Theory of Rent
•Download as PPTX, PDF•
5 likes•620 views
1) Ricardo's theory of rent states that rent arises due to differences in the fertility of land and that the least fertile land that is cultivated sets the price of farm output. 2) There are three situations where rent arises: extensive cultivation when more land is brought into use, intensive cultivation when more labor and capital is used on the same plots of land, and situation rent due to locational advantages. 3) Criticisms of the theory include that land fertility is not fixed, the concept of marginal land does not always exist, it ignores alternative uses of land, and factors like capital and labor are not homogeneous.
Report
Share
Report
Share
Recommended
CBSMS Theory on rent and wages
(1) The document discusses various theories on rent and wages, including the Ricardian theory of rent, modern theory of rent, and theories of wages such as the subsistence theory, wages fund theory, and marginal productivity theory of wages.
(2) Key aspects of the Ricardian theory are that rent arises due to differences in land fertility and location, and rent is a surplus from more productive "intra-marginal" lands over the least productive "marginal" land.
(3) The modern theory extends the concept of rent beyond just land to other factors with inelastic supply like labor and capital in the short-run.
david ricardo theory of rent by karampreet
This document summarizes David Ricardo's theory of rent from his book "Principles of Political Economy and Taxation." Ricardo defined rent as the payment made for the use of land and its natural fertility. He argued that rent arises due to differences in land fertility - more fertile land generates a surplus over less fertile land. This surplus is what constitutes economic rent. Ricardo also explained how rent can arise from intensive cultivation due to diminishing marginal returns from additional labor and capital on a single plot of land.
Quasi rent
The document discusses the concept of quasi rent. It defines quasi rent as a temporary gain earned by a factor of production due to a temporary limitation in its supply in the short run. Specifically:
- Quasi rent arises for capital equipment/machinery in the short run when its supply is fixed and it earns surplus over its transfer earnings.
- It is measured as the total revenue earned minus the total variable costs.
- Unlike economic rent which persists in both the short and long run, quasi rent disappears in the long run when the supply of the factor can be increased.
Ricardian Theory of Rent
Ricardo developed the Ricardian theory of rent, which states that rent arises due to differences in the fertility of land used for agriculture. Land is assumed to have original and indestructible powers of fertility bestowed by nature. Rent is the surplus earned from more fertile land over the least fertile 'marginal' land that marks the extensive limit of cultivation. Rent is determined by the law of diminishing returns in agriculture under both extensive and intensive cultivation. The theory explains the origin of differential rent but makes unrealistic assumptions about land.
The marginal productivity theory of distribution
The document discusses the neoclassical theory of distribution and the concept of factor payments. It addresses the "adding up" problem of whether total factor payments will equal total product. Wicksteed showed that under constant returns to scale and factors paid their marginal products, total revenue will equal total costs through Euler's theorem. However, this assumes a linear homogeneous production function. Later economists like Samuelson and Hicks found the condition is only met at the minimum point of the long-run average cost curve, where a firm has constant returns to scale.
Distribution Theory.pptx
Theory of Distribution
Factor Pricing
Concepts of rent, wages, interest, profit.
Marginal productivity theory
Modern productivity theory
Rent theory
1. The document discusses various economic theories of factor pricing and distribution, including the theory of rent, wages, and profit.
2. It provides details on marginal productivity theory and critiques it, explaining modern theory of factor pricing under perfect competition using demand and supply.
3. Theories of rent such as Ricardian and theories of wages such as marginal productivity and modern supply and demand theories are summarized, along with criticisms of each approach.
Theory of the second best
In economics, the theory of the second best concerns the situation when one or more optimality conditions cannot be satisfied.
The economists Richard Lipsey and Kelvin Lancaster showed in 1956, that if one optimality condition in an economic model cannot be satisfied, it is possible that the next-best solution involves changing other variables away from the values that would otherwise be optimal.
Politically, the theory implies that if it is infeasible to remove a particular market distortion, introducing a second (or more) market distortion may partially counteract the first, and lead to a more efficient outcome.
Recommended
CBSMS Theory on rent and wages
(1) The document discusses various theories on rent and wages, including the Ricardian theory of rent, modern theory of rent, and theories of wages such as the subsistence theory, wages fund theory, and marginal productivity theory of wages.
