What explains differences in the economic rent charged for two plots of 500 acres of land that are used for growing corn and located in the same county of a state?
What will be an ideal response?
Land differs in quality and this difference can lead to differences in productivity. The soil on one plot of land might be better than on another plot of land, thereby increasing the yield per acre on that plot over the other plot of land. These productivity differences will lead to differences in the demand for the two plots of land. Since demand is the only determinant of land rent, the differing demands will lead to different rents. There may also be location considerations that may make one plot of land more attractive than another plot of land, and these preferences get expressed in the demand for each plot of land.
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What happens to the money supply when the Fed sells government bonds?
A) The money supply tends to rise. B) The money supply tends to fall. C) Nothing. D) It's impossible to determine, because bonds aren't money.
Private costs of an economic activity exceed social cost when external benefits are created
a. True b. False Indicate whether the statement is true or false
For a bank to earn as much profit as possible, its excess reserves should be:
A. equal to its required reserves. B. as small as possible. C. less than its vault cash. D. growing at a constant rate.
Real standards of living can only go up with positive economic growth.
What will be an ideal response?