Exam 14: Capital, Interest, and Profits Part Four: Applications of Economic Principles

From the point of view of the whole community, price-determined rent is a payment for a resource which can be used in any industry.

Charging rents can lessen inefficient "externalities."

If a factor of production has no alternative uses, there is no efficiency gain from charging rent for its use.

"Pure economic rent" exists when the:

Rent can be charged for factors of production which have elastic supply curves.

Economists have determined that to find the socially efficient level of pollution, the marginal social benefit from abatement equal the marginal social costs of abatement.

A tax on economic rent would most likely:

If you wanted to increase tax revenue most efficiently, you should advocate taxing:

Pollution is a negative externality.

An externality is:

Actions to slow global warming would be considered global public goods.

If you want to maximize tax revenue, you should advocate taxing inputs used in the production of goods:

If a farmer faces a drop in the rent he must pay for his land, he will react to this by:

The most important economic function of rental payments for the use of land is to:

Rent does not enter into the cost of production.

Which of the following is not associated with the concept of profit?

Rent is calculated as dollars per unit of the fixed factor per unit of time.

A commodity is called appropriable when:

A resource is inappropriable when some of the costs and benefits associated with its use do not accrue to its owner.

Appropriable natural resources include: