Rent Is Automatically Increased

question 33

Multiple Choice

Rent is automatically increased:

• A) if the lessor makes expensive improvements to the property.
• B) when the cost of living increases.
• C) if the lease contains an escalation clause and the facts demonstrate that application of such a clause is appropriate
• D) if the lessor's taxes on the rented property are increased.

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Definitions:

Production Function

A mathematical representation in economics that describes the relationship between the inputs used in production and the output of goods or services produced.

Returns To Scale

The change in output resulting from a proportionate increase in all inputs in the production process.

Input

Resources such as labor, materials, and capital used in the production process to create goods or services.

Marginal Products

The additional output resulting from a one-unit increase in the use of a variable input, holding all other inputs constant.