If the annual returns from an asset increase, the present value of the asset will a.not

  If the annual returns from an asset increase, the present value of the asset will

a.not be affected

b.decrease

c.increase

d.increase only if there is also an increase in the rate of interest

e.decrease only if there is also an increase in the rate of interest

42.              Rent is defined as the

a.payment received for the use of an asset

b.cost to an entrepreneur for using his or her own resources

c.difference between what a resource receives and the cost of bringing that resource
into production

d.difference between the total revenue earned from selling a good and the cost of
bringing the good into being

e.selling value of land

43.              Economist David Ricardo argued that rent

a.is unethical

b.would be higher if the country opened its doors to international trade

c.determines the value of the goods produced with the asset

d.depends on price and not, as commonly thought, price depends on rent

e.can only be earned on land

44.              If the city mayor would perform mayoral duties for $10,000 because he just loves the
                            limelight, but the salary for the position is $45,000, then the mayor is earning

a.$10,000 rental income

b.$35,000 professional rent

c.$45,000 differential rent

d.$35,000 wage-related rent

e.$10,000 wage-related rent

45.              Mary is a homemaker while husband Jack works at the warehouse. The minimum salary
                            Mary would take for a market-related job is $15,000. She is offered a job at the office
                            next to the warehouse for $25,000, which she takes. Mary receives

a.$10,000 in differential rent

b.$25,000 in wage-related rent

c.$15,000 in wage-related rent

d.$15,000 in differential rent

e.$10,000 in wage-related rent

46.              For providing their resources to firms, workers, loanable funds’ suppliers, landowners,
                            and entrepreneurs, receive (in the same order)

a.wages, rent, profit, and interest

b.wages, interest, rent, and profit

c.wages, profit, rent, and interest

d.wages, interest, profit, and rent

e.profit, rent, interest, and wages

47.              Entrepreneurs, if successful, earn

a.rent

b.profit

c.wages

d.salary

e.interest

48.              Suppose Frank quits his $25,000 a year job and starts his own hauling company. He takes
                            $10,000 out of his savings account at the bank, where he was earning 5 percent interest,
                            to buy a truck. His other expenses, including the truck, are $20,000. Frank’s revenues are
                            $48,000. Frank ends up with

a.$3,000 in wage-related rent

b.$2,500 in entrepreneurial profit

c.a $7,000 loss

d.$48,000 in entrepreneurial profit

e.$3,000 in entrepreneurial profit

49.              If the loanable funds market pays 8 percent and you want to earn $1,000 a year of interest
                            income, how much in loanable funds must you supply to the market in order to
                            accomplish this?

a.$8,000

b.$10,000

c.$14,000

d.$12,500

e.$18,000

50.              The addition to total physical product when one more unit of capital (or loanable funds)
                            is used in production is called

a.marginal physical product of capital

b.marginal revenue product of capital

c.marginal use of loanable funds

d.interest

e.depreciation