-Refer to the Figures Above to Answer This Question

question 50

Multiple Choice

-Refer to the figures above to answer this question. Figure B represents the market for ________ because ________, all else held the same.

• A) land; the Hotelling Principle states rental rates will increase predictably over time
• B) capital; as the rental rate increases, the quantity of capital supplied increases and the quantity of capital demanded decreases
• C) land; landowners respond to higher rental rates by making more land available
• D) capital; the Hotelling Principle predicts that prices will vary inversely with the interest rate
• E) a nonrenewable resource; as the interest rate increases, less of the resource is supplied

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Definitions:

Thermostat

A device that automatically regulates temperature or turns systems on or off when the temperature reaches a certain point.

Affirming the Antecedent

A valid form of deductive reasoning in which the truth of the first premise guarantees the truth of the conclusion (If P, then Q. P, therefore Q).

Price Quote

A formal statement or estimate given by a seller to a potential buyer detailing the price for goods or services offered.