Vhich of the following is assumed in Ricardo's concept of economic rent? Multiple Choice O A perfectly elastic demand curve. O A perfectly inelastic supply curve. A perfectly Inelastic demand curve. A perfectly elastic supply curve.
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- Using long run supply and demand curves analyze the effects Using long- run supply and demand curves, analyze the effects of an ad valorem excise tax equal to 20 percent of the market (selling) price of gasoline. How do the effects differ from those of the per- unit excise tax discussed in the text? Using long run supply and demand curves analyze the effectsState whether the following is true or false Pure economic rent occurs when the opportunity cost of a resource is zero and there is a positive price for that resources in the marketSuppose the government decides to decrease taxes (T) permanently, the effect of this policy in the medium-run is: 1. Y does not change, C and S increases. 2. Y does not change, C and S decreases. 3. Y does not change, C decreases and S increases. 4. Y. C and S does not change.
- When using a supply-and-demand model to illustrate how land rents are set, economists typically draw the supply curve as a vertical line because: a. The supply of land is fixed. b. The supply of land is perfectly inelastic. c. The quantity supplied of land does not increase when rents go up. d. All of the aboveExplain the following statement: “Profits that more than cover the cost of capital are known as economic rents.”supply of land: Q = 10 (acres of land). Farmers ' demand for land: Q = 50 - р. The increased demand for food increased the demand for land to Q = 100 - р.Determine how much the land rent has increased if the bank interest rate has decreased from 10% per annum to 5% per annum, and the fee for invested capital and depreciation charges have not changed.
- Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers. The number of people at the most common ages for home-buying increases. People gain confidence that the economy is growing and that their jobs are secure. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.Hanna Corporation markets a compact microwave oven. In 2010 they sold 23,000 units at $375 each. Per capita disposable income in 2010 was $6,750. Hanna economists have determined that the arc price elasticity for this microwave oven is −1.2. Which the following statement is wrong? 1. A price decrease in 2011 will help company revenue growth 2. If all other things remain equal, sales volume for 2011 are 27,312 if price is reduced to 325. 3. Assume that arc income elasticity for microwave ovens is 2.5 and price and income effects are independent and additive. Given that the price is reduced to $325, and that per capita disposable income increases to $7,000, sales volume for 2011 will be 29,032. 4. A price increase in 2011 will help company revenue growth.Consider the following demand and supply function of product ZT: Qd = 25 - 1.25 P Qs = -9 + 3 P Note: Determine the equilibrium point first to answer the following question. 7. How much is the change in the price for the consumer, when additional sales tax is 0.85 per unit? Use a number, 2 decimal values, no commas, no space, no signs. * 8. How much is the buying price when sales tax is imposed? Use a number, 2 decimal values, no commas, no space, no signs. *
- Which of the following statements regarding the Hotelling rent is current? a. It reflects the opportunity cost of extracting the resource today instead of in the future.b. It is the reason that price is equal to marginal cost in the dynamic efficiency model.c. It reflects market power. d. It is the reason that price is lower than marginal cost in the dynamic efficiency model.Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers. The number of people at the most common ages for home-buying increases.Discuss the impact of the increase in government taxes on investment in the long run.