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1
All of the following statements, except one, concerning the concept of economic rent are correct. Which is the exception?
A)The more inelastic the supply of a factor, the more economic rent that factor earns.
B)A factor that has a perfectly inelastic supply will earn no transfer earnings.
C)It is possible for a factor to receive both economic rent and transfer earnings.
D)If we assume that land has only one use, such as agriculture, then all of its return is economic rent.
E)The higher the transfer earnings of a factor, the higher its economic rent will be.
2
When is the marginal revenue product of a factor at a maximum?
A)When its marginal product is at a maximum
B)When the firm's total product is at a maximum
C)When its marginal product is at a minimum
D)When both its marginal product and the firm's total product are at a maximum
E)When average product is at its maximum
3
If a firm is operating in a monopsony market, which of the following statements is correct?
A)The firm can hire additional labour at the same wage rate it is currently paying.
B)The firm would hire more labour in the monopsony situation than in the competitive situation.
C)The firm faces an upward-sloping supply of labour curve.
D)The MPRL declines faster in the case of the monopsony situation than in the competitive one.
E)The firm's demand for labour curve is downward sloping in the situation of the monopsony market and horizontal in the case of the competitive one.
4
All of the following statements, except one, are correct when a trade union successfully imposes a wage rate above equilibrium. Which is the exception?
A)There will be more workers willing to work than are hired.
B)The firm's total wage bill will definitely be higher.
C)The average firm is not operating in a competitive factor market.
D)The quantity of workers hired will be less after the imposition of the higher wage than it was before.
E)Neither the demand for nor the supply of labour has changed.





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