When does a resource earn only economic rent?
a. When the supply curve of the resource is relatively elastic
b. When the supply curve of the resource is horizontal
c. When the supply curve of the resource is vertical
d. When the supply curve of the resource is relatively inelastic
e. When the supply curve of the resource is backward bending
c
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Use the following figure to answer the next question.
If box E represents government, box D the resource market, and box B the product market, then flows (5) and (7) represent
A. goods and services. B. net taxes. C. resources. D. government expenditures.
La Dila Corp . decided to sponsor an AIDS awareness campaign when it discovered that its rival had been sponsoring several fund-raising events for AIDS-afflicted children. This is an example of ________
A) bounded rationality B) pure altruism C) impure altruism D) consumerism
Which of the following statements correctly uses the concept of opportunity cost in decision making?
I. "Because my secretary's time has already been paid for, my cost of taking on an additional project is lower than it otherwise would be." II. "Since NASA is running under budget this year, the cost of another space shuttle launch is lower than it otherwise would be." A) I is true, and II is false. B) I is false, and II is true. C) I and II are both true. D) I and II are both false.
A community of 100 persons wants to redistribute (transfer) some income from themselves to members of group A. So far, they don't seem to be able to do what they say they want to do. This is most likely because each member of the community of 100 persons sees his contribution as __________________ relative to the total (of contributions) and therefore chooses to be a __________________
A) large; rent-seeker B) small; rent-seeker C) small; free rider D) large; free rider E) none of the above