(2) Key aspects of the Ricardian theory are that rent arises due to differences in land fertility and location, and rent is a surplus from more productive "intra-marginal" lands over the least productive "marginal" land.
(3) The modern theory extends the concept of rent beyond just land to other factors with inelastic supply like labor and capital in the short-run.
david ricardo theory of rent by karampreet
This document summarizes David Ricardo's theory of rent from his book "Principles of Political Economy and Taxation." Ricardo defined rent as the payment made for the use of land and its natural fertility. He argued that rent arises due to differences in land fertility - more fertile land generates a surplus over less fertile land. This surplus is what constitutes economic rent. Ricardo also explained how rent can arise from intensive cultivation due to diminishing marginal returns from additional labor and capital on a single plot of land.
Quasi rent
The document discusses the concept of quasi rent. It defines quasi rent as a temporary gain earned by a factor of production due to a temporary limitation in its supply in the short run. Specifically:
- Quasi rent arises for capital equipment/machinery in the short run when its supply is fixed and it earns surplus over its transfer earnings.
- It is measured as the total revenue earned minus the total variable costs.
- Unlike economic rent which persists in both the short and long run, quasi rent disappears in the long run when the supply of the factor can be increased.
Ricardian Theory of Rent
Ricardo developed the Ricardian theory of rent, which states that rent arises due to differences in the fertility of land used for agriculture. Land is assumed to have original and indestructible powers of fertility bestowed by nature. Rent is the surplus earned from more fertile land over the least fertile 'marginal' land that marks the extensive limit of cultivation. Rent is determined by the law of diminishing returns in agriculture under both extensive and intensive cultivation. The theory explains the origin of differential rent but makes unrealistic assumptions about land.
The marginal productivity theory of distribution
The document discusses the neoclassical theory of distribution and the concept of factor payments. It addresses the "adding up" problem of whether total factor payments will equal total product. Wicksteed showed that under constant returns to scale and factors paid their marginal products, total revenue will equal total costs through Euler's theorem. However, this assumes a linear homogeneous production function. Later economists like Samuelson and Hicks found the condition is only met at the minimum point of the long-run average cost curve, where a firm has constant returns to scale.
Distribution Theory.pptx
Theory of Distribution
Factor Pricing
Concepts of rent, wages, interest, profit.
Marginal productivity theory
Modern productivity theory
Rent theory
1. The document discusses various economic theories of factor pricing and distribution, including the theory of rent, wages, and profit.
2. It provides details on marginal productivity theory and critiques it, explaining modern theory of factor pricing under perfect competition using demand and supply.
3. Theories of rent such as Ricardian and theories of wages such as marginal productivity and modern supply and demand theories are summarized, along with criticisms of each approach.
Theory of the second best
In economics, the theory of the second best concerns the situation when one or more optimality conditions cannot be satisfied.
The economists Richard Lipsey and Kelvin Lancaster showed in 1956, that if one optimality condition in an economic model cannot be satisfied, it is possible that the next-best solution involves changing other variables away from the values that would otherwise be optimal.
Politically, the theory implies that if it is infeasible to remove a particular market distortion, introducing a second (or more) market distortion may partially counteract the first, and lead to a more efficient outcome.
marginal efficiency of capital
Marginal efficiency of capital (MEC) refers to the expected rate of profitability of new investment. MEC is calculated based on the amount of expected profit and the cost of the capital asset. It indicates the internal rate of return of an extra unit of capital. Investment decisions are influenced by comparing the MEC to interest rates - investments will be made when MEC is higher than interest rates. Companies use MEC to evaluate investments by comparing the discounted present value of expected income to the price of the capital asset. The document then discusses factors that affect MEC and provides a case study of how Nike used MEC to evaluate an investment decision.
Modern Theory of Rent
The modern theory of rent has modified and expanded on Ricardo's original theory in several ways:
1. Rent can be earned by all factors of production, not just land, whenever the supply of a factor is inelastic.
2. Rent is defined as the difference between a factor's actual earnings and its transfer earnings (what it could earn in its next best use), rather than being based on differences in land quality.
3. Whether rent enters into price depends on the perspective (economy, industry, or individual firm) whereas Ricardo argued it never enters price. From an economy perspective, rent does not affect price.
Theories _of_interest.pdf
The document discusses several theories of interest, including classical, neoclassical loanable funds, modern, productivity, abstinence, Austrian time preference, Fisher's time preference, and Keynes' liquidity preference theories. The classical theory views interest as determined by real factors like savings and investment. The loanable funds theory sees interest set by demand and supply of loanable capital. Modern theory combines monetary and non-monetary factors using IS and LM curves.
Welfare economics
1. Welfare economics analyzes how economic policies affect overall social welfare. Classical welfare economics assumed welfare was additive and could be quantitatively measured and compared between individuals.
2. New welfare economics is normative rather than positive and recognizes welfare cannot be cardinally measured, only ordinally. It compares the relative social welfare of different economic states. Scholars like Hicks, Pigou, Kaldor and Scitovsky contributed to developing new welfare economics.
3. The Hicks-Kaldor compensation principle states that if one group gains from a policy change while another loses, but the gainers could potentially compensate the losers and still be better off, then the change increases social welfare. Scitovsky
Modern theory of Rent and Quasi-rent
The modern theory of rent is an amplified and modified version of the Ricardian theory of Rent. It was first of all discussed by J.S. Mill and after that developed by economists like Jevons, Pareto, Marshall, Joan Robinson etc.
According to modern theory, economic rent is a surplus which is not peculiar to land alone. It can be a part of the income of labour, capital, entrepreneur.
According to the modern version, rent is a surplus which arises due to the difference between actual earning and transfer earning.
factor pricing
Factor pricing is determined by demand and supply in competitive markets. The three main factors of production that are traded are labor, land, and capital. Labor demand is determined by the point where the marginal product of labor equals the wage rate. The individual labor supply curve may bend backward at high wages, but the market supply curve remains upward sloping in the long run. Factor prices are determined by the equilibrium of demand and supply in the market. Rent is the payment for fixed factors in excess of their opportunity cost. Profit provides rewards for entrepreneurship, risk-taking, and innovation in imperfect markets.
Coase theorem (1)
This document summarizes Ronald Coase's theorem on the allocation of resources between parties when transaction costs are zero. It discusses that Coase believed private negotiations between parties could lead to an efficient allocation of resources to address externalities, rather than relying on government intervention. It provides an example of how a factory and fishermen could negotiate an efficient solution to pollution without government regulation if transaction costs were zero. The document also outlines the assumptions of the theorem and provides analysis of an example case related to Coase's work.
Rent
Macro Economics
For downloading this contact- bikashkumar.bk100@gmail.com
Prepared by Students of University of Rajshahi
Arif Ahmed
Rajib Hossain
Sumaiya Yeasmin Any
Ashraful Alam
Mouny Akter Riya
Factor endowments and the heckscher ohlin theory (chapter 5)
This document presents a group presentation to Professor Ayesha Akhter of the Department of Finance at Jagannath University by Group 4. The presentation includes:
1. An introduction and list of group members and their student IDs.
2. An outline of Chapter 5 on the Heckscher-Ohlin theory of international trade, including assumptions, factor intensities, factor abundance, and the shape of production frontiers.
3. Summaries of sections on the Heckscher-Ohlin theory, factor price equalization, and illustrations of the models by various group members.
welfare economics
Welfare economics analyzes the optimal allocation of resources and goods to maximize social welfare. It considers both total welfare achieved and how it is distributed. Pareto optimality is a state where no individual can be made better off without making another individual worse off. Ricardian rent theory states that rent arises from differences in land fertility and is determined by the price of agricultural output, not the other way around. Quasi rent is the temporary surplus earned on capital equipment when supply is fixed in the short run.
Elasticity of substitution
The document discusses the economic implications of elasticity of substitution. It is introduced as a measure of how easily one input can be substituted for another when their prices change. Elasticity of substitution has various applications, including interpreting the substitutability of inputs, production theory involving profit maximization and cost minimization, and specifying common production functions like Cobb-Douglas, constant elasticity of substitution, and translog that determine the elasticity between input pairs. The document provides mathematical expressions and diagrams to explain these concepts.
Recardian Theory of Rent
Ricardo's theory of rent argues that rent is the payment made to the owner of land for its use in production. Specifically, rent is defined as any payment above the minimum costs required to bring a factor of production into use. In classical economics, rent applies to non-produced inputs like land based on its location, as well as assets formed by legal privileges over natural resources, such as patents. The document provides an overview of the economic definition of rent according to Ricardo's theory.
