Suppose acre A is located at the market with zero transport costs of bringing its radishes to market. It costs acre B, located 20 miles away, $500 to transport its radishes to market. If demand for radishes is large enough so that both acres will be used to produce radishes,
a. the owner of acre A will earn zero location rent
b. the owner of acre B will earn location rent of $500
c. the owners of acres A and B will earn combined location rents of $1,000
d. as long as one acre is located at the market, neither landowner of acre A nor B will earn location rent
e. the owner of acre A will earn a location rent of $500
E
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If Cassie's Coffee House purchases 42 cents worth of ingredients and spends 28 cents on wages per cup of coffee to produce an 89 cent cup of coffee, then Cassie's Coffee House's value added per cup of coffee is
A) 19 cents. B) 28 cents. C) 47 cents. D) 61 cents.
Serafina was earning $75 per hour and working 50 hours per week. Serafina's wage rose to $90 per hour, and as a result, she now works 60 hours per week
What can you conclude from this information about the income effect and the substitution effect of a wage change for Serafina?
Which of the following is NOT a mechanism the HPAE used to share wealth across all layers of society?
A) significant investments in rural infrastructure B) free public education C) tax policies that strongly redistributed income from rich to poor D) land reform
Other things being equal, which of the following would increase the market demand for labor?
A. A decrease in the cost-effectiveness of labor relative to other inputs. B. A decrease in the market demand for the firm's output. C. A fall in the wage rate. D. An increase in the marginal productivity of labor.