1) Resource owners will supply additional units of a resource as long as doing s

Question

1) Resource owners will supply additional units of a resource as long as doing so

a. decreases their opportunity cost

b. increases their income

c. increases their utility

d. decreases their income taxes

2) The demand for a resource is derived from the demand for the final product it helps to produce.

a. True

b. False

3) If the price of a resource falls, other things constant,

a. demand for the product it produces will increase

b. demand for a substitute product will increase

c. demand for a substitute resource will fall

d. supply of that resource will rise

4) The market demand curve for a resource is the

a. horizontal sum of the demand curves for that resource in all its various uses

b. difference among the demand curves for that resource in all its various uses

c. demand for that resource in its best use

d. sum of the demand curves for that resource in its best two uses

5) One determinant of the derived demand for a resource is the

a. price of the product made using the resource

b. extra cost of the resource

c. marginal resource cost of the resource

d. availability of the resource in the marketplace

6) Resource price differentials that do not trigger the reallocation of resources are known as

a. temporary differentials

b. market differentials

c. conditional differentials

d. permanent differentials

7) The fewer alternative uses a resource has,

a. the greater the proportion of its earnings that is economic rent

b. the smaller the proportion of its earnings that is economic rent

c. the more elastic its supply

d. the more elastic its demand

8) Economic rent is defined as

a. the opportunity cost of a resource

b. the payment to a resource in excess of its opportunity cost

c. opportunity cost

d. total earnings

9) A firm

Explanation / Answer

1.a 2.d 3.c 4.b 5.a 6.c 7.d 8.a 9.c 10.c 11.a 12.b 13.c 14.b 15.a

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