According to David Ricardo's explanation of land rent, what happens when the demand for land increases?
A) The supply curve shifts to the right just enough to keep the price per acre constant.
B) Revenues to owners of land increase but economic rent declines.
C) The amount of economic rent stays constant, constrained by a perfectly inelastic supply curve.
D) Both revenues to owners of land and economic rent increase.
Answer: D
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Figure 42.2
A. Q1. B. Q2. C. Qa. D. Qb.
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