Neo classical theory of interest
The neoclassical theory of interest, or loanable funds theory, holds that the interest rate is determined by the supply and demand for loanable funds. The demand for loanable funds comes from investment, consumption/dissaving, and hoarding. The supply comes from savings, bank credit, dishoarding, and disinvestment. The interest rate reaches equilibrium when the total demand for loanable funds equals the total supply. Critics argue the theory assumes full employment, does not precisely determine the interest rate, and is impractical.
General equilibrium : Neo-classical analysis
Neo classical general equilibrium theory which is based on Walrasian theory of general equilibrium 2*2*2 model and Marshallian graphical representation
law of equi -marginal utility
Gossen's second law explained with diagram, it also explains the consumer equilibrium under cardinal utility analysis
Bilateral monopoly
This document discusses bilateral monopoly, which refers to a market situation with a single seller (monopolist) and single buyer (monopsonist) of a product. It outlines the assumptions of bilateral monopoly and describes how price and output are determined. Specifically, it notes that the monopolist will seek to sell at a higher price where marginal cost equals marginal revenue, while the monopsonist will seek to buy at a lower price where marginal expenditure equals marginal utility. The actual price and quantity transacted will depend on the relative bargaining strengths of the monopolist and monopsonist, settling somewhere between the two preferred prices.
Liquidity preference theory
Keynes' liquidity preference theory holds that individuals and firms demand to hold cash, or liquidity, for three main motives: transaction, precautionary, and speculative. The transaction motive refers to holding cash for daily transactions, while the precautionary motive involves holding cash as a buffer against unexpected events. The speculative motive refers to holding cash in order to take advantage of anticipated price changes in bonds and securities. Together these three motives determine the overall demand for money, or liquidity preference, in the economy. The interest rate is determined by the interaction of liquidity preference and the fixed money supply. When liquidity preference is very high, so that demand for money vastly exceeds supply even at very low interest rates, monetary policy
Rent Theory.pdf
This PPT contains matter for Rent theory in the syllabus of Business economics/managerial economics/Micro economics students.
Producers equilibrium
A producer's equilibrium refers to the level of output where the producer earns maximum profits. This occurs where marginal revenue equals marginal cost and marginal cost is rising. There are two approaches to determining producer's equilibrium - the total revenue and total cost approach, and the marginal revenue and marginal cost approach. Under both approaches, equilibrium is reached at the quantity of output where marginal revenue equals marginal cost and marginal cost is rising. This equilibrium can be illustrated using diagrams with output on the x-axis and costs/revenues on the y-axis.
The Kaldor Hicks Compensation Principle
The Kaldor-Hicks Compensation Principle was given by British Economists Nicholas Kaldor And Noble laureate John Hicks. Both are famous for giving their contribution to economic concepts in the existing knowledge of literature.
FACTORS OF PRODUCTION – LAND & ITS CHARACTERISTICS – THEORIES OF RENT
Land is a factor of production that refers to natural resources like earth, water, forests, and minerals. Theories of rent attempt to explain the payment made for the use of land. According to Ricardo's theory of rent, rent is the portion of agricultural production paid to landowners for the original and indestructible fertility powers of the soil. The modern theory defines rent as the difference between a land's actual earnings and its next best use or transfer earnings. Rent arises when the supply of land is less than perfectly elastic.
urban land economics.pptx
This document provides an introduction to urban land economics. It discusses key concepts like value, price, and cost as they relate to urban real estate. The objectives are to acquaint students with factors that contribute to urban land value and the characteristics of urban real estate markets. Several features of land are examined, including its relative fixity, lack of creation costs, heterogeneity, and diminishing returns. The document also explores the concepts of economic rent in both agricultural and urban contexts.
More Related Content
What's hot
marginal efficiency of capital
Marginal efficiency of capital (MEC) refers to the expected rate of profitability of new investment. MEC is calculated based on the amount of expected profit and the cost of the capital asset. It indicates the internal rate of return of an extra unit of capital. Investment decisions are influenced by comparing the MEC to interest rates - investments will be made when MEC is higher than interest rates. Companies use MEC to evaluate investments by comparing the discounted present value of expected income to the price of the capital asset. The document then discusses factors that affect MEC and provides a case study of how Nike used MEC to evaluate an investment decision.
Modern Theory of Rent
The modern theory of rent has modified and expanded on Ricardo's original theory in several ways:
1. Rent can be earned by all factors of production, not just land, whenever the supply of a factor is inelastic.
2. Rent is defined as the difference between a factor's actual earnings and its transfer earnings (what it could earn in its next best use), rather than being based on differences in land quality.
3. Whether rent enters into price depends on the perspective (economy, industry, or individual firm) whereas Ricardo argued it never enters price. From an economy perspective, rent does not affect price.
Theories _of_interest.pdf
The document discusses several theories of interest, including classical, neoclassical loanable funds, modern, productivity, abstinence, Austrian time preference, Fisher's time preference, and Keynes' liquidity preference theories. The classical theory views interest as determined by real factors like savings and investment. The loanable funds theory sees interest set by demand and supply of loanable capital. Modern theory combines monetary and non-monetary factors using IS and LM curves.
Welfare economics
1. Welfare economics analyzes how economic policies affect overall social welfare. Classical welfare economics assumed welfare was additive and could be quantitatively measured and compared between individuals.
2. New welfare economics is normative rather than positive and recognizes welfare cannot be cardinally measured, only ordinally. It compares the relative social welfare of different economic states. Scholars like Hicks, Pigou, Kaldor and Scitovsky contributed to developing new welfare economics.
3. The Hicks-Kaldor compensation principle states that if one group gains from a policy change while another loses, but the gainers could potentially compensate the losers and still be better off, then the change increases social welfare. Scitovsky
Modern theory of Rent and Quasi-rent
The modern theory of rent is an amplified and modified version of the Ricardian theory of Rent. It was first of all discussed by J.S. Mill and after that developed by economists like Jevons, Pareto, Marshall, Joan Robinson etc.
According to modern theory, economic rent is a surplus which is not peculiar to land alone. It can be a part of the income of labour, capital, entrepreneur.
According to the modern version, rent is a surplus which arises due to the difference between actual earning and transfer earning.
factor pricing
Factor pricing is determined by demand and supply in competitive markets. The three main factors of production that are traded are labor, land, and capital. Labor demand is determined by the point where the marginal product of labor equals the wage rate. The individual labor supply curve may bend backward at high wages, but the market supply curve remains upward sloping in the long run. Factor prices are determined by the equilibrium of demand and supply in the market. Rent is the payment for fixed factors in excess of their opportunity cost. Profit provides rewards for entrepreneurship, risk-taking, and innovation in imperfect markets.
Coase theorem (1)
This document summarizes Ronald Coase's theorem on the allocation of resources between parties when transaction costs are zero. It discusses that Coase believed private negotiations between parties could lead to an efficient allocation of resources to address externalities, rather than relying on government intervention. It provides an example of how a factory and fishermen could negotiate an efficient solution to pollution without government regulation if transaction costs were zero. The document also outlines the assumptions of the theorem and provides analysis of an example case related to Coase's work.
Rent
Macro Economics
For downloading this contact- bikashkumar.bk100@gmail.com
Prepared by Students of University of Rajshahi
Arif Ahmed
Rajib Hossain
Sumaiya Yeasmin Any
Ashraful Alam
Mouny Akter Riya
Factor endowments and the heckscher ohlin theory (chapter 5)
This document presents a group presentation to Professor Ayesha Akhter of the Department of Finance at Jagannath University by Group 4. The presentation includes:
1. An introduction and list of group members and their student IDs.
2. An outline of Chapter 5 on the Heckscher-Ohlin theory of international trade, including assumptions, factor intensities, factor abundance, and the shape of production frontiers.
3. Summaries of sections on the Heckscher-Ohlin theory, factor price equalization, and illustrations of the models by various group members.
welfare economics
Welfare economics analyzes the optimal allocation of resources and goods to maximize social welfare. It considers both total welfare achieved and how it is distributed. Pareto optimality is a state where no individual can be made better off without making another individual worse off. Ricardian rent theory states that rent arises from differences in land fertility and is determined by the price of agricultural output, not the other way around. Quasi rent is the temporary surplus earned on capital equipment when supply is fixed in the short run.
Elasticity of substitution
The document discusses the economic implications of elasticity of substitution. It is introduced as a measure of how easily one input can be substituted for another when their prices change. Elasticity of substitution