........FACTORS OF PRODUCTION.....

Question 1

A common measure of a nation's productive output is its:

Capital factor income

Labor factor income

Gross domestic product

All of the above

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Question 2

Which of these is a key factor of production?

Capital

Consumption

Rent

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Question 3

Factor pricing is important because it:

Guides resource allocations

Is a major determinant of your annual income

Helps determine the distribution of income

All of the above

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Question 4

The essential feature of land is that:

1. Its quantity is fixed

2. It is completely unresponsive to price.

Both 1 and 2

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Question 5

Pure Economic Rent is define as the price paid for the use of land and other natural resources which are:

Completely fixed in demand

Completely fixed in supply

Completely fixed in demand and supply

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Question 6

Pure economic rent is:

Different from the rent people pay for their homes or apartments

The same thing as the rent people pay for their homes or apartments

The same thing as the rent people pay for their homes or apartments less any tax credits

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Question 7

The rental payment you make to your landlord typically includes compensation for:

The use of capital such as the building structure

Labor, including building maintenance and management;

The use of utility services such as water, electricity, and gas.

All of the above

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Question 8

In the accompanying figure, which would best represent the supply of land? 

S1

S2

S3

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Question 9

During the “Corn Wars” in England, in the 19th century, landlords were raising the rent they were charging farmers for the use of their land, thereby forcing farmers to pass on the increase in land costs to consumers. According to the Ricardian Theory of rent, which is true?

Rent is high because the price of corn is high.

The price of corn is high because a rent is paid

The price of corn and the level of rent are independent

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Question 10

The rights given to people to use specific property as they see fit are called.

1. Inalienable rights

2. Property rights

Both 1 and 2

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Question 11

Henry George argued that a single tax on land would be:

1. More fair

2. More efficient

Both 1 and 2

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Question 12

A tax on pure economic rent will:

Result in large allocative inefficiencies

Result in moderate allocative inefficiencies

Result in no allocative inefficiencies

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Question 13

Suppose the government introduces a 50% tax on all land rent paid by farmers to landowners. Who bears the actual burden of the tax?

Farmers

Landowners

Both 1 and 2

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Question 14

The study of who bears the burden of a tax is called:

Net tax analysis

Tax burden analysis

Tax incidence analysis

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Question 15

Criticisms of a Georgist land tax include:

1. A land tax alone would not bring in enough revenues

2. Economic rent cannot be readily disentangled from payments for capital improvements

Both 1 and 2

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Question 16

A quasi-rent is:

1. Any payment to a factor resource above its opportunity cost

2. Any payment to a factor resource above the amount it would receive in its next-best use

Both 1 and 2

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Question 17

Superstars command salaries significantly above the salaries they might earn in their next best job. This increment is called:

Rent

Quasi-rent

Supra-rent

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Question 18

Rent seeking is:

1. The name given to restricting supply to increase the price suppliers receive

2. An attempt to create either ownership rights or institutional structures that favor you

Both 1 and 2

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Question 19

Suppose you are the CEO of a domestic firm and your foreign rival is offering lower prices to your consumers because of a production cost advantage. One way to beat your rival is to:

1. Lobby congress to impose tariffs

2. Produce more efficiently

Both 1 and 2

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