According to Ricardo's Explanation of Land Rent, What Happens When

question 35

Multiple Choice

According to Ricardo's explanation of land rent, what happens when the demand for land increases?

• A) The supply curve shifts to the right just enough to keep the price per acre constant.
• B) Revenues to owners of land increase but economic rent declines.
• C) The amount of economic rent stays constant, constrained by a perfectly inelastic supply curve.
• D) Both revenues to owners of land and economic rent increase.

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Definitions:

Bounded Rationality

A concept suggesting that individuals make decisions based on the limited information available to them and their own cognitive limitations.

Convergent Thinking

A cognitive process where the focus is on narrowing down multiple ideas or solutions to determine a single best solution.

Creative Process

The series of steps or stages involved in generating innovative ideas or solutions, which often include preparation, incubation, illumination, and verification.

Incubation

A process in creativity and problem-solving where an individual refrains from consciously thinking about a problem, allowing for subconscious processing.