Question 1

Refer to the demand schedule and possible supply schedules, A-D. 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

Accepted Answer

The answer of  Refer to the demand schedule and...

Question 2

The reason why socialists favor the nationalization of land is that

Accepted Answer

Socialists argue that landowners earn rent without contributing to production, as land is a natural resource not created by human effort.

Question 3

Suppose that the available quantity of a certain type of farmland is 400,000 acres, and the demand for this land is given in the table. How much of the farmland will be rented?

Accepted Answer

The answer of  Suppose that the available quantity of...

Question 4

Which of the following is not a major criticism of the single-tax movement?

Accepted Answer

The criticism that a land-rent tax will distort the use of land resources and prevent allocative efficiency is not a major criticism of the single-tax movement. The single-tax movement, which advocates for taxing land value, is often criticized for being impractical, unfair, and inadequate for funding government spending, but not typically for causing inefficiency in land use.

Question 5

In a market system, private ownership of land does not lead to which of the following results?

Accepted Answer

Private ownership of land implies that owners face opportunity costs when choosing how to use their land, as they must consider the benefits they forego by not using the land in alternative ways. Choices B, C, and D are generally considered positive outcomes of private land ownership in a market system, reflecting the principles of opportunity cost, efficient allocation of resources, and adaptability to economic changes, respectively.

Question 6

Which of the following was not a belief of Henry George and the single-tax movement?

Accepted Answer

Henry George and the single-tax movement believed that taxing rental income would not adversely affect allocative efficiency because they viewed land as a fixed resource; thus, a tax on land rent would not change the supply of land or how it is used. They argued that since the supply of land is fixed, a tax on land rent would be borne entirely by landlords and would not distort economic decisions, unlike taxes on labor or capital, which can affect how much people work or save.

Question 7

Which of the following statements is correct?

Accepted Answer

The answer of Which of the following statements is correct?
...

Question 8

Suppose that the available quantity of a certain type of farmland is 400,000 acres, and the demand for this land is given in the table. What will be the equilibrium economic rent per acre?

Accepted Answer

The answer of  Suppose that the available quantity of...

Question 9

The supply curve for a productive resource wherein price provides an incentive function is

Accepted Answer

The supply curve for a productive resource wherein price provides an incentive function is typically upward sloping to the right. This indicates that as the price of the resource increases, suppliers are willing to offer more of it for sale, reflecting the positive relationship between price and quantity supplied.

Question 10

Henry George claimed that land-rent taxes would not impair economic efficiency because

Accepted Answer

Henry George argued that taxes on land rent would not affect economic efficiency because the amount of land available does not change in response to such taxes. This is because the supply of land is fixed, and taxing the rent from land does not alter this fixed supply, nor does it discourage the use of land.

Question 11

Which of the following does not explain differences in rent for different parcels of land?

Accepted Answer

Supply-elasticity differences do not directly explain differences in rent for different parcels of land. Rent differences are primarily influenced by factors such as productivity, demand, and the marginal revenue product of the land, rather than the elasticity of supply, which relates more to the responsiveness of quantity supplied to a change in price.

Question 12

Opponents of land nationalization argue that private ownership

Accepted Answer

Rent as an efficient allocation mechanism is a common argument for private ownership, as it is believed to ensure that land is used by those who value it most highly, thus leading to its most efficient use.

Question 13

The prices paid to a productive resource usually perform an incentive function except with what resource?

Accepted Answer

Prices paid to land, such as rent, do not typically serve an incentive function because the supply of land is fixed and does not respond to price incentives in the same way as labor, capital, or entrepreneurial ability, which can be influenced by changes in their respective rewards.

Question 14

Refer to the demand schedule and possible supply schedules, A-D. 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?

Accepted Answer

The answer of  Refer to the demand schedule and...

Question 15

The aggregate economic rent received by a productive resource will decrease, ceteris paribus, whenever the

Accepted Answer

When the demand for a resource decreases, the price and quantity demanded for that resource typically fall, leading to a decrease in the aggregate economic rent received by the resource.

Question 16

Which of the following resource payments is considered by economists as surplus payments?

Accepted Answer

Economists consider rent for land as a surplus payment because it is often seen as a payment for the use of a natural resource that does not require production effort, unlike wages, interest, and profits which are compensations for active contributions to production.

Question 17

In Progress and Poverty (1879), Henry George argued for

Accepted Answer

Henry George is best known for advocating a single tax on land value, arguing that while people should own the value they produce themselves, the economic value derived from land (including natural resources) should belong equally to all members of society.

Question 18

David Ricardo, a nineteenth-century economist, wrote, "The price of corn is high not because a rent is paid, but a rent is paid because the price of the corn is high." Which of the following correctly explains Ricardo's assertion?

Accepted Answer

Ricardo's assertion is based on the principle that the price of corn (or any agricultural product) is determined by market demand and supply, and not directly by the cost of rent. When the price of corn increases due to higher demand, the profitability of growing corn also increases. This, in turn, leads to higher rents as landowners can charge more for land that is now more profitable for farming. Thus, the causality is from corn prices to rents, not the other way around.

Question 19

Suppose that the available quantity of a certain type of farmland is 400,000 acres, and the demand for this land is given in the table. If landowners were taxed at a rate of $150 per acre for their land, what would be the economic rent on this land after taxes, and how many acres would be rented?

Accepted Answer

The answer of  Suppose that the available quantity of...

Question 20

If the payment to an input is pure economic rent, then reducing that payment will

Accepted Answer

Pure economic rent is the payment to an input that is over and above what is necessary to bring that input into production. Therefore, reducing the payment that constitutes pure economic rent does not affect the availability of the input, as it would still be supplied at the lower price.

Quiz 18: Rent, Interest, and Profit

The reason why socialists favor the nationalization of land is that

Suppose that the available quantity of a certain type of farmland is 400,000 acres, and the demand for this land is given in the table. How much of the farmland will be rented?

Which of the following is not a major criticism of the single-tax movement?

In a market system, private ownership of land does not lead to which of the following results?

Which of the following was not a belief of Henry George and the single-tax movement?

Which of the following statements is correct?

Suppose that the available quantity of a certain type of farmland is 400,000 acres, and the demand for this land is given in the table. What will be the equilibrium economic rent per acre?

The supply curve for a productive resource wherein price provides an incentive function is

Henry George claimed that land-rent taxes would not impair economic efficiency because

Which of the following does not explain differences in rent for different parcels of land?

Opponents of land nationalization argue that private ownership

The prices paid to a productive resource usually perform an incentive function except with what resource?

Refer to the demand schedule and possible supply schedules, A-D. 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?

The aggregate economic rent received by a productive resource will decrease, ceteris paribus, whenever the

Which of the following resource payments is considered by economists as surplus payments?

In Progress and Poverty (1879) , Henry George argued for

David Ricardo, a nineteenth-century economist, wrote, "The price of corn is high not because a rent is paid, but a rent is paid because the price of the corn is high." Which of the following correctly explains Ricardo's assertion?

Suppose that the available quantity of a certain type of farmland is 400,000 acres, and the demand for this land is given in the table. If landowners were taxed at a rate of $150 per acre for their land, what would be the economic rent on this land after taxes, and how many acres would be rented?

If the payment to an input is pure economic rent, then reducing that payment will