The difference between the market price of an acre of land and its supply price (including transportation) is
a. land rent
b. zero, by definition
c. negative
d. the price of land
e. infinite when the supply of land is fixed
A
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Suppose the nominal interest rate is 2% and the real interest rate is -3%. We can deduce that the rate of inflation is
A) 0%. B) 2%. C) 3%. D) 5%.
The above figure shows the supply and demand curves for high-skilled and low-skilled labor. High-skilled workers earn a wage rate of
A) $15 per hour. B) $12 per hour. C) $9 per hour. D) $6 per hour.
Many art galleries keep 60% of the sale price of a painting. However, art galleries do not typically pay the artist while the painting hangs on the wall. This form of contingency contract may be efficient if
A) the artist is less risk averse than the gallery. B) the gallery is less risk averse than the artist. C) the artist is unable to diversify across galleries or paintings. D) the gallery is unable to diversify across artists of paintings.
If on-the-job working conditions have improved over time,
a. real GDP will understate the growth rate of real income. b. real GDP will overstate the growth rate of real income. c. the GDP deflator will overestimate inflation. d. real GDP will overstate the growth rate of real income, and the GDP deflator will understate inflation.