Economic rent is a concept that can be applied
A) only to land, as that is the only resource that is in limited supply.
B) only to land and natural talent.
C) to any factor of production that is fixed in supply.
D) to any resource or factor of production that has a supply curve with a positive (upward) slope.
Answer: C
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Every Giffen good is a necessity but not every interior good is a necessity.
Answer the following statement true (T) or false (F)
In a closed economy that does not have international trade, the spending multiplier equals _____
a. 1/MPS b. 1/MPC c. 1/(MPC-1) d. 1/(1-MPS) e. 1/(1+MPS)
Which of the following equations defines marginal revenue product?
a. MRP = P times Q. b. MRP = total cost. c. MRP = total revenue minus total cost. d. MRP = MPP times price of the product.
A natural monopolist that sets prices equal to marginal cost will:
A. incur losses. B. earn zero accounting profits. C. be inefficient. D. set a price greater than average total costs.