the price paid for the use of land and other nonreproducible resources.
To say that land rent performs no incentive function means that:
higher rental payments will not bring forth a larger quantity of land.
Economic rent refers to the price paid for land and other natural resources that:
are fixed in total supply.
Refer to the above diagram. Land:
would be a free resource if demand is D4 or less.
Refer to the above diagram. If demand is D2, a tax of A per acre will:
not affect the quantity of land available to society.
Refer to the above diagrams. Assume that only wheat can be grown on the three grades of land shown in Figures a, b, and c. Also assume that identical amounts of labor, capital, and other needed inputs are used in farming each grade of land. On the basis of these three figures we:
can say that the land in Figure c is most productive.