If a Factor of Production Has No Production Cost and Has

question 120

Multiple Choice

If a factor of production has no production cost and has a fixed supply, then payments to that factor constitute what economists call

• A)abnormal profits.
• B)economic rent.
• C)normal profits.
• D)interest payments.

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Definitions:

Physical Property

An attribute of a physical system or body; commonly refers to properties like mass, volume, and density that can be observed and measured without changing the substance itself.

Personal Property

Any movable property that is not attached to real estate; includes both tangible and intangible items.

Fee Simple Absolute

Ownership rights entitling the holder to use, possess, or dispose of the property however he or she chooses during his or her lifetime.

Ownership Limitations

Restrictions or constraints on the rights of owning property, which may be imposed by law, regulations, or agreements.