California passed a law called “Proposition 2 ½” that limited property taxes to 2.5 percent of property value. Naturally this reduced taxes on many properties, and apartment landlords had more money at the end of the year at given rents. This windfall could be called an economic rent only if
A. we push the definition of economic rent too far.
B. the supply of rental units can be expanded.
C. the supply of rental units is fixed.
D. competitors can build housing at costs that yield the return that was earned before the tax cut.
Answer: C
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When the economy is in short-run equilibrium,
A) there are increases in inventory. B) there are decreases in inventory. C) total expenditures equal total production. D) people want to buy more than will be produced.
Frank owns an apple farm and plans to spend 4 hours today picking apples. The number of apples he can pick per hour depends on the total number of hours he spends working in either the east orchard or the west orchard in the manner shown in the accompanying table below.Hours in East OrchardNumber of Apples Per HourHours in West OrchardNumber of Apples Per Hour140110232210325310420410 How should Frank divide his time between the east and the west orchard?
A. He should spend all 4 hours in the east orchard. B. He should spend 3 hours in the east orchard and 1 hour in the west orchard. C. He should spend 1 hour in the east orchard and 3 hours in the west orchard. D. He should spend 2 hours in east orchard and 2 hours in the west orchard.
Market efficiency takes place when the marginal benefit of the last unit produced is ______.
a. equal to the marginal cost of producing it b. greater than the marginal cost of producing it c. less than the marginal cost of producing it d. the square of the marginal cost of producing it
James is a resident of the U.S. and has accrued capital gains on an asset. If James sells the asset, ________.
A. its purchase price will include the amount of capital-gains tax payable B. he will realize the gain and owe capital-gains tax C. his capital-gain will be tax free D. the buyer of the asset will owe capital-gains tax