Question 1

What is the payment to land as a factor of production called?

Accepted Answer

A)   wage
B)   rent
C)   interest
D)   profitE) C) and D)
F) B) and C)

Question 2

A firm seeks an internal rate of return of at least 9%. Would it make sense for the firm to spend $10,000 today on a piece of equipment that will allow it to bring in $5,600 of additional revenue in each of the next two years?

Accepted Answer

A)   Yes, because the rate of return exceeds 9%.
B)   Yes, because the rate of return is exactly the desired 9%.
C)   No, because the rate of return is less than 9%.
D)   It is impossible to determine with the information given.E) A) and B)
F) A) and C)

Question 3

People with high discount rates are more likely to pursue doctoral degrees than people with low discount rates.

Accepted Answer

A) True 
 B)False

Question 4

If, at the same time that the demand for human capital decreases, there is also an increase in the supply of funds for human capital investment, interest rates and the cost of investment _____, and the investment in human capital _____.

Accepted Answer

A)   decrease; decreases
B)   decrease; increases
C)   decrease; may rise, fall, or stay the same
D)   may rise, fall, or stay the same; increasesE) A) and D)
F) A) and C)

Question 5

According to studies on the rate of return of a college education, college graduates earn, on average, 5% more per year than high school graduates.

Accepted Answer

A) True 
 B)False

Question 6

Academic studies have found that the economic returns to education are

Accepted Answer

A)   large and negative.
B)   large and positive.
C)   small and negative.
D)   small and positive.E) All of the above
F) A) and D)

Question 7

Suppose that employment processes change so that more human capital is required for a given task. The _____ for human capital will shift right, and the rate of return will _____.

Accepted Answer

A)   demand; decrease
B)   demand; increase
C)   supply; decrease
D)   supply; increaseE) A) and B)
F) All of the above

Question 8

Miguel and Carmin are both 30 years old and both have bachelor's degrees in business. They are both students of an IT certification program to improve their computer skills. Miguel is unemployed and is paying the tuition for the certificate program. Carmin's employer, however, is covering her tuition and she is able to attend the program during her work hours. Which statement is TRUE regarding their rates of return on the investment in human capital?

Accepted Answer

A)   Carmin's personal rate of return will be higher than Miguel's, since her employer is paying for her tuition and her time during the training.
B)   Miguel's personal rate of return will be higher, since he is sacrificing more to gain the training.
C)   Their personal rates of return will be equal, since they have nearly the same skills entering the training program and will leave the program with the same skills.
D)   Carmin's rate of return will be higher than Miguel's because both she and her employer will benefit from her training, while Miguel is the only potential beneficiary from his training, even if he is employed at a later date.E) A) and C)
F) A) and D)

Question 9

Education and training for the purpose of increasing productivity is called investment in human capital.

Accepted Answer

A) True 
 B)False

Question 10

Which of these would NOT be an investment in human capital?

Accepted Answer

A)   college tuition
B)   on-the-job training
C)   accepting lower wages during an apprenticeship
D)   operating a day-care centerE) All of the above
F) B) and D)

Question 11

For an economy to successfully grow through innovation, which of these is NOT needed?

Accepted Answer

A)   potential failures and bankruptcies
B)   guaranteed returns to induce entrepreneurs to accept risks
C)   avenues for innovative entrepreneurs to gain financing
D)   occurrence of changeE) A) and C)
F) All of the above

Question 12

In economics, the reward earned by entrepreneurship is called profit.

Accepted Answer

A) True 
 B)False

Question 13

If someone offers to pay you $1,200 in three years at the going interest rate of 4%, what is the present value for this future payment?

Accepted Answer

A)   $1,066.80
B)   $1,109.47
C)   $1,153.85
D)   $3,000.00E) A) and B)
F) A) and C)

Question 14

Describe the process for computing an investment's rate of return. Include the formula and a discussion of the relevant interest rate in your explanation.

Accepted Answer

An alternative approach to determining w...

Question 15

Google's first source of funding included $100,000 from a college professor.

Accepted Answer

A) True 
 B)False

Question 16

According to the concept of present value, $5,250 today is worth less than the sum of $5,250 in one year.

Accepted Answer

A) True 
 B)False

Question 17

Investment in education and training is called investment in

Accepted Answer

A)   sunk costs.
B)   internal rate of return.
C)   human capital.
D)   fixed costs.E) None of the above
F) C) and D)

Question 18

The goal of investment in human capital is to increase labor's

Accepted Answer

A)   inputs.
B)   opportunity.
C)   productivity.
D)   quantity.E) A) and B)
F) A) and C)

Question 19

Profits are BEST described as the rewards that are earned for _____ to produce products.

Accepted Answer

A)   combining resources and assuming the risk
B)   combining resources and lowering the cost
C)   lowering costs and assuming the risk
D)   combining risk and assuming the cost to produceE) A) and C)
F) A) and D)

Question 20

Industrial agglomeration occurs because of which economic phenomenon?

