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

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
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: A) higher rental payments will not bring forth a larger quantity of land. B) rent is not a cost to specific firms but it is a cost from the standpoint of the economy as a whole. C) rent does not allocate land in terms of productive efficiency. D) rent tends to allocate land into the most productive uses. Ans: A Econ: 527 LO: 27-1 Micro: 293 Topic: 1 Type: Definition 3. Which of the following statements is correct ? A) Economic profits can properly be regarded as the salaries received by the hired managers of
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
corporations. B) Economic rent is a price paid for productive resources whose supply is perfectly inelastic. C) Economic profits would be nonexistent in a dynamic, purely competitive economy. D) Economic or pure profit is the minimum return which entrepreneurs must receive to continue in a particular line of production. Ans: B 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: A) are fixed in total supply. C) vary directly with their market prices. B) vary inversely with their market prices. D) are available in nearly unlimited quantities. Ans: A 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:
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/03/2010 for the course ECON E103 taught by Professor Johnson during the Spring '08 term at Indiana University South Bend.

Page1 / 19

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

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online