Question 1

The main factor in determining how much one plot of land is worth relative to another plot is&#10;A)its fertility.&#10;B)the average amount of rainfall.&#10;C)its location.&#10;D)None of the choices are true.

Accepted Answer

The location of a plot of land is the main factor in determining its worth relative to another plot. Factors such as proximity to major cities or attractions, access to transportation and utilities, and zoning regulations all play a significant role in determining the value of a piece of land. Fertility and rainfall can be important factors for agricultural land, but they are not the main determining factors for all types of land.

Question 2

A higher rent ________ lead to an increase in the quantity of land supplied.&#10;A)will definitely&#10;B)will probably&#10;C)may&#10;D)will not

Accepted Answer

A higher rent is likely to result in landowners supplying more land to the market. However, this is not a definite outcome, as other factors such as availability of land, competition, and production costs may also play a role in determining the quantity of land supplied. Therefore, option D is the most appropriate choice.

Question 3

Who wanted to tax away all rent from landlords?&#10;A)David Ricardo&#10;B)Henry George&#10;C)Joseph Schumpeter&#10;D)Frank Knight

Accepted Answer

The person who wanted to tax away all rent from landlords was Henry George, who proposed a single tax on land value. He believed that the value of land came from the community around it and therefore, the community should benefit from that value through the tax. This concept became known as Georgism. David Ricardo did write about rent and its effect on economic activity, but he did not propose taxing it away entirely. Joseph Schumpeter and Frank Knight were economists who made significant contributions to the field, but they did not advocate for this specific policy proposal.

Question 4

Henry George advocated each of the following except that&#10;A)all land should be free.&#10;B)all rents should be taxed away.&#10;C)the government should raise all its tax revenue from a single tax on land.&#10;D)since land did not really belong to the landlords, rent was an unearned surplus.

Accepted Answer

Henry George did not advocate that all land should be free. He proposed that the government should tax away all rents from land to address inequality and improve economic efficiency, but he did not suggest making land free of ownership or cost.

Question 5

Which statement is true?&#10;A)Stores charge high prices because they have to pay high rents.&#10;B)A firm's demand for land is derived from a firm's MRP curve for land.&#10;C)The supply of land varies from year to year.&#10;D)None of the statements are true.

Accepted Answer

A firm's demand for land is derived from a firm's marginal revenue product (MRP) curve for land. The MRP shows how much revenue a firm can generate as it hires additional units of a factor of production, in this case land. Therefore, the demand for land is driven by the marginal revenue product of that land. The other statements are either inaccurate or too broad/general to be definitively true or false.

Question 6

Which statement is true?&#10;A)The supply of loanable funds is less elastic than the supply of land.&#10;B)The supply of loanable funds is more elastic than the supply of land.&#10;C)The supply of loanable funds is as elastic as the supply of land.

Accepted Answer

The supply of loanable funds is more elastic than the supply of land as financial institutions and investors can easily adjust the interest rates they charge or the returns they require on loans and investments, whereas the supply of land is limited and cannot be easily expanded or contracted.

Question 7

In general, a plot of land goes to&#10;A)whomever the government designates.&#10;B)the highest bidder.&#10;C)the person who can make the best use of it.

Accepted Answer

The answer of In general, a plot of land goes...

Question 8

&#34;Profits are a reward for risk-bearing&#34; would be a view held by&#10;A)Joseph Schumpeter.&#10;B)Frank Knight.&#10;C)Henry George.&#10;D)Karl Marx.

Accepted Answer

Frank Knight believed that profits are the reward for entrepreneurs who undertake the uncertainty and risk of uncertain markets. He argued that the uncertainty of the future is the source of profit, and that entrepreneurs who bear this risk deserve to be compensated for it.

Question 9

As the demand for land rises&#10;A)rents rise and more marginal land comes into use.&#10;B)rents fall and more marginal land comes into use.&#10;C)rents rise and more land becomes marginal.&#10;D)rents fall and more land becomes marginal.

Accepted Answer

When demand for land increases, the rents that landowners can charge for their land also increase because there is more competition among potential tenants. As a result, landowners may be willing to offer more marginal land for rent, knowing that the increased demand will increase the value of even lower-quality land. This means that more marginal land will be brought into use in response to the higher prices, leading to a shift in the supply curve to the right.

Question 10

The present value of a dollar received one year from now, given a current interest rate of 10%, is about&#10;A)$.90.&#10;B)$.91.&#10;C)$1.00.&#10;D)$1.09.&#10;E)$1.10.

