refer to the above diagram. Land: A) will cease to be used in production if demand falls below D 4 . B) would be a free resource if demand is D 4 or less. C) would be an economic (scarce) resource in the case of all four demand curves. D) would be a free resource in the case of all four demand curves. Ans: B Econ: 527 LO: 27-1 Micro: 293 Topic: 1 Type: Graphical
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