Suppose a farmer in a perfectly competitive agricultural industry rents land that is uniquely productive in the production of a certain crop. In the long run,
A) the owner of the land receives economic rent while the farmer earns zero economic profit.
B) the owner of the land earns zero economic profit while the farmer receives economic rent.
C) both the farmer and the owner of the land receive economic rent.
D) neither the farmer nor the owner of the land receive economic rent.
A
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Many residents of the city of Adelphia drive without automobile insurance. Assuming that Adelphia is just like any other city and these are risk averse individuals, which of the following is most likely TRUE?
A) Economic models do not work. B) These people maximize wealth. C) The price of automobile insurance exceeds their maximum value of insurance. D) There are no automobile accidents or thefts in the city of Adelphia.
Vertical merger occurs when
A) two firms merge where one had sold its output to the other as an input. B) the merger moves the combined firm onto the horizontal portion of its long-run average cost curve. C) two firms merge where each is about the same size. D) two firms producing a similar product merge.
Assuming that beer is a normal good, what will happen to the demand for beer near college towns if student income increased?
a. Demand will fall because students love these beers
b. Demand will fall
c. Demand will rise
d. Supply would rise
What are the twin goals of the Federal Reserve Bank?
a) Low unemployment and zero inflation. b) No unemployment and stable prices. c) Low unemployment and stable prices. d) No unemployment and zero inflation.