Describe the process by which the market for capital and the market for land reach equilibrium. As part of your description, elaborate on the role of the stock of the resource versus the flow of services from the resource
Equilibriums in the markets for land and capital are governed by the value of marginal product for these factors relative to their supply. One difference between these markets and the market for labor is that in land and capital markets there is both a rental value (flow) and purchase price (stock). The difference between the rental value and purchase price is reconciled by noting that in efficient markets, the purchase price should reflect the value of the stream of services provided by the land or capital (or the sum of rental values appropriately discounted).
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In economics, a negotiator who hopes to get an unusually large amount of money for land by refusing to come to terms is called a(n)
A) entrepreneur. B) lobbyist. C) holdout. D) socialist.
Over the past decade, the demand for goods produced in China has brought a sustained increase in demand for China's exports that has out-stripped the growth of supply. As a result, China has experienced a _______
A. period of stable prices and sustained economic growth B. rising price level and demand-pull inflation C. rising price level and cost-push inflation D. rising price level and a falling real wage rate
The cost of unemployment to society includes the loss of the goods and services that might have been produced if the unemployed had been employed
a. True b. False Indicate whether the statement is true or false
Which of the following is a stock variable?
a. Saving b. Consumption c. Income d. Investment e. Money