Suppose the supply of farmland is infinitely inelastic and the demand for land is downward sloping but inelastic at the current equilibrium
If the supply curve shifts leftward (e.g., some farmland is permanently converted to other uses), what happens to the aggregate economic rents in this market?
A) Decrease
B) Increase
C) Remain the same
D) We do not have enough information to answer this question.
B
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Refer to Figure 10-1. When the price of hoagies increases from $5.00 to $5.75, quantity demanded decreases from Q1 to Q0. This change in quantity demanded is due to
A) the fact that marginal willingness to pay falls. B) the law of diminishing marginal utility. C) the income and substitution effects. D) the price and output effects.
The central idea distinguishing the "efficiency wage model" is that the wage paid by Firm A relative to the wages at other firms helps determine
A) Firm A's demand for labor. B) the amount of labor Firm A can hire. C) the productivity of Firm A's workers. D) Firm A's markup fraction.