1. 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

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

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

4. in normal language, ECONOMIC RENT answers 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 prices assume that the quantity of a certain type of land available is 300,000 acres and the demand schedule is given below Pure Land Rent Per Acre Acres of Land Demanded $350100,000 300200,000 250300,000 200400,000 150500,000 100600,000 50700,000 Number of Acres Land Rent 100 K200 K300 K400 K500 K600 K700 K $350 0 $300 $250 $200 $150 $100 $50

6. Demand for land at varying prices assume 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 ______. Number of Acres Land Rent 100 K200 K300 K400 K500 K600 K700 K $350 0 $300 $250 $200 $150 $100 $50

7. Demand for land at varying prices assume 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. Number of Acres Land Rent 100 K200 K300 K400 K500 K600 K700 K $350 0 $300 $250 $200 $150 $100 $50

8. 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: ____ Land Quality $0$100$200$300$400$500$600 Grade A Land Yield 0175325450524575615 Grade B Land Yield 0160290375445490525 Grade C Land Yield 0120210290330360385 YIELD PER ACRE ON THREE GRADES OF LAND Expenditure per Acre

9. 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 Land Quality $0$100$200$300$400$500$600 Grade A Land Yield 0175325450524575615 Grade B Land Yield 0160290375445490525 Grade C Land Yield 0120210290330360385 YIELD PER ACRE ON THREE GRADES OF LAND Expenditure per Acre