The rent earned on marginal land is
A. zero.
B. the average of all qualities of land.
C. above the average of all qualities of land.
D. below the average of all qualities of land.
Answer: A
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Johnny Deer exclusively grew corn in each of the past three years. Under the Food, Conservation, and Energy Act of 2008, Deer:
A. must grow corn in the current year in order to receive direct payments from the federal government. B. can grow whatever crop he wants to in the current year but will only receive direct payments from the federal government if the price of corn falls below a targeted price. C. will receive countercyclical payments if the price of corn falls below a targeted price, even though he does not grow corn in the current year. D. must grow something other than corn to qualify for direct payments from the federal government.
A decrease in which of the following would decrease the tax wedge?
A) marginal tax rate B) money supply C) national debt D) federal budget deficit