Question 1

Economic rent refers to the price paid for land and other natural resources that

Accepted Answer

A)   are fixed in total supply.
B)   vary directly with their market prices.
C)   vary inversely with their market prices.
D)   are available in nearly unlimited quantities.E) None of the above
F) A) and D)

Question 2

Economic profits are the entrepreneur's reward for taking on the insurable risks of running a business.

Accepted Answer

A) True 
 B)False

Question 3

Economic profit might result from

Accepted Answer

A)   easy entry into industries.
B)   dynamic change and uncertainty.
C)   X-inefficiency.
D)   a decline in entrepreneurship.E) All of the above
F) A) and B)

Question 4

Which of the following is correct?

Accepted Answer

A)   Although land has no production cost from society's viewpoint, rental payments are costs to individual producers.
B)   Land rent is not a cost to either society or individual producers.
C)   Although land rent is a cost from society's viewpoint, it is not a cost to individual producers.
D)   Land rent is a cost to both society and individual producers.E) A) and B)
F) B) and C)

Question 5

For a given future value and interest rate, the discounted present value will become larger as the time period gets longer.

Accepted Answer

A) True 
 B)False

Question 6

The amount to which some current amount of money will grow as interest compounds over time is known as

Accepted Answer

A)   the future value of that sum of money.
B)   the present value of that sum of money.
C)   compound interest.
D)   the time-value of money.E) B) and C)
F) None of the above

Question 7

Suppose that in some year nominal interest rates are less than the rate of inflation. This means that

Accepted Answer

A)   money demand exceeds money supply.
B)   real interest rates are negative.
C)   real interest rates are positive and unusually high.
D)   real interest rates exceed nominal interest rates.E) A) and D)
F) B) and C)

Question 8

To say that land rent performs no incentive function means that

Accepted Answer

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.E) C) and D)
F) B) and D)

Question 9

The demand side, not supply, is the major factor determining how high land's rent will be.

Accepted Answer

A) True 
 B)False

Question 10

Economic profits are not payments received for

Accepted Answer

A)   taking uninsurable risks in a firm.
B)   making products or production innovations.
C)   starting up a business.
D)   working for someone else.E) None of the above
F) B) and D)

Exam 18: Rent, Interest, and Profit

Economic rent refers to the price paid for land and other natural resources that

Correct Answer
verified

The demand side, not supply, is the major factor determining how high land's rent will be.

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

For a given future value and interest rate, the discounted present value will become larger as the time period gets longer.

Correct Answer
verified

To say that land rent performs no incentive function means that

Correct Answer
verified

The amount to which some current amount of money will grow as interest compounds over time is known as

Correct Answer
verified

Economic profits are not payments received for

Correct Answer
verified

Economic profits are the entrepreneur's reward for taking on the insurable risks of running a business.

Correct Answer
verified

Economic profit might result from

Correct Answer
verified

Suppose that in some year nominal interest rates are less than the rate of inflation. This means that

Correct Answer
verified

Exam 18: Rent, Interest, and Profit

Economic rent refers to the price paid for land and other natural resources that

Correct AnswerverifiedShow Answer

The demand side, not supply, is the major factor determining how high land's rent will be.

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

For a given future value and interest rate, the discounted present value will become larger as the time period gets longer.

Correct AnswerverifiedShow Answer

To say that land rent performs no incentive function means that

Correct AnswerverifiedShow Answer

The amount to which some current amount of money will grow as interest compounds over time is known as

Correct AnswerverifiedShow Answer

Economic profits are not payments received for

Correct AnswerverifiedShow Answer

Economic profits are the entrepreneur's reward for taking on the insurable risks of running a business.

Correct AnswerverifiedShow Answer

Economic profit might result from

Correct AnswerverifiedShow Answer

Suppose that in some year nominal interest rates are less than the rate of inflation. This means that

Correct AnswerverifiedShow Answer

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