When the supply curve of land is upward sloping and intersects the demand curve at $30 per acre, then the last acre brought into production receives
a. $30 in land rent
b. $0 in land rent
c. average land rent of somewhere between $0 and $30, depending on the price of land
d. land rent equal to the price of an acre of land
e. land rent greater than $30 because the last acre is located to the right (in the land market graph) of the intersection of the demand and supply curves
B
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Suppose new oil reserves are discovered that were not previously known. What happens to the user cost of oil?
A) Decreases B) Increases C) Remains the same D) May increase or decrease, depending on the discount rate
If the price of one good goes up and the demand of a related good goes down, the two goods are
A) complements. B) substitutes. C) inferior goods. D) normal goods.
The speculative demand for money:
a. varies inversely with income. b. is only concerned with active money. c. involves holding money for unexpected problems. d. varies directly with the transactions demand for money. e. varies inversely with the interest rate.
Which of the following is false?
a. The money supply times velocity equals the price level times real GDP b. If individuals are writing lots of checks on their checking accounts and spending currency as fast as they receive it, velocity will tend to be high. c. The magnitude of velocity does not depend on the definition of money that is used. d. Velocity equals nominal GDP divided by the money supply.