A . What will happen to rents earned by landowners if population grows? Why? b. Will population growth ensure rents for all landowners? Explain
a . An increase in the population will shift the demand curve for land to the right, increasing the rents
earned by landowners.
b. Growth will not necessarily ensure rents for all. If the supply price of land is not everywhere $0, then
differential land rents will emerge. The market price for land will be determined by the intersection of
the supply and demand curves for land. Landowners whose supply price is below this market price will
earn rent equal to the difference between these two prices. Landowners whose supply price is equal to
the market price will not earn rent.
You might also like to view...
An increase in labor demand accompanied by a decline in labor supply cannot result in a decline in wages.
Answer the following statement true (T) or false (F)
Government savings, , is equal to
A) T - G. B) T + G. C) T = G. D) T + G - I. E) T - G = I.
In the liquidity trap case where the LM schedule is nearly horizontal,
a. both monetary and fiscal policy are highly effective. b. monetary and fiscal policy are ineffective. c. monetary policy is ineffective and fiscal policy is effective. d. fiscal policy is ineffective and monetary policy is effective.
In an uncertain world, private investors
a. always make decisions that lead to economic profit. b. never make decisions that generate economic losses. c. sometimes make decisions that lead to economic losses. d. rarely invest in human capital.