![](/olcweb/styles/shared/spacer.gif) |
1 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) Which of the following is not determined by supply and demand? |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | rent |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | interest |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | profit |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | wages |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
2 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) The supply of land at a particular location is |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | perfectly elastic. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | elastic. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | inelastic. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | perfectly inelastic. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
3 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) When the lease on a store at Broadway and Main is ending, the landlord tells the store owner that the rent will double. We may conclude that |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | the landlord is greedy. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | the demand for that location had doubled (ignoring inflation) since the original lease was signed. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | land around Broadway and main has become more scarce. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | the landlord just doesn't like the store owner. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
4 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) The demand for a parcel of land at the intersection of two highways goes up. This increase in demand results in |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | an increase in the price of the land. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | an increase in the quantity of the land. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | an increase in price and quantity. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
5 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) Statement I. The calculation of the economic rent earned by a salaried person is virtually the same as the calculation of the economic rent earned by a landlord. Statement II. The reason a store owner on a busy street charges higher prices than the store owner on a less busy street is because she pays a higher rent. |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | Statement I is true and statement II is false. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | Statement II is true and statement I is false. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | Both statements are true. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | Both statements are false. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
6 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) Which is the most accurate statement? |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | The basic economic function of rent is to provide incomes to landlords. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | If landlords could be forced to lower rents, store owners would charge lower prices. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | Rent acts as a guidance mechanism, directing the most productive (i.e., highest-paying) enterprises to the most desirable (i.e., expensive) land. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | Rent is inherently unfair and should be abolished. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
7 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) Statement I. The demand for loanable funds is almost completely inelastic. Statement II. Interest rates are set by the federal government. |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | Statement I is true and statement II is false. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | Statement II is true and statement I is false. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | Both statements are true. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | Both statements are false. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
8 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) What constitutes a "fair" rate of interest was debated by each of the following except |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | Aristotle. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | Mosaic laws in the book of Deuteronomy. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | the Church in the Middle Ages. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | the Federal Reserve Board of Governors. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
9 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) When the supply of loanable funds rises, the interest rate ______and the quantity of money lent _____. |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | rises, rises |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | falls, falls |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | rises, falls |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | falls, rises |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
10 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) An interest rate ceiling keeps interest rates _______ and creates a ___________ of loanable funds. |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | down, shortage |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | down, surplus |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | up, shortage |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | up, surplus |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
11 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) Statement I. The net productivity of capital is a firm's MRP schedule of capital. Statement II. As the capital cost rises, the net productivity of capital declines. |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | Statement I is true and statement II is false. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | Statement II is true and statement I is false. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | Both statements are true. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | Both statements are false. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
12 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) When the interest rate rises, the value of an asset |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | rises. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | falls. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | remains the same. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
13 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) Statement I. A dollar today is worth more than a dollar you will have in the future. Statement II. Profits are determined by supply and demand. |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | Statement I is true and statement II is false. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | Statement II is true and statement I is false. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | Both statements are true. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | Both statements are false. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
14 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) As the interest rate falls, the present value of a dollar |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | rises. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | falls. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | stays the same. |
![](/olcweb/styles/shared/spacer.gif) |
![](/olcweb/styles/shared/spacer.gif) |
15 | ![](/olcweb/styles/shared/spacer.gif) | ![](/olcweb/styles/shared/spacer.gif) Karl Marx's theory of profits was based on the view that the entrepreneur was a(n) |
| ![](/olcweb/styles/shared/spacer.gif) | A)![](/olcweb/styles/shared/spacer.gif) | risk taker. |
| ![](/olcweb/styles/shared/spacer.gif) | B)![](/olcweb/styles/shared/spacer.gif) | innovator. |
| ![](/olcweb/styles/shared/spacer.gif) | C)![](/olcweb/styles/shared/spacer.gif) | monopolist. |
| ![](/olcweb/styles/shared/spacer.gif) | D)![](/olcweb/styles/shared/spacer.gif) | exploiter of labor. |
![](/olcweb/styles/shared/spacer.gif) |