Accepted Answer

Using the formula for present value: 
PV = FV / (1 + r)^n
where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods.

In this case, we have: 
PV = 1 / (1 + 0.10)^1 
PV = 1 / 1.10 
PV = 0.909

Rounding to two decimal places, we get PV = $0.91, which is answer choice B.

Question 11

__________ sees the entrepreneur as an exploiter of labor.&#10;A)Joseph Schumpeter&#10;B)Frank Knight&#10;C)Henry George&#10;D)Karl Marx

Accepted Answer

The answer of __________ sees the entrepreneur as an exploiter...

Question 12

Which statement is true?&#10;A)As rents rise more marginal land is used.&#10;B)As rents rise less marginal land is used.&#10;C)Land is basically free.We pay rent for the buildings that are situated on the land.&#10;D)None of the statements are true.

Accepted Answer

The answer of Which statement is true?&#10;A)As rents rise more...

Question 13

Increases in rent are generally due to&#10;A)rises in the supply of land.&#10;B)rises in the MRP of land.&#10;C)declines in the supply of land.&#10;D)declines in the MRP of land.

Accepted Answer

The answer of Increases in rent are generally due to&#10;A)rises...

Question 14

Which is not determined by supply and demand?&#10;A)The wage rate&#10;B)The interest rate&#10;C)Rent&#10;D)Profits

Accepted Answer

The answer of Which is not determined by supply and...

Question 15

The supply urban land&#10;A)is fixed.&#10;B)varies from time to time.&#10;C)rises with demand&#10;D)is higher in urban areas than in rural areas.

Accepted Answer

The answer of The supply urban land&#10;A)is fixed.&#10;B)varies from time...

Question 16

Henry George thought that&#10;A)landowners deserve the economic rent that their land holdings provide.&#10;B)a single tax on land equal to the unearned surplus that landowners receive would pay for all needed government.&#10;C)economic inefficiency would result from a tax on the unearned surplus that landowners receive annually.&#10;D)landowners bear most of the costs associated with economic growth.

Accepted Answer

The answer of Henry George thought that&#10;A)landowners deserve the economic...

Question 17

Profits are&#10;A)less than 10% of national income.&#10;B)a little more than 20% of national income.&#10;C)almost 50% of national income.&#10;D)over 60% of national income.

Accepted Answer

The answer of Profits are&#10;A)less than 10% of national income.&#10;B)a...

Question 18

A change in rent will be brought about by a change in&#10;A)the supply of land.&#10;B)the demand for land.&#10;C)both the supply of and the demand for land.&#10;D)neither the supply of nor the demand for land.

Accepted Answer

The answer of A change in rent will be brought...

Question 19

Economic rent is paid&#10;A)only to landlords.&#10;B)to resources which would be made available for lower payments.&#10;C)illegally.&#10;D)only in socialist economies.

Accepted Answer

The answer of Economic rent is paid&#10;A)only to landlords.&#10;B)to resources...

Question 20

In economics we say the amount of land is&#10;A)fixed.&#10;B)variable.&#10;C)both fixed and variable.&#10;D)neither fixed nor variable.

Accepted Answer

The answer of In economics we say the amount of...

Question 21

The marginal revenue product schedule for land refers to&#10;A)a firm's demand for land.&#10;B)the final demand for land.&#10;C)the firm's supply of land.&#10;D)the marginal physical product schedule for land.

Accepted Answer

The answer of The marginal revenue product schedule for land...

Question 22

Who said this? &#34;Who is entitled to the rent of land? The producer of the land without doubt. Who made the land? God. Then, proprietor, retire!&#34;&#10;A)David Ricardo&#10;B)Henry George&#10;C)Pierre Joseph Proudhon&#10;D)Joseph Schumpeter&#10;E)Frank Knight

Accepted Answer

The answer of Who said this? &#34;Who is entitled to...

Question 23

Which statement is true?&#10;A)Rent, but not the interest rate is determined by supply and demand.&#10;B)The interest rate, but not rent, is determined by supply and demand.&#10;C)Both rent and the interest rate are determined by supply and demand.&#10;D)Neither rent nor the interest rate is determined by supply and demand.

Accepted Answer

The answer of Which statement is true?&#10;A)Rent, but not the...

Question 24

The present value of $100 received 3 years from now given a current interest rate of 6% is&#10;A)$82.00.&#10;B)$83.96.&#10;C)$100.00.&#10;D)$116.00.&#10;E)$118.00.

Accepted Answer

The answer of The present value of $100 received 3...

