Problem 1
When using a supply-and-demand model to illustrate how land rents are set, economists typically draw the supply curve as a vertical line because: a. The supply of land is fixed. b. The supply of land is perfectly inelastic. c. The quantity supplied of land does not increase when rents go up. d. All of the above.
Problem 3
The a main argument put forth by advocates of the single tax movement was that: a. Taxing only income would make for a more equal society. b. Taxing only land would be very efficient because taxing land does not decrease its supply. c. Taxing only imports would help to protect local jobs and stimulate local entrepreneurs. d. Having only one tax would be much easier for people to understand and much less costly to administer than our current system with its wide variety of taxes.
Problem 4
Angela puts \(\$ 1,000\) in a savings account that pays 3 percent per year. What is the future value of her money one year from now? a. \(\$ 970\) b. \(\$ 1,000\) c. \(\$ 1,003\) d. \(\$ 1,030\)
Problem 5
As shown in Table \(16.2, \$ 1,000\) invested at 10 percent compound interest will grow into \(\$ 1,331\) after three years. What is the present value of \(\$ 2,662\) in three years if it is discounted back to the present at a 10 percent compound interest rate?
Problem 6
Entrepreneurs are the residual claimants at their respective firms. This means that they: a. Only get paid if there is any money left over after all the other factors of production have been paid. b. Must bear the financial risks of running their firms. c. Receive whatever accounting profits or losses their firms generate. d. All of the above.
Problem 7
True or false. As a capitalist economy, the vast majority of U.S. national income flows to the owners of capital.
