Ch 18 Microeconomics JTCC

Front

Economic rent, or pure rent, is

Back

the price paid for the use of land and other nonreproducible resources.

Front

To say that land rent performs no incentive function means that

Back

higher rental payments will not bring forth a larger quantity of land.

Front

Economic rent refers to the price paid for land and other natural resources that

Back

are fixed in total supply.

Front

The incentive function of prices

Back

indicates that price increases bring forth more of that resource.

Front

The demand for farmland will increase if

Back

technological advances make land more productive.

Front

The rent paid for the pasture land used to graze cattle would increase if:
- the productivity of the land increased.
- people decided to consume more beef.
- oil deposits were discovered on the land.
- any of these occurred.

Back

any of these occurred.

Front

The demand for land is

Back

downsloping.

Front

If a factor of production has no production cost and has a fixed supply, then payments to that factor constitute what economists call

Back

economic rent.

Front

In the market for loanable funds, what happens when there is an increase in borrowing for investment?

Back

It will increase the interest rate.

Front

Interest is the

Back

price paid for the use of money.