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Rent is the payment received by resource owners for the use of their natural resources.
a.
True
b.
False
Step by step
Solved in 3 steps
- Explain the term resourceAn increase in land rents a. will lead to an increase in the marginal revenue product of all inputs used in production except for the land. b. will lead to an increase in the marginal revenue product of all inputs used in production on the land. c. will lead to land to be used less intensively as its marginal revenue product has decreased. d. will bring some previously zero-rent land into productive use.Continuing from Exercise 7.1, the films factory sits on land owned by the firm that it could rent for 30,000 per year. What was the films economic profit last year?
- Andy runs a small convenient store. He owns the place; he has hired a person for $8 per hour, 8 hours per day, 7 days a week. He works in the store himself for 3 hours per day. The utility cost $500 per month, the cost of buying and transporting the goods to his store is $3000 per month. The rent rate of the place is $2000 per month. A. What is his total monthly expenditure? B. What is his monthly opportunity cost?A resource does not have to have utility to be a resource. True FalseWith explain
- Land Rent ($) A 0 D₁ D₂ D₂ D₁ Acres of Land Which of the following statements is true of land as shown in the diagram? A. It would be a free resource in the case of all four demand curves. B. It would be an economic (scarce) resource in the case of all four demand curves. C. It will cease to be used in production if demand falls below D4. D. It would be a free resource if demand is D4 or less.Please help me solve this problem. Thank you!a. What is the effect of these changes on the rental rate of capital? B. What is the effect of these changes on the rental rate of land?
- What is production efficiencyhow does the production theory and concepts affect revenueSince most consumers spend very little on salt, a small increase in the price of salt will:A. reduce quantity demanded by a large amountB. not reduce quantity demanded by very muchC. not change quantity demandedD. increase quantity demanded by a small amount 2.Fred is considering opening a ski shop in Colorado. Assume Fred will incur the following costs: building rent= $100000/year, inventory= $250000/ year, energy=$50000/year, and labor (one clerk) = $10000/year. In addition, Fred’s current income as a computer programmer is $40000 per year. Assuming Fred would earn $ 460000 in revenues, he could expect to earn:A. an accounting profit of $10000 per yearB. an accounting profit of $ 60000 per yearC. an economic profit of $ 10000 per yearD. an economic profit of $50000 per year 3.Suppose a firm employs only capital and labour (K and L) and its production function is Q = 2KL. If the quantities of labour and capital are fixed at K =10 and L = 25, then:A. total output cannot exceed 125B.…