Question 25

A shortage of competition is central to the entrepreneur in the ________ theory of profit.&#10;A)risk taker&#10;B)innovator&#10;C)monopolist&#10;D)exploiter of labor

Accepted Answer

The answer of A shortage of competition is central to...

Question 26

In general the present value of $1,000 received in the future will&#10;A)be independent of the market rate of interest.&#10;B)be lower, the higher the market rate of interest.&#10;C)be lower, the lower the market rate of interest.&#10;D)worth the same whether received one year from today or two years from today.

Accepted Answer

The answer of In general the present value of $1,000...

Question 27

The present value of $1000 received 2 years from now given the current rate of interest&#10;A)is less than the present value of $1000 received 1 year from now.&#10;B)is the same as $1000 received 3 years from today.&#10;C)is the same as $1000 received 1 year from today.&#10;D)is less than $1000 received 3 years from today.

Accepted Answer

The answer of The present value of $1000 received 2...

Question 28

Which statement is true?&#10;A)Rent and wages, but not interest, are determined by supply and demand.&#10;B)Wages and interest, but not rent, are determined by supply and demand.&#10;C)Rent and interest, but not wages, are determined by supply and demand.&#10;D)Rent, interest, and wages are determined by supply and demand.

Accepted Answer

The answer of Which statement is true?&#10;A)Rent and wages, but...

Question 29

Economic rents&#10;A)accrue only to land.&#10;B)accrue only to labor.&#10;C)accrue only to entrepreneurs.&#10;D)can accrue to any resource.

Accepted Answer

The answer of Economic rents&#10;A)accrue only to land.&#10;B)accrue only to...

Question 30

All of the following would agree that rent should not be paid to landlords except&#10;A)many biblical prophets.&#10;B)Pierre Joseph Proudhon.&#10;C)Henry George.&#10;D)most economists.

Accepted Answer

The answer of All of the following would agree that...

Question 31

Changes in land rents in the United States are chiefly the result of&#10;A)changes in the demand for land.&#10;B)increased land fertility.&#10;C)production of new land.&#10;D)changes in the supply of land.

Accepted Answer

The answer of Changes in land rents in the United...

Question 32

Which of the following in NOT a source of profit?&#10;A)Innovation&#10;B)Wages&#10;C)Exercise of monopoly power&#10;D)Risk taking

Accepted Answer

The answer of Which of the following in NOT a...

Question 33

The single-tax movement, headed by Henry George, refers to the idea that&#10;A)taxes on rent are less costly to administer than other taxes.&#10;B)rent is a surplus that can be taxed without distorting resource allocation.&#10;C)rent should not be taxed because it is a free gift of nature.&#10;D)rent is based on a derived demand and should not be taxed.

Accepted Answer

The answer of The single-tax movement, headed by Henry George,...

Question 34

Changes in rent on a plot of land are chiefly due to&#10;A)changes in demand.&#10;B)changes in supply.&#10;C)changes in both demand and supply.&#10;D)changes in neither supply nor demand.

Accepted Answer

The answer of Changes in rent on a plot of...

Question 35

Frank Knight said that profit&#10;A)is indistinguishable from risk.&#10;B)exists when the probability of a given event cannot be predicted reliably.&#10;C)can be incorporated into the cost structure of production.&#10;D)forces entrepreneurs to make unwise decisions with imperfect information.

Accepted Answer

The answer of Frank Knight said that profit&#10;A)is indistinguishable from...

Question 36

Which statement is false?&#10;A)The most important determinant of the value of an acre of land is its location.&#10;B)The supply of land is virtually fixed.&#10;C)Land is not a resource; only the minerals that are found under it are resources.&#10;D)A firm's demand for land is its marginal revenue product schedule for land.&#10;E)None of the statements is false.

Accepted Answer

The answer of Which statement is false?&#10;A)The most important determinant...

Question 37

Frank Knight's theory of profit focuses on ______ and Joseph Schumpeter's theory of profit focuses on ______.&#10;A)risk bearing; innovation&#10;B)innovation; risk bearing&#10;C)risk bearing; risk bearing&#10;D)innovation; innovation

Accepted Answer

The answer of Frank Knight's theory of profit focuses on...

Question 38

Which statement is true?&#10;A)Frank Knight believed that capital is surplus value that has been stolen from the worker.&#10;B)Joseph Schumpeter believed that risk-bearing is no part of the entrepreneurial function.&#10;C)Karl Marx believed that profits were the capitalist's reward for innovation.&#10;D)None of the statements are true.

Accepted Answer

The answer of Which statement is true?&#10;A)Frank Knight believed that...

Question 39

If Bristol-Myers Squibb discovered a miracle drug that cured some forms of cancer, which theory would apply to the profits it earned?&#10;A)Reward for innovation.&#10;B)Reward for risk-taking.&#10;C)Monopoly profits.&#10;D)All of choices are true.

Accepted Answer

The answer of If Bristol-Myers Squibb discovered a miracle drug...

Question 40

Given the market rate of interest, the present value of $10,000 to be received after a period of 5 years&#10;A)will be more than the present value of $10,000 to be received after a period of 4 years.&#10;B)will be less than the present value of $10,000 to be received after a period of 6 years.&#10;C)will be more than the present value of $10,000 to be received after a period of 6 years.&#10;D)will be the same as the present value of $10,000 to be received after a period of 6 years.&#10;E)will be the same as the present value of $10,000 to be received after a period of 4 years.

Accepted Answer

The answer of Given the market rate of interest, the...

Question 41

Use the following Figure to answer the question :

If the dotted horizontal line represents the effect of a usury law then there is a ____ of loanable funds of _____ billion dollars.

A)surplus; 275
B)shortage; 275
C)surplus; 400
D)shortage; 400

Accepted Answer

The answer of Use the following Figure to answer the...

Question 42

Usury laws lead to&#10;A)a surplus of loanable funds.&#10;B)a shortage of loanable funds.&#10;C)a floor under interest rates.&#10;D)more lenders than borrowers.

Accepted Answer

The answer of Usury laws lead to&#10;A)a surplus of loanable...

Question 43

Use the following Figure to answer the question : &#10; &#10;If there were no usury law the quantity of money borrowed would be $_______ billion.&#10;A)80&#10;B)110&#10;C)130&#10;D)140&#10;E)160

Accepted Answer

The answer of Use the following Figure to answer the...

Question 44

Usury laws are popular with _______.&#10;A)the public and with economists&#10;B)the public, but not with economists&#10;C)economists, but not with public&#10;D)neither the public nor with economists

Accepted Answer

The answer of Usury laws are popular with _______.&#10;A)the public...

Question 45

Which statement is true?&#10;A)Usury laws hurt some borrowers, but don't interfere with the price mechanism.&#10;B)Usury laws hurt some borrowers and interfere with the price mechanism.&#10;C)Usury laws interfere with the price mechanism, but don't hurt borrowers.&#10;D)Usury laws neither interfere with the price mechanism, nor hurt borrowers.

Accepted Answer

The answer of Which statement is true?&#10;A)Usury laws hurt some...

Question 46

Which statement is true?&#10;A)Joseph Schumpeter said, &#34;risk bearing is no part of the entrepreneurial function.&#34;&#10;B)Benjamin Franklin said, &#34;It is better to borrow than to lend.&#34;&#10;C)Aristotle said, &#34;the fair rate of interest is exactly what the market will bear.&#34;&#10;D)David Ricardo said, &#34;the landlord's return, rent, should be taxed away by the government.&#34;

Accepted Answer

The answer of Which statement is true?&#10;A)Joseph Schumpeter said, &#34;risk...

Question 47

Which statement is false?&#10;A)Rent is an excellent means of efficiently allocating the use of scarce land.&#10;B)There is a very strong current in economic thought that denies the landlord's claim to rent.&#10;C)&#34;The land shall not be sold forever&#34; is a biblical admonition with which some people still agree.&#10;D)None of the statements is false.

Accepted Answer

The answer of Which statement is false?&#10;A)Rent is an excellent...

Question 48

Use the following Figure to answer the question :

If the dotted horizontal line represents the effect of a usury law then there is a ____ of loanable funds of _____ billion dollars.

A)surplus; 275
B)shortage; 275
C)surplus; 400
D)shortage; 400

Accepted Answer

The answer of Use the following Figure to answer the...

Question 49

During a time of very tight credit, if usury laws were passed,&#10;A)interest rates would tend to be lower.&#10;B)interest rates would not be affected.&#10;C)interest rates would tend to be higher.

Accepted Answer

The answer of During a time of very tight credit,...

Question 50

Use the following Figure to answer the question :

If the dotted horizontal line represents the effect of a usury law then there is a ____ of loanable funds of _____ billion dollars.

A)surplus; 275
B)shortage; 275
C)surplus; 400
D)shortage; 400

Accepted Answer

The answer of Use the following Figure to answer the...

Question 51

Which statement is true?&#10;A)Usury laws enable banks to charge higher credit card interest than the price mechanism would allow.&#10;B)Usury laws prevent banks from charging higher credit card interest rates that the price mechanism would allow.&#10;C)Usury laws have never had any effect on how much interest is charged.&#10;D)None of the statements is true.

Accepted Answer

The answer of Which statement is true?&#10;A)Usury laws enable banks...

Question 52

Which statement is true?&#10;A)Usury laws hurt borrowers by forcing them to pay very high interest rates.&#10;B)Usury laws hurt borrowers by preventing them from getting loans, albeit at higher rates of interest.&#10;C)Usury laws hurt borrowers by making them into lenders.&#10;D)Usury laws do not hurt borrowers.

Accepted Answer

The answer of Which statement is true?&#10;A)Usury laws hurt borrowers...

Question 53

Use the following Figure to answer the question :

If the dotted horizontal line represents the effect of a usury law then there is a ____ of loanable funds of _____ billion dollars.

A)surplus; 275
B)shortage; 275
C)surplus; 400
D)shortage; 400

Accepted Answer

The answer of Use the following Figure to answer the...

Question 54

Usury is considered the charging of&#10;A)higher interest rates than people are willing to pay.&#10;B)lower interest rates than people are willing to pay.&#10;C)unconscionably high interest rates.&#10;D)extremely low rates of interest.

Accepted Answer

The answer of Usury is considered the charging of&#10;A)higher interest...

Question 55

Use the following Figure to answer the question : &#10; &#10;If there were no usury law the quantity of money borrowed would be $________ billion.&#10;A)125&#10;B)250&#10;C)275&#10;D)300&#10;E)400

Accepted Answer

The answer of Use the following Figure to answer the...

Question 56

Use the following Figure to answer the question : &#10; &#10;If there were no usury law the interest rate would be ________%.&#10;A)under 18&#10;B)18&#10;C)22&#10;D)24&#10;E)28

Accepted Answer

The answer of Use the following Figure to answer the...

Question 57

If the output per acre of land triples, then the productivity of an acre of land&#10;A)has been cut by two-thirds.&#10;B)has been cut by one-third.&#10;C)has stayed about the same.&#10;D)has increased.&#10;E)has tripled.

Accepted Answer

The answer of If the output per acre of land...

Question 58

Who said this: &#34;The most hated sort, with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural objects of it. For money was intended to be used in exchange, but not to increase at interest......of all modes of getting wealth this is the most unnatural.&#34;&#10;A)Aristotle&#10;B)Moses&#10;C)Benjamin Franklin&#10;D)Frank Knight&#10;E)Joseph Schumpeter

Accepted Answer

The answer of Who said this: &#34;The most hated sort,...

Question 59

Use the following Figure to answer the question : &#10; &#10;If there were no usury law the interest rate would be _________%.&#10;A)6&#10;B)12&#10;C)18&#10;D)24&#10;E)30

Accepted Answer

The answer of Use the following Figure to answer the...

Question 60

Which of these does not interfere with the price mechanism?&#10;A)Usury laws&#10;B)Minimum wage laws&#10;C)Farm price supports, or price floors&#10;D)The law of supply and demand

Accepted Answer

The answer of Which of these does not interfere with...

Question 61

Use the following Figure to answer the question :

If there were no usury law the quantity of money borrowed would be $_______ billion.

A)80
B)110
C)130
D)140
E)160

Accepted Answer

The answer of Use the following Figure to answer the...

Question 62

Which statement is false?&#10;A)Rent is an excellent means of efficiently allocating the use of scarce land.&#10;B)Economists dislike the way the price mechanism works because it leads to extremely high rents and interest rates.&#10;C)The interest rate is especially important to long-term investment projects.&#10;D)The projected long-term corporate profits are important when considering investment projects.

Accepted Answer

The answer of Which statement is false?&#10;A)Rent is an excellent...

Question 63

Congress passed a law effective in October 2007 which:&#10;A)placed a 36 percent maximum of payday loans.&#10;B)placed a 36 percent maximum of payday loans made to active duty personnel and their families.&#10;C)released all restrictions on interest rates charged by payday loan companies.&#10;D)restricted payday loan companies from operating in 15 states.

Accepted Answer

The answer of Congress passed a law effective in October...

Question 64

The present value of a dollar rises as&#10;A)the interest rate declines and the number of years you wait for your money declines.&#10;B)the interest rate rises and the number of years you wait for your money rises.&#10;C)the interest rate declines and the number of years you wait for your money rises.&#10;D)the interest rate rises and the number of years you wait for your money declines.

Accepted Answer

The answer of The present value of a dollar rises...

Deck 29: Rent, Interest, and Profit