Author Question: Under what circumstances will the economic rent earned by a factor of production always be zero? ... (Read 28 times)

leilurhhh · **on:** Jul 1, 2018

Under what circumstances will the economic rent earned by a factor of production always be zero?

A) Infinitely inelastic supply curve
B) Infinitely elastic supply curve
C) Somewhat inelastic supply curve
D) Elastic demand curve

Question 2

Suppose the demand for gourmet coffee can be represented by a linear demand curve. At the prevailing market price the income elasticity of demand for gourmet coffee is 2. When income rises the demand curve for gourmet coffee:

A) becomes less elastic at every price.
B) becomes less elastic at the price that prevailed before the change in income
C) becomes more elastic at every price
D) becomes more elastic at the price that prevailed before the change in income