MICROECONOMICS-CONNECT PLUS ACCESS
21st Edition
ISBN: 9781260430776
Author: McConnell
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 2DQ
To determine
Different perspectives of land rent.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Distinguish between the following;
i. Direct demand and derived demand
ii. Economic rent and transfer earning
iii) Transfer payment and commercial rent
A British pharmaceutical company spent several years and considerable funds on the development of a treatment for HIV patients. Now, with the protection afforded by patent rights, the company has the potential to reap enormous gains. The government, in response, has threatened to tax away any economic rents the company may earn. Is this a sensible policy? Why or why not? (Hint: Contrast the short-run and long-run effects of taxing away the economic rents.)
A firm that owns and manages rental properties is considering buying a building that would cost $800,000 this year, but would yield an annual revenue stream of $50,000 per year for the foreseeable future. For what range of interest rates would this purchase increase the present value of the firm?
Chapter 18 Solutions
MICROECONOMICS-CONNECT PLUS ACCESS
Knowledge Booster
Similar questions
- Imagine you are the owner of a downtown Laredo building that you lease out for a yearly amount of $ 45,000 over a span of five years. Assume that the explicit expenses for maintaining the building are $ 20,000, and an additional implicit cost of $15,000 exists. All earnings and costs occur at the conclusion of each year. Suppose the interest rate is 7.5 percent, Determine the present value for both the stream of: (i) your accounting profits. Show your steps. (ii) economic profits. Show your stepsarrow_forwardExplain The equilibrium in the market for capitalarrow_forwardUnder the simple conditions spelled out in class, if a bond is to pay off $324 in exactly one year from now, and the market interest rate is 8 percent, the price of the bond today is . $241 $4050 $350 $300 $288arrow_forward
- d. “As a result of the new law, Bruno receives no economic rent”. Is this statement correct or false? Please discuss your answer making reference to the diagram.arrow_forwardUnder the simple conditions spelled out in class, if a bond is to pay off $115 in exactly one year from now is purchased for $100 today, the market interest rate is . a) 6.67% b) 15% c) 3.75% d) 7.5% e) 30%arrow_forwardsupply of land: Q = 10 (acres of land). Farmers ' demand for land: Q = 50 - р. The increased demand for food increased the demand for land to Q = 100 - р.Determine how much the land rent has increased if the bank interest rate has decreased from 10% per annum to 5% per annum, and the fee for invested capital and depreciation charges have not changed.arrow_forward
- How does Henry George’s proposal for a single tax on land relate to the elasticity of the supply of land? Why are there so few remaining advocates of George’s proposal?arrow_forwardConsider a firm that uses capital and labor as inputs and sells 20,000 units of output per year at the going market price of $15. Also, assume that total labor costs to the firm are $250,000 annually. Assume further that the total capital stock of the firm is currently worth $400,000, that the return available to investors with comparable risks is 7 percent annually, and that there is no depreciation. Is this a profitable firm? Explain your answer.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning