Understanding Economics

Lesson 4: The Dynamics of Wealth Distribution

Please read chapters 19 - 21.

1. What are the changes which contribute to material progress?           | Text |

2. Rent is increased by            | Text |

a. increased population.
b. increased productivity.
c. investment in transportation and communication.
d. successful pro sports franchises.
e. all of the above.
3. What is the effect of increase of population on the productive power of labor?            | Text |

4. What does increasing population do to the margin of production?            | Text |

5. How can increasing population raise rent as a quantity without decreasing wages and interest as quantities?            | Text |

6. The most important effect of labor-saving inventions is            | Text |

a. to erode the gains made by labor unions.
b. to make low-wage foreign workers more competitive.
c. to give consumers more leisure time.
d. to allow the same number of workers to produce more wealth.
e. to decrease the wages of skilled workers.
7. What is the effect of labor-saving inventions on total production? On the demand for land?            | Text |

8. What is the effect on rent of governmental expenditures on roads, drainage, irrigation, bridges, the internet, etc.? Offer an example.           | Text |

9. Landowners contribute to increased land value by            | Text |

a. erecting buildings on their land.
b. making decisions about when to put land to use.
c. nothing at all; they don't contribute to land value.
d. advocating for protecting the local environment.
10. To what is the increase in land value mainly due?            | Text |

11. Increased overall production always

a. moves the margin of production toward the center.
b. allows the government to balance its budget.
c. leads to higher inflation.
d. increases rent more quickly than wages and interest.
e. follows federal tax cuts.
12. As society advances, what becomes the most important factor that determines the value of land?            | Supplement |