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The difference between what a productive resource receives as payment for its use in

  The difference between what a productive resource receives as payment for its use in
                            production and the cost of bringing that resource into production is defined as

a.resource cost

b.resource price

c.rent

d.MRP

e.loanable funds

72.              If the price of land is zero,

a.the supply of land is a horizontal line

b.rent is zero and land is a free good

c.the MRP curve is positively sloped

d.land rents are positive

e.demand for land is relatively high

73.              If a country’s population increases while the supply of farmland is fixed, then farmland
                            prices will most likely

a.decrease because people spend more money on food and have less to spend on rent

b.increase because the marginal revenue product of food decreases

c.decrease because farmers must cultivate less productive foods such as potatoes

d.increase because the marginal revenue product of land increases

e.stay the same because there is no relation between farm land prices and population

74.              If, in response to a growing demand for food, farmers create productive acreage by
                            draining swamps,

a.the supply curve of land will be vertical

b.these new acres will generate the largest rents of all acreages

c.the MRP of land will increase

d.all land will earn zero rents because of competition

e.differential land rents will result

75.              If there are cost differences in transporting goods produced on different acres of land to
                            the same market,

a.only land closest to the market will be cultivated

b.landowners closest to the market will receive zero rent

c.location rents emerge

d.the market price and the supply price will be the same

e.transportation costs will be equalized by competition

76.              If the supply price of land is zero, including costs of transporting goods produced on the
                            land to the market, then

a.positive rents are paid for the acres furthest from the market

b.there are no rent-yielding acres

c.the demand for land must be infinitely high

d.population growth must be high

e.landowners will reap higher rents

77.              The difference between the market price of an acre of land and its supply price (including
                            transportation) is

a.land rent

b.zero, by definition

c.negative

d.the price of land

e.infinite when the supply of land is fixed

78.              Suppose acre A is located at the market with zero transport costs of bringing its radishes
                            to market. It costs acre B, located 20 miles away, $500 to transport its radishes to market.
                            If demand for radishes is large enough so that both acres will be used to produce radishes,

a.the owner of acre A will earn zero location rent

b.the owner of acre B will earn location rent of $500

c.the owners of acres A and B will earn combined location rents of $1,000

d.as long as one acre is located at the market, neither landowner of acre A nor B will
earn location rent

e.the owner of acre A will earn a location rent of $500

79.              When the supply of land is upward sloping,

a.all land owners earn land rents

b.the demand for land must intersect it

c.all land owners have the same supply price

d.different supply prices are generated for different lands

e.a rightward shift in demand causes land rents to fall

80.              A decrease in population can be expected to

a.raise land rent

b.increase the supply of land

c.decrease the demand for land

d.increase the demand for land

e.decrease the supply of land

Dec 12 2019 View more View Less

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