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Chapter18 - Chapter18 MULTIPLECHOICE 1 a capital b...

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Chapter 18 The Markets for the Factors of Production M ULTIPLE  C HOICE 1. Which of the following best describes the economy’s stock of equipment and structures? a. capital b. aggregate demand c. long-term inventory d. aggregate stock ANSWER: a. capital TYPE: M DIFFICULTY: 1 SECTION: 18.1 2. Rent, interest, and profit are all forms of income paid to the owners of 3. The factors of production are best defined as the 4. For a computer software firm, capital could be thought of as (i) the firm’s computer programmers. (ii) the wages the firm pays to its computer programmers. (iii) computer equipment. 5. For a retail gasoline station, which of the following would qualify as capital? (i) the gas tanks and pumps (ii) the service attendants’ time (iii) the plot of land on which the station sits a. (i) only b. (iii) only c. (i) and (iii) d. (ii) and (iii) ANSWER: a. (i) only TYPE: M DIFFICULTY: 1 SECTION: 18.1 41
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42 Chapter 18/The Markets for the Factors of Production 6. Because a firm’s demand for a factor of production is derived from its decision to supply a good in the market, we call this type  of demand 7. Most of the total income earned in the U.S. economy is ultimately paid to households in the form of 8. In the United States economy, which of the following factors of production is considered to be the most important in terms of  the magnitude of income earned by that factor of production?
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