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ECONOMIC RENT is defined as

ECONOMIC RENT is defined as. A return over and above opportunity cost (or the normal rate of return) necessary to keep a resource in its current use. ECONOMIC RENT is. Any payment made to a resource above the amount necessary to induce any amount of the resource to be employed.

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ECONOMIC RENT is defined as

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  1. ECONOMIC RENTis defined as A return over and above opportunity cost (or the normal rate of return) necessary to keep a resource in its current use

  2. ECONOMIC RENTis Any payment made to a resource above the amount necessary to induce any amount of the resource to be employed

  3. ECONOMIC RENTis The amount over and above the opportunity cost necessary to keep a resource in its current use

  4. in normal language,ECONOMIC RENTanswers What is the most someone would be willing to pay for the right -to use a resource? -or to use part of a resource?

  5. Demand for land at varying pricesassume that the quantity of a certain type of land available is 300,000 acres and the demand schedule is given below $350 $300 $250 Land Rent $200 $150 $100 $50 0 100 K 200 K 300 K 400 K 500 K 600 K 700 K Number of Acres

  6. Demand for land at varying pricesassume that the quantity of a certain type of land available is 300,000 acres and the demand schedule is given below • The pure rent per acre on this land will be ______ . • The total quantity of land rented will be _____ acres. • If landowners were taxed at a rate of $250 per acre for their land, the pure rent on this land after taxes would be ___ , but the number of acres rented would be ______ . $350 $300 $250 Land Rent $200 $150 $100 $50 0 100 K 200 K 300 K 400 K 500 K 600 K 700 K Number of Acres

  7. Demand for land at varying pricesassume that the quantity of a certain type of land available is 300,000 acres and the demand schedule is given below • The pure rent per acre on this land will be $250. • The total quantity of land rented will be 300,000 acres. • If landowners were taxed at a rate of $250 per acre for their land, the pure rent on this land after taxes would be $0, but the number of acres rented would be 300,000. $350 $300 $250 Land Rent $200 $150 $100 $50 0 100 K 200 K 300 K 400 K 500 K 600 K 700 K Number of Acres

  8. YIELD PER ACRE ON THREE GRADES OF LAND • If the product sells for $1.00 a bushel, how many dollars per acre should be spent on Grade A land: ____ Grade B land: ____ Grade C land: ____ • In a competitive market, what do you think the rental price would be for an acre of Grade A land: ____ Grade B land: ____ Grade C land: ____ Expenditure per Acre

  9. YIELD PER ACRE ON THREE GRADES OF LAND • If the product sells for $1.00 a bushel, how many dollars per acre should be spent on Grade A land: 300 Grade B land: 200 Grade C land: 100 • In a competitive market, what do you think the rental price would be for an acre of Grade A land: $150 Grade B land: $90 Grade C land: $20 Expenditure per Acre

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