The concept of economic rent is associated with the British economist David Ricardo (1772-1823). Ricardo analyzed economic rent for land. Which of the following is FALSE with respect to determining land rent?
A) The supply curve for land is vertical (perfectly inelastic).
B) Rent is payment for a resource above its opportunity cost.
C) Payment for a resource below its opportunity cost is rent.
D) Ricardo assumed the quantity of land in a country is fixed.
Answer: C
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Refer to Figure 15-7. Suppose the economy is in a recession and the Fed pursues an expansionary monetary policy. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) A to E. B) A to B. C) B to C. D) C to B. E) C to D.
Suppose we switch the base year from 2000 to 2008. This change in the base year will cause
A) nominal GDP in every year to increase. B) nominal GDP in every year to decrease. C) both nominal and real GDP in every year to decrease. D) real GDP in every year to decrease. E) none of the above