ECON 2 Lecture Notes - Lecture 22: Marginal Revenue Productivity Theory Of Wages, Loanable Funds, Demand Curve

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magentamuskrat366

9 Aug 2020

School

Irvine Valley College

Department

Economics

Course

ECON 2

Professor

Collinson

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Document Summary

Economic rent: payment made for a resource such as land which is fixed in total supply. Quasi rent: any payment to a resource above the amount it can receive in its next best use. Perfectly inelastic supply: the quantity supplied does not change in response to a change in price. Interest: the price paid for use of borrowed money. Loanable funds: funds are made available for lending and borrowing by savers. Present value: the current worth of future income or savings. Present value table: a table that provides the present value of a dollar in the future at different interest rates. Annuity table: a table that provides a present value of a constant income stream for a given number of years. There are four main categories of income: wages, economic rent, interest, profit. When economists use the term "rent", they are talking about payments made for a factor of production, such as land, that is fixed in total supply.

Related Questions

34-Efforts by a union representative to organize a union are protected from employer interference by the: a.Taft-Hartly Act. b.Landrum-Griffin Act. c.Norris-La Guardia Act d.Sherman Act e.Wagner Act 35.The negotiations between union and management over wages and working conditions is known as: a.Union-shop bargaining b.Arbitration c.Disinterested mediation d.Labor relations e.Collective bargaining 36.Rent, interest, and profit are forms of: a.Bookkeeping income b.Property income c.Nonproductive income d.Surplus income e.Fixed income 37.The value of an asset such as bond will rise when: a.Interest rates rise b.Interest rates fall c.The price of bonds falls d.The supply of loanable funds decrease e.The demand for loanable funds increase 38.Accounting profits differ firm the economistâs concepts of profits because accounting profits: a.Fall less rapidly during recession b.Are excluded from calculations for the national income c.Are corrected for differences in the quality of management provided by owners d.Are measured in a way that does not fully reflect the opportunity costs of firms resources e.Vary among industries whereas economic profits are the same among all industries 39.Profits as a consequences of exploitation of labor and the appropriation of laborâs surplus value is a theory closely associated with: a.Karl Marx b.Henry George c.William Lorenz d.Thomas Malthus e.Joseph Schumpeter 40.Our usury laws stemmed from the idea that: a.Interest represents labor surplus appropriated by business b.Interest rates are not prices and therefore not subject to the laws of supply and demand c.Money is a medium of exchange and not a store of value d.Money is an asset which is fixed in supply e.Charging someone for the use of money is evil.

magentamuskrat768

TRUE OR FALSE

1) Economists use the term capital to describe that factor of production that includes human-made resources such as factories, buildings, machinery, and tools.

2) A change in the price of hamburgers will shift the supply curve for hot dogs

3) If the price of hamburger rises, we would expect the demand for the steak to shift to the right.

4) An increase in real consumer income will shift both the supply and demand curves.

5) Rent controls encourage investment in housing because they bring stability to the market.

6) Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.

7) If aggregate demand keeps shifting rightward month after month and aggregate supply remains constant, the economy will experience a recession.

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QUESTION 16

Which of the following statements is true?

		The administrative costs per dollar are greater for a large loan than a small loan.
		The risk on a long-term loan is likely to be less than on a short-term loan, ceteris paribus.
		a and b
		none of the above

1 points

QUESTION 17

If the price for loanable funds is less than the return on capital, then firms will

		borrow in the loanable funds market and invest in capital goods, and as this happens, the quantity of capital decreases and its return rises.
		borrow in the loanable funds market and invest in capital goods, and as this happens, the quantity of capital increases and its return falls.
		not borrow in the loanable funds market, and over time the capital stock will decrease and the return on capital will fall.
		not borrow in the loanable funds market, and over time the capital stock will decrease and the return on capital will rise.

1 points

QUESTION 18

Economic rent is

		the payment a renter pays his or her landlord.
		payment in excess of fixed costs.
		payment in excess of opportunity costs.
		the same as interest if we are discussing a capital good purchase.
		none of the above

1 points

QUESTION 19

Suppose a bank makes a $1,000 loan to you at 5 percent interest when the expected and actual inflation rate are zero percent. Before you pay back the $1,000 principal and $50 interest, the inflation rate increases to 10 percent. Does anyone lose from this situation?

		Nobody loses, because the terms were set before the inflation rate increased, and once the terms are set, inflation does not affect the situation.
		You lose, because the dollars that you have borrowed are worth more the higher the inflation rate.
		The banker loses, because you will be paying back the loan with dollars that are worth less than the dollars you borrowed.
		Both the banker and you lose, for the reasons in answers b and c.
		There is not enough information to answer the question.

1 points

QUESTION 20

A change in the expected rate of inflation from 5 percent to 3 percent will

		decrease the real interest rate by 2 percentage points.
		decrease the real interest rate by 3 percentage points.
		increase the nominal interest rate by 2 percentage points.
		decrease the nominal interest rate by 2 percentage points.

ECON 2 Lecture Notes - Lecture 22: Marginal Revenue Productivity Theory Of Wages, Loanable Funds, Demand Curve

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