Question 1

In a free market for rental housing, effective rent control would have which effect?

Accepted Answer

A)  It would cause a reduction in the number of apartments.
B)  It would cause an increase in the number of apartments, since landlords would try to increase their profits through larger scale.
C)  It would have no effect on the number of apartments offered in the market.
D)  The results are impossible to predict.E) A) and B)
F) A) and C)

Question 2

Suppose that one could determine the amount of income that is pure economic rent.If a law were passed which taxed 50 percent of that rent, what would happen to the amount of work that people perform?

Accepted Answer

A)  It would increase as people seek higher income.
B)  It would be unchanged.
C)  It would decrease as people suffer a loss of income.
D)  It would increase for some and decrease for others.E) A) and B)
F) All of the above

Question 3

If savers do not have fixed savings goals, the supply curve of loanable funds will generally be

Accepted Answer

A)  horizontal.
B)  downward sloping.
C)  vertical.
D)  upward sloping.E) A) and B)
F) B) and C)

Question 4

Which of the following is not a loan of funds?

Accepted Answer

A)  home mortgage
B)  government bond
C)  corporate stock
D)  corporate bondE) C) and D)
F) B) and D)

Question 5

Innovation is the act of generating an idea for a new product.

Accepted Answer

A) True 
 B)False

Question 6

A sum of money to be received in the future is worth more than a sum of money today.

Accepted Answer

A) True 
 B)False

Question 7

One major fault with factor pricing analysis is that marginal productivity theory merely attempts to justify the income distribution that the capitalist system yields.

Accepted Answer

A) True 
 B)False

Question 8

The economic rent analysis does not apply to any factor

Accepted Answer

A)  except land.
B)  whose supply curve is vertical.
C)  whose supply curve is horizontal.
D)  whose quantity supplied is fixed.E) B) and D)
F) B) and C)

Question 9

Entrepreneurship is

Accepted Answer

A)  restricted to perfect competition.
B)  occurs only in well-functioning markets.
C)  the process of planting new crops.
D)  the process of taking business risks.E) A) and B)
F) A) and C)

Question 10

The marginal productivity principle has some relevance to organizing production in a socialist society.

Accepted Answer

A) True 
 B)False

Question 11

The functioning of a market economy is very dependent upon investment for provision of capital and future growth.Describe the process of investment and employment of the created capital in production.

Accepted Answer

The text lists five steps: (1) decision ...

Question 12

The theory of factor pricing uses supply-demand analysis.

Accepted Answer

A) True 
 B)False

Question 13

The marginal productivity theory of distribution has been criticized because

Accepted Answer

A)  it assumes that the existing distribution of ownership factors is fair and just when it may not be.
B)  it does not tell us much about real policy matters.
C)  a factor's MRP does not in any way correspond to productive effort.
D)  All of the above are correct.E) B) and C)
F) B) and D)

Question 14

Invention is the act of generating a new idea.

Accepted Answer

A) True 
 B)False

Question 15

Interest is the payment for the use of funds.

Accepted Answer

A) True 
 B)False

Question 16

What are the factors that contribute to productivity growth in the market economy and which of them is considered most important?

Accepted Answer

There are three oft-cited factors that c...

Question 17

Define the following terms and explain their importance to the study of economics.
a.principle of marginal productivity
b.marginal physical product
c.marginal revenue product
d.derived demand
e.economic rent

Accepted Answer

a.The marginal productivity principle st...

Question 18

Figure 19-2 
-The demand curve for the input in Figure 19-2 is

Accepted Answer

A)  ABCD.
B)  CDEF.
C)  BCDE.
D)  EF.E) A) and B)
F) None of the above

Question 19

Figure 19-1 
-Mr.Paque is a bear hunter for timber companies that want to diminish damage to trees done by bears in the spring.Due to a reduction in the bear population between 1995 and 2005, Mr.Paque finds fewer bears each year and additional hours spent hunting produce fewer additional bears.With the information given and noting that the bounty on bears has risen, one can conclude that (i)  Mr.Paque's income per hunting hours will fall; (ii)  the derived demand for Mr.Paque's services will shift left.

Accepted Answer

A)  i and ii
B)  i not ii
C)  ii not i
D)  neither i nor iiE) All of the above
F) B) and D)

Question 20

If the demand for land shifts upward, rents will be

Accepted Answer

A)  earned by some land that was formerly unprofitable.
B)  lost to many landowners.
C)  diminished for society as a whole.
D)  taxed away to help pay the costs of government.E) A) and B)
F) A) and C)

Exam 18: Pricing the Factors of Production

Define the following terms and explain their importance to the study of economics. a.principle of marginal productivity b.marginal physical product c.marginal revenue product d.derived demand e.economic rent

Correct Answer
verified
a.The marginal productivity principle st...
View Answer

Which of the following is not a loan of funds?

Correct Answer
verified

One major fault with factor pricing analysis is that marginal productivity theory merely attempts to justify the income distribution that the capitalist system yields.

Correct Answer
verified

Invention is the act of generating a new idea.

Correct Answer
verified

The economic rent analysis does not apply to any factor

Correct Answer
verified

What are the factors that contribute to productivity growth in the market economy and which of them is considered most important?

Correct Answer
verified
There are three oft-cited factors that c...
View Answer

In a free market for rental housing, effective rent control would have which effect?

Correct Answer
verified

A sum of money to be received in the future is worth more than a sum of money today.

Correct Answer
verified

Correct Answer
verified

If savers do not have fixed savings goals, the supply curve of loanable funds will generally be

Correct Answer
verified

Interest is the payment for the use of funds.

Correct Answer
verified

Entrepreneurship is

Correct Answer
verified

If the demand for land shifts upward, rents will be

Correct Answer
verified

Figure 19-2 -The demand curve for the input in Figure 19-2 is

Correct Answer
verified

The marginal productivity theory of distribution has been criticized because

Correct Answer
verified

The functioning of a market economy is very dependent upon investment for provision of capital and future growth.Describe the process of investment and employment of the created capital in production.

Correct Answer
verified
The text lists five steps: (1) decision ...
View Answer

The theory of factor pricing uses supply-demand analysis.

Correct Answer
verified

Innovation is the act of generating an idea for a new product.

Correct Answer
verified

Suppose that one could determine the amount of income that is pure economic rent.If a law were passed which taxed 50 percent of that rent, what would happen to the amount of work that people perform?

Correct Answer
verified

The marginal productivity principle has some relevance to organizing production in a socialist society.

Correct Answer
verified

Exam 18: Pricing the Factors of Production

Define the following terms and explain their importance to the study of economics. a.principle of marginal productivity b.marginal physical product c.marginal revenue product d.derived demand e.economic rent

Correct Answerverifieda.The marginal productivity principle st...View AnswerShow Answer

Which of the following is not a loan of funds?

Correct AnswerverifiedShow Answer

One major fault with factor pricing analysis is that marginal productivity theory merely attempts to justify the income distribution that the capitalist system yields.

Correct AnswerverifiedShow Answer

Invention is the act of generating a new idea.

Correct AnswerverifiedShow Answer

The economic rent analysis does not apply to any factor

Correct AnswerverifiedShow Answer

What are the factors that contribute to productivity growth in the market economy and which of them is considered most important?

Correct AnswerverifiedThere are three oft-cited factors that c...View AnswerShow Answer

In a free market for rental housing, effective rent control would have which effect?

Correct AnswerverifiedShow Answer

A sum of money to be received in the future is worth more than a sum of money today.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If savers do not have fixed savings goals, the supply curve of loanable funds will generally be

Correct AnswerverifiedShow Answer

Interest is the payment for the use of funds.

Correct AnswerverifiedShow Answer

Entrepreneurship is

Correct AnswerverifiedShow Answer

If the demand for land shifts upward, rents will be

Correct AnswerverifiedShow Answer

Figure 19-2 -The demand curve for the input in Figure 19-2 is

Correct AnswerverifiedShow Answer

The marginal productivity theory of distribution has been criticized because

Correct AnswerverifiedShow Answer

The functioning of a market economy is very dependent upon investment for provision of capital and future growth.Describe the process of investment and employment of the created capital in production.

Correct AnswerverifiedThe text lists five steps: (1) decision ...View AnswerShow Answer

The theory of factor pricing uses supply-demand analysis.

Correct AnswerverifiedShow Answer

Innovation is the act of generating an idea for a new product.

Correct AnswerverifiedShow Answer

Suppose that one could determine the amount of income that is pure economic rent.If a law were passed which taxed 50 percent of that rent, what would happen to the amount of work that people perform?

Correct AnswerverifiedShow Answer

The marginal productivity principle has some relevance to organizing production in a socialist society.

Correct AnswerverifiedShow Answer

Correct Answer
verified
a.The marginal productivity principle st...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
There are three oft-cited factors that c...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The text lists five steps: (1) decision ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified