Mary Owns a Farm

question 39

Multiple Choice

Mary owns a farm. She has the right to use it for any legal purpose but must grow a certain quantity of wheat on it every year. If she fails to grow this quantity of wheat, her right to that land terminates. Which of the following interests in real property does Mary have?

• A) easement
• B) conditional estate
• C) life estate
• D) fee simple absolute

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Definitions:

Marginal Cost Curve

A graph that shows the cost of producing one more unit of a good or service at each level of production.

Average Variable Cost

The cost per unit of varying inputs in the production process, calculated by dividing total variable costs by the quantity of output produced.

Economic Profits

Profits calculated by subtracting total explicit and implicit costs from total revenues; measures the excess over both the opportunity cost of capital and the wages that business owners could have earned elsewhere.

Marginal Cost

The escalation in total expenses incurred from the production of an additional unit of a product or service.