Natural resources such as gold and iron ore are examples of: A) Entrepreneurship

Question

Natural resources such as gold and iron ore are examples of:
A) Entrepreneurship.
B) Labor.
C) Land.
D) Capital.

Is it C or D?

If Good X is an inferior good, then the income elasticity of Good X will be:
A) Negative.
B) Equal to one.
C) Positive.
D) Equal to zero.

Is it C?

You are given a choice of receiving $1,000 today or $1,100 one year from today. If the current market rate of interest is 12% (that is, you could earn 12% on your investments today), which option should you choose to get the highest present value?
A) Either option (the $1,000 today or the $1,100 one year from today) since the present values of the two options are the same.
B) The $1,000 today.
C) The future payment of $1,100 one year from today.
D) Not enough information is provided to determine which option provides the highest present value.

Is it A or B?

Statement 1: In a perfectly competitive market, the individual firm's demand curve is horizontal at the market price, Pe, and the market demand curve is downward sloping. Statement 2: For the perfectly competitive firm, the firm's individual demand curve is the same as its marginal revenue curve.
A) Both statements 1 and 2 are false.
B) Both statements 1 and 2 are true.
C) Statement 1 is false; statement 2 is true.
D) Statement 1 is true; statement 2 is false.

D?

An upward sloping supply curve of labor suggests that:
A) The income effect outweighs the substitution effect.
B) There is no substitution effect.
C) The substitution effect outweighs the income effect.
D) The income and substitution effects exactly offset each other.

C?

Under the flexible exchange rate system, exchange rates:
A) Are determined by the interaction of demand and supply in foreign exchange markets.
B) Are set by each country's government.
C) Are fixed by investors in foreign exchange markets.
D) Are rarely used in foreign exchange transactions.

Is it A?

Suppose the demand for garbage pickup is very elastic. The government imposes a tax on garbage pickup services. Who will pay the greater share of the tax?
A) Government.
B) Everyone pays equally.
C) Owners of garbage pickup services.
D) Creators of the garbage.

Is it C?

Explanation / Answer

1. C) Land.

2. A) Negative.

3. B) The $1,000 today.

4. B) Both statements 1 and 2 are true.

5. C) The substitution effect outweighs the income effect.

6. A) Are determined by the interaction of demand and supply in foreign exchange markets.

7. C) Owners of garbage pickup services.

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