Chapter 17

Which statement is true? (LO1) a) All land has the same economic value. b) The most important factor affecting rent is location. c) The economic value of a plot of land is determined exclusively by the raw materials it contains. d) None of the above.

The supply of land $(\mathrm{LO}1)$ a) is fixed b) varies from time to time c) rises with demand d) is higher in urban areas than in rural areas

The rent on a particular piece of land is based on (LO1) a) the supply of land b) the buildings located on that land c) the MRP schedule of the highest bidder d) the MRP schedule of the lowest bidder

When the demand for a plot of land rises, \- $(\mathrm{LO}1)$ a) its supply will fall c) its price will fall b) its supply will rise d) its price will rise

The supply of land is (LO1) a) perfectly elastic c) relatively elastic b) perfectly inelastic d) variable in elasticity

Each of the following is a valid criticism of Henry George's ideas except that (LO1) a) a tax on land would raise only a small fraction of needed government revenue b) landlords sometimes improve the land c) like rent, other kinds of income are unearned d) a tax on land would result in a decrease in the supply of land

Which statement is true? $(\mathrm{LO}3)$ a) Prices are high because rents are high. b) Rents are high because prices are high. c) David Ricardo believed high rents would drive English farmers out of business. d) None of the above.

As interest rates rise (LO4) a) more borrowing will be undertaken b) less borrowing will be undertaken c) there is no change in the level of borrowing

In the Middle Ages the taking of interest was forbidden to (LO4) a) both Jews and Christians, but not Muslims b) both Christians and Muslims, but not Jews c) both Jews and Muslims, but not Christians d) Jews, Christians, and Muslims

A clothing store on fashionable Rodeo Drive charges more for the same clothes than another store in less fashionable Compton. Why does the first store charge more? (LO3) a) It has to pay a higher rent. b) It knows its customers can afford to pay more. c) It advertises more. d) Because it can.