Question 1

Carrying capacity is defined as:

Accepted Answer

A)   the quantity of an exhaustible natural resource that can be consumed in any period without reducing the stock of the resource available to the next period.
B)   the amount of fish a lake can carry without increasing or decreasing the rate of increase or decrease in the stock of fish.
C)   the quantity of a renewable natural resource that can be consumed in any period without reducing the stock of the resource available to the next period.
D)   None of the above are correct.E) All of the above
F) B) and C)

Question 2

The only thing that can cause a noticeable shift in the demand curve for capital is technological change.

Accepted Answer

A) True 
 B)False

Question 3

A decrease in the interest rate, all other things unchanged, ________ the supply of an exhaustible natural resource and ________ the current price of the resource.

Accepted Answer

A)   increases; increases
B)   increases; decreases
C)   decreases; increases
D)   decreases; decreasesE) A) and C)
F) A) and B)

Question 4

Lenders are consumers or firms that are _______ to _______ some _______ use of their funds to have _______ funds available in the future.

Accepted Answer

A)   willing; forgo; current; more
B)   unwilling; forgo; future; less
C)   willing; borrow; current; more
D)   unwilling; forgo; current; moreE) B) and C)
F) None of the above

Question 5

A bond is essentially the same thing as a stock.

Accepted Answer

A) True 
 B)False

Question 6

Changes in the ________ for (of)  capital affect the ________ market and changes in the ________ affect ________ capital.

Accepted Answer

A)   demand; loanable funds; loanable funds; demand curve for
B)   demand; loanable funds; loanable funds; the quantity demanded of
C)   supply; labor; labor; the quantity demanded of
D)   None of the above are correct.E) B) and C)
F) A) and B)

Question 7

Payments that are distributed over time are linked to one another by:

Accepted Answer

A)   the use of prices.
B)   monetary units.
C)   interest rates.
D)   computers.E) A) and D)
F) A) and C)

Question 8

Liabilities are:

Accepted Answer

A)   the sum of all your assets.
B)   anything of value.
C)   obligations to make future payments.
D)   a payment made to people who postpone the use of their wealth.E) None of the above
F) C) and D)

Question 9

An individual's wealth:

Accepted Answer

A)   is the income made during a specific time period.
B)   is always considered before taxes are paid.
C)   is the sum of all assets minus liabilities.
D)   is described by all of the above.E) A) and C)
F) A) and D)

Question 10

The total of assets less liabilities is:

Accepted Answer

A)   wealth.
B)   profit.
C)   insurance.
D)   depreciation.E) All of the above
F) A) and D)

Question 11

Given the special characteristics of capital:

Accepted Answer

A)   it is not a factor of production.
B)   it is still a factor of production.
C)   the concepts of MRP and MFC cannot be used in regard to capital.
D)   none of the above are true.E) None of the above
F) B) and D)

Question 12

Unlike the supply of loanable funds, the demand for capital is unrelated to the interest rate.

Accepted Answer

A) True 
 B)False

Question 13

The desire for more capital:

Accepted Answer

A)   means a desire for more loanable funds.
B)   means a desire for less loanable funds.
C)   is not relevant to the demand for loanable funds.
D)   none of the above is true, since capital and loanable funds are the same thing.E) C) and D)
F) A) and D)

Question 14

-(Exhibit: The Demand Curve for Capital)  The demand curve for capital would shift to the right if:

Accepted Answer

A)   the labor force increased.
B)   the price of labor rises.
C)   the marginal product of capital falls.
D)   All of the above are true.E) A) and D)
F) B) and C)

Question 15

A decrease in the demand for loanable funds, all other things unchanged, will ________ the interest rate.

Accepted Answer

A)   not change
B)   increase
C)   decrease
D)   not affectE) A) and C)
F) B) and C)

Question 16

Which of the following is (are)  true?

Accepted Answer

A)   Interest rates can be used to compare values of payments that will occur at different times.
B)   Choices concerning capital and natural resources do not involve the use of interest rates.
C)   The concept of present value cannot be applied to a series of future payments.
D)   A and B are true.E) C) and D)
F) B) and C)

Question 17

A profit-maximizing firm uses additional units of a factor of production until ________ equals _______ .

Accepted Answer

A)   MR; MC
B)   MRP; MP
C)   MP; MR
D)   MRP; MFCE) B) and C)
F) A) and B)

Question 18

Saving is income not spent on consumption.

Accepted Answer

A) True 
 B)False

Question 19

Using slightly different notation than in the text, we could say that the present value (PV)  of a payment n years in the future (FV) , given interest rate (r) , is given by the equation:

Accepted Answer

A)   PV = FVn.
B)   PV = 1 ÷ FVn.
C)   PV = FV ÷ (1 + r) .
D)   PV = FV ÷ (1 + r) n.E) C) and D)
F) B) and C)

Question 20

An addition to the capital stock is:

Accepted Answer

A)   net present value.
B)   dissaving.
C)   saving.
D)   investment.E) A) and B)
F) A) and C)

Exam 13: Positive Externalities and Public Goods

An individual's wealth:

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The only thing that can cause a noticeable shift in the demand curve for capital is technological change.

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Liabilities are:

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Which of the following is (are) true?

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Lenders are consumers or firms that are _______ to _______ some _______ use of their funds to have _______ funds available in the future.

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The total of assets less liabilities is:

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-(Exhibit: The Demand Curve for Capital) The demand curve for capital would shift to the right if:

Correct AnswerverifiedShow Answer

Payments that are distributed over time are linked to one another by:

Correct AnswerverifiedShow Answer

A decrease in the interest rate, all other things unchanged, ________ the supply of an exhaustible natural resource and ________ the current price of the resource.

Correct AnswerverifiedShow Answer

An addition to the capital stock is:

Correct AnswerverifiedShow Answer

Using slightly different notation than in the text, we could say that the present value (PV) of a payment n years in the future (FV) , given interest rate (r) , is given by the equation:

Correct AnswerverifiedShow Answer

A bond is essentially the same thing as a stock.

Correct AnswerverifiedShow Answer

Saving is income not spent on consumption.

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Carrying capacity is defined as:

Correct AnswerverifiedShow Answer

Changes in the ________ for (of) capital affect the ________ market and changes in the ________ affect ________ capital.

Correct AnswerverifiedShow Answer

A decrease in the demand for loanable funds, all other things unchanged, will ________ the interest rate.

Correct AnswerverifiedShow Answer

Given the special characteristics of capital:

Correct AnswerverifiedShow Answer

Unlike the supply of loanable funds, the demand for capital is unrelated to the interest rate.

Correct AnswerverifiedShow Answer

The desire for more capital:

Correct AnswerverifiedShow Answer

A profit-maximizing firm uses additional units of a factor of production until ________ equals _______ .

Correct AnswerverifiedShow Answer

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Lenders are consumers or firms that are ___ to _ some _ use of their funds to have ___ funds available in the future.

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A decrease in the interest rate, all other things unchanged, the supply of an exhaustible natural resource and the current price of the resource.

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Changes in the for (of) capital affect the market and changes in the affect capital.

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A profit-maximizing firm uses additional units of a factor of production until __ equals _ .

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