Accepted Answer

A)   economies of scale
B)   diminishing marginal utility
C)   increasing marginal costs
D)   diseconomies of scaleE) C) and D)
F) None of the above

Exam 12: Land, Capital Markets, and Innovation

The goal of investment in human capital is to increase labor's

Correct Answer
verified

In economics, the reward earned by entrepreneurship is called profit.

Correct Answer
verified

A firm seeks an internal rate of return of at least 9%. Would it make sense for the firm to spend $10,000 today on a piece of equipment that will allow it to bring in $5,600 of additional revenue in each of the next two years?

Correct Answer
verified

Investment in education and training is called investment in

Correct Answer
verified

Google's first source of funding included $100,000 from a college professor.

Correct Answer
verified

Correct Answer
verified

People with high discount rates are more likely to pursue doctoral degrees than people with low discount rates.

Correct Answer
verified

For an economy to successfully grow through innovation, which of these is NOT needed?

Correct Answer
verified

If, at the same time that the demand for human capital decreases, there is also an increase in the supply of funds for human capital investment, interest rates and the cost of investment _, and the investment in human capital _.

Correct Answer
verified

Academic studies have found that the economic returns to education are

Correct Answer
verified

Industrial agglomeration occurs because of which economic phenomenon?

Correct Answer
verified

Suppose that employment processes change so that more human capital is required for a given task. The _ for human capital will shift right, and the rate of return will _.

Correct Answer
verified

According to studies on the rate of return of a college education, college graduates earn, on average, 5% more per year than high school graduates.

Correct Answer
verified

According to the concept of present value, $5,250 today is worth less than the sum of $5,250 in one year.

Correct Answer
verified

Describe the process for computing an investment's rate of return. Include the formula and a discussion of the relevant interest rate in your explanation.

Correct Answer
verified
An alternative approach to determining w...
View Answer

If someone offers to pay you $1,200 in three years at the going interest rate of 4%, what is the present value for this future payment?

Correct Answer
verified

Profits are BEST described as the rewards that are earned for _____ to produce products.

Correct Answer
verified

Which of these would NOT be an investment in human capital?

Correct Answer
verified

What is the payment to land as a factor of production called?

Correct Answer
verified

Education and training for the purpose of increasing productivity is called investment in human capital.

Correct Answer
verified

Exam 12: Land, Capital Markets, and Innovation

The goal of investment in human capital is to increase labor's

Correct AnswerverifiedShow Answer

In economics, the reward earned by entrepreneurship is called profit.

Correct AnswerverifiedShow Answer

A firm seeks an internal rate of return of at least 9%. Would it make sense for the firm to spend $10,000 today on a piece of equipment that will allow it to bring in $5,600 of additional revenue in each of the next two years?

Correct AnswerverifiedShow Answer

Investment in education and training is called investment in

Correct AnswerverifiedShow Answer

Google's first source of funding included $100,000 from a college professor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

People with high discount rates are more likely to pursue doctoral degrees than people with low discount rates.

Correct AnswerverifiedShow Answer

For an economy to successfully grow through innovation, which of these is NOT needed?

Correct AnswerverifiedShow Answer

If, at the same time that the demand for human capital decreases, there is also an increase in the supply of funds for human capital investment, interest rates and the cost of investment _____, and the investment in human capital _____.

Correct AnswerverifiedShow Answer

Academic studies have found that the economic returns to education are

Correct AnswerverifiedShow Answer

Industrial agglomeration occurs because of which economic phenomenon?

Correct AnswerverifiedShow Answer

Suppose that employment processes change so that more human capital is required for a given task. The _____ for human capital will shift right, and the rate of return will _____.

Correct AnswerverifiedShow Answer

According to studies on the rate of return of a college education, college graduates earn, on average, 5% more per year than high school graduates.

Correct AnswerverifiedShow Answer

According to the concept of present value, $5,250 today is worth less than the sum of $5,250 in one year.

Correct AnswerverifiedShow Answer

Describe the process for computing an investment's rate of return. Include the formula and a discussion of the relevant interest rate in your explanation.

Correct AnswerverifiedAn alternative approach to determining w...View AnswerShow Answer

If someone offers to pay you $1,200 in three years at the going interest rate of 4%, what is the present value for this future payment?

Correct AnswerverifiedShow Answer

Profits are BEST described as the rewards that are earned for _____ to produce products.

Correct AnswerverifiedShow Answer

Which of these would NOT be an investment in human capital?

Correct AnswerverifiedShow Answer

What is the payment to land as a factor of production called?

Correct AnswerverifiedShow Answer

Education and training for the purpose of increasing productivity is called investment in human capital.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

If, at the same time that the demand for human capital decreases, there is also an increase in the supply of funds for human capital investment, interest rates and the cost of investment _, and the investment in human capital _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Suppose that employment processes change so that more human capital is required for a given task. The _ for human capital will shift right, and the rate of return will _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
An alternative approach to determining w...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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