Chapter 14

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Rent, Interest, and Profit

the price paid for the use of land and other nonreproducible resources

economic or pure rent is:

higher rental payments will not bring forth a larger quantity of land

To say that land rent performs no incentive function means that:

Economic rent is a price paid for productive land resources whose supply is perfectly inelastic

Which of the following statements is correct?

are fixed in total supply

Economic rent refers to the price paid for land and other natural resources that:

the supply curve lies entirely to the right of the demand curve

Landowners will not recieve any rent so long as:

indicates that price increases bring forth more of a resource

The incentive function of prices:

technology advances make land more productive

The demand for farmland will increase if:

although land has no production cost from society's viewpoint, rental payments are costs to individual producers

Which of the following is correct?

The rent paid for the pasture land used to graze cattle would increase if:

1. the productivity of the land increased
2. People decided to consume more beef
3. oil deposits were discovered on the land

a high tax on land rent is justified because land rent performs no incentive function

Henry George's single tax movement was based on the argument that:

Economic rent could be heavily taxed without impairing the supply of land or therefor ethe productive capacity of the economy

In his book, Progress and Poverty, Henry George argued that:

price paid for the use of money

Interest is the:

the quantities demanded and supplied of loanable funds

The quilibirum interest rate equates:

lower on less risky loans than on riskier loans

Other things equal, interest rates are:

the interest rate is les on small loans than on larger loans

Which of the following generalization is false? Other things equal:

the allocation of resources and the level of resource use

Economic profit affects:

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