Economics 29

Question 1

In general, a plot of land goes to:

• whomever the government designates
• the highest bidder
• the person who makes the best use of it

Answer 1

The highest bidder

Question 2

The supply of land is

• perfectly elastic
• relatively elastic
• realtively inelastic
• perfectly inelastic

Answer 2

Perfectly inelastic

Question 3

Who wanted to tax away all rent from landlords?

• David Ricardo
• Henry George
• Josephy Schumpeter
• Frank Knight

Answer 3

Henry George

Question 4

Economists say that a dollar today is worth

• more than a dollar in the future
• less than a dollar in the future
• the same as a dollar in the future

Answer 4

more than a dollar in the future

Question 5

Which is not determined by supply and demand?

• The wage rate
• the interest rate
• Rent
• Profits

Answer 5

profits

Question 6

Profits are a reward for risk-bearing would be a view held by

• Josephy Schumpeter
• Frank Knight
• Henry George
• Karl Marx

Answer 6

Frank Knight

Question 7

_____________________________ sees the entrepreneur as an exploiter of labor

• Joseph Schumpeter
• Frank Knight
• Henry George
• Karl Marx

Answer 7

Karl Marx

Question 8

A change in rent will be brought about by a change in

• the supply of land
• the demand for land
• both the supply of and the demand for land
• neither the supply of nor the demand for land

Answer 8

the demand for land

Question 9

Henry George advocated each of the following except that

• all land should be free
• all rents should be taxed away
• the government should raise all its tax revenue from a single tax on land
• since land did not really belong to the landlords, rent was an unearned surplus

Answer 9

all land should be free

Question 10

The main factor in determining how much one plot of land is worth relative to another plot is

• its fertility
• the average amount of rainfall
• its location
• none of the choices are true

Answer 10

its location

Question 11

In economics we say the amount of land is

• fixed
• variable
• boh fixed and variable
• neither fixed nor variable

Answer 11

fixed

Question 12

Which of the following is NOT a source of profit?

• Innovation
• Wages
• Exercise of monopoly power
• Risk taking

Answer 12

Wages

Question 13

The present value of $1000.00 received 2 years from now given the current rate of interest

• is less than the present value of $1000 received 1 year from now
• is the same as $1000.00 received 3 years from today
• is the same as $1000.00 received 1 year from today
• is less than $1000.00 received 3 years from today

Answer 13

is less than the present value of $1000 received 1 year from now

Question 14

The suppl of land at a location is

• perfectly elastic
• described by an upward-sloping supply curve
• perfectly ineslastic
• dependent on the demand for land at that location

Answer 14

perfectly inelastic

Question 15

Changes in land rents in the United States are chiefly the result of

• changes in the demand for land
• increased land fertility
• production of new land
• changes in the supply of land

Answer 15

changes in the demand for land

Question 16

Which statement is true?

• Rent and wages, but not interest, are determined by supply and demand
• Wages and interest, but no rent, are determined by supply and demand
• Rent and interest, but not wages, are determined by supply and demand
• Rent, interest, and wages are determined by supply and demand
• None of the statement are true

Answer 16

Rent, interest and wages are determined by supply and demand

Question 17

If Bristol Myers Squibb discovered a miracle drug that cured some forms of cancer, which theory would apply to the profits it earned?

• Reward for innovation
• Reward for risk-taking
• Monopoly profits
• All of the choices are true
• None of the choices are true

Answer 17

All of the choices are true

Question 18

The horizontal dotted line is

• a price ceiling
• a price floor
• can be either a price ceiling or a price floor
• is neither a price ceiling nor a price floor

Answer 18

a price ceiling

Question 19

Which statement is true?

• Usury laws enable banks to charge higher credit card interest than the price mechanism would allow
• Usury laws prevent banks from charging higher credit card interest rates that the price mechanism owuld allow
• Usury laws have never had any effect on how much interest is charged
• None of the statements is true

Answer 19

Usury laws prevent banks from charging credit card interest rates that the price mechanism would allow

Question 20

Usury is considered the charging of

• higher interest rates than people are willing to pay
• lower interest rates than people are willing to pay
• unconscionably high interest rates
• extremely low rates of interest

Answer 20

unconsciounably high interest rates

Question 21

Which statement is true?

• Usury laws hurt some borrowers, but dont interfere with the price mechanism
• Usury laws hurt some borrowers and interfere with the price mechanism
• Usury laws interfere with the price mechanism but don’t hurt borrowers
• Usury laws neither interfere with the price mechanism nor hurt borrowers

Answer 21

Usury laws hurt some borrowers and interfere with the price mechanism

Question 22

If there were no usury law the interest rate would be ____________________%.

• under 18
• 18
• 22
• 24
• 28

Answer 22

under 28

Question 23

Usury laws are popular with _________________.

• the public and with economists
• the public but not with economists
• economists but not with the pubic
• neither the public nor with economists

Answer 23

the public but not with economists

Question 24

Which of these does not interfere with the price mechanism?

• Usury laws
• Minimum wage laws
• Farm price supports or price floors
• The law of supply and demand

Answer 24

The law of supply and demand

Question 25

Which is the most accurate statement? * Fringe and sub-prime lending should be outlawed * Poor people cannot get loans in the United States * Payday lenders like the Military Financial Network make a low interest loand to our military personnel. * When poor people get personal loans, they usually pay much higher interest rates than the average American

Answer 25

When poor people get personal loans, they usually pay much higher interest rates than the average American