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Question
According to Ricardoʹs 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
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Related questions
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Assume that coffee and tea are substitutes. Given a downward sloping demand curve for tea, an increase in the price of tea will causeA) an increase in the demand for coffee. B) a decrease in the demand for coffee.C) a leftward shift of the demand curve for tea. D) a leftward shift in the demand for coffee.
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The United Statesʹ balance of payments is likely to improve whenA) there is an increase in political instability in other countries.B) the inflation rate in the United States rises relative to other countries.C) the American government increases its spending on foreign aid. D) American people want to invest more in foreign countries.