Econ 202 Quiz 6 Ch.22 - EEEEEEEEEU Review: DuizfijfihEE [...

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Unformatted text preview: EEEEEEEEEU Review: DuizfijfihEE [ D I 22.1Exeroise3 @Queaflon 5mm: 1 of 1 pt Test Score: moss (in of it: puts} El TWith respect to the allocation of resources, which statement is true about economic rent? Economic rent is not related to the allocation ofresources. It is hard to determine whether resources are being allocated ef‘fimentl}r since salaries are so high. Economic rent leads to meff'xziencies. Economic rent allocates resources to their highest—valued use. Question is complete. I I. TextProblem22—1 ICJ3IQuestlon mm: 1 of 1 pt Test 500m: 100% (JD of 1D pts) FE Which ofthe following would you expect to have a high level ofeconomic rent, and which would you expect to have a low A level ofeconomic rent and why would you expect this? Bob has a highly specialized medical skill that is in great demand. His level ofeconomic rent would be high because: the supply curve for the factor is perfectly elastic specific resources can be replicated exactly. V highly specialized means there are few substitutes, supply is inelastic, and the skill is in great demand. All of the above. Sally has never attended school She is 25 years old and is an intemationally known supermodeL Her level of economic rent would be high because: she would likely be willing to work for less. the supply curve for the factor is perfectly elast'u: her specify: resources can be replicated easily. N!" None of the above. Tim is a high schoolteacher and sells insurance part time. His level ofeconomic rent would be ktw because: the supply curve for a factor is perfectly inelasti: he would be wflling to work for less. V his wage is likely close to his opportunity cost. Question is complete. 6') '\ Tmpromemm (JEQueatlon Emcee: 1 of .1 pt Test 5:0": 100% {10 of 10 pts} FED After graduation, you face a choice. One option is to work for a Jmtltinationalconsulting firmand earn a starting salary {benefits included} of $30,000. The other option is to use $4,000 in savings to start your own consulting firm. You could earn an interest return of 6 percent on your savings. You choose to start your own consulting fll'l'fl. At the end ofthe first year, you add up all of your expenses and revenues. Your total includes $10,000 in rent, $850 in office supplies, $20,000 for office staff, and $5,000 in telephone expenses. Explicit costs include all costs for which direct payments are made: Rent {$10,000}, office supplies {$850}, staff salaries {$20,000}, and telephone {$5,000}L = $ 35850 . implicit costs include opportunity costs: foregone wages {$30,000}, and foregone interest payments {$4,000 >4 6%} = $ 30140 . Suppose, that you have now operated your consulting firm for a year. At the end of the first year, your total revenues are $92,000. Your accounting profit is $ 56150 . Your economic profit is $ 25910. K Question is complete. (E) -- TextF‘roblemEE-fi {JGQIIBBtlfl-rl Scorn: 1 of 1 pt Tea-15mm: 100% [10 of 10 pts} El A business organization that is owned by many is a proprietorship. Business organizations that help reduce the cost ofmonitoring job performance are proprietorships only. are partnerships only. are corporations. V are proprietorships and partnerships. Corporations are subject to double taxation , hrnt sole proprietorships and partnerships do not face double taxation. Question is complete. (i) .— 22.1Exercise4 @QHeaflun 5mm: 1 of 1 pt Tea-15mm: 1DD%[1D of 10 pts} El Whydn some sports figures get economic rent'?I V Their special talents cannot be replicated exactly. Because of the way accmmting profits are calculated. The present value calculation determines the person‘s salary. The legal forms afbusiness dictate that this happen. Question is complete. ® I. TextF’roblemEE-‘lfl @Quoaflnn Score: 1 of 1 pt Too-15mm: 100%[10 of 10 pts} FE Income ofa partnership is taxed onlyonce as personal incomeI while the dividend paid out h},r a corporation is tax free to everyone involved. U' subject to double taxation: once as corporate profit and once as income of shareholders. subject to corporate profit tax only. subject to income tax only. Question is complete. (if) I 22.1Exercise‘1 @Quoatlon 5mm: 1of1 pt Taatmm: mm (1:: of 10 [313} ED Economic rent is referring to the profits of a firm. II" the ammtpoid foraresouree overandabove its oppornmityoost. the payment to land only. the ammt that must be paid to secure housing. Question is complete. I I. Tr-‘s-ctF’roblemEli-l7.r 'CE'QH’N“ 5m”: 1 ‘1'“ 1 Pt TostSmre: mass [m of 1:: pts} El Though he has retired as a professional football receiver, Jerry Rice stfll earns a sizeable annual income from endorsements. His economic rent is so high because he is a successful coach in the National Football League. football fans tend to spend a substantial amount of money on sports memorabflia. V' there is stilla high demand for his star appeaL people do not like NFL players. Question is complete. If?) I I. 22.1Exercise2 @Quaatlnn 5mm: 1 of 1 pt Tea! 5mm: 100% (10 of 10 pts} E Assume that the s11]:I]:Il}r ofland is perfectly inelastic as shown 3| inthe diagram The demand for landhas shifted frole to D2. What is the total value for economic rent after the change in demand? P2 Price "U M {1* Que mm; per week Question is complete. {i} I. 22.2Exercise‘1 @Quaaflon 5mm: 1 of 1 pt Test Score: mas-a (ID of in: p13} El All of the folbawing are advantages afpmprietorships except: 9' unlimiled liability taxes duly paid (nice easy to form easy to dissolve Question is complete. ...
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This note was uploaded on 02/09/2011 for the course ECON 202 taught by Professor - during the Fall '08 term at Community College of Baltimore County.

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Econ 202 Quiz 6 Ch.22 - EEEEEEEEEU Review: DuizfijfihEE [...

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