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Question
The Hawaiian island of Lanaʹi is privately owned by Castle & Cooke and for generations most of its land was used to grow pineapples. Now, many of the pineapple fields have been replaced by tourist accommodations, including a pair of world-class hotels and a top rated golf course. What would an economist say about this change in land -use patterns?
A) While growing pineapples used the islandʹs land more efficiently, tourism provides utility to the largest number of people.
B) Economic rent has allocated the islandʹs resources to their highest valued use: tourism.
C) Agriculture is still the landʹs highest-valued and most efficient use, but tourism earns more profits for Castle & Cooke.
D) To find the landʹs economic rent, add the price per acre that land on Lanaʹi would be worth if used to grow pineapples to the value per acre when used for a golf course.
Answer
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