The price paid to purchase land
A) has no relation to cost because it did not cost anything to produce the land.
B) rarely has any relation to cost because it has usually been determined by competitive bidding.
C) usually depends on the cost to the seller of letting the purchaser have the land.
D) would more accurately reflect the social value of the land if the price were zero.
C
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Economic models
A) are used to explain how people think. B) are used to explain how people behave. C) are essential representations of the real world. D) are never used for making economic projections or predictions.
A price ceiling is binding when it is set
a. above the equilibrium price, causing a shortage. b. above the equilibrium price, causing a surplus. c. below the equilibrium price, causing a shortage. d. below the equilibrium price, causing a surplus.