MBF_GE_Micro_TBII_Ch17 - File: Chapter 17 Rent, Interest,...

MBF_GE_Micro_TBII_Ch17
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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 Bloom’s: 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 Bloom’s: 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 Bloom’s: Level 1 Remember AACSB: Analytic [QUESTION] 4. Which of the following factors does not cause changes in land rent?
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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 Bloom’s: 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 Bloom’s: 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).
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[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 Bloom’s: 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 Bloom’s: 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
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D) $1 Answer: A Topic: Economic Rent Difficulty: 3 Hard Learning Objective: 17-01 Bloom’s: 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? A) Productivity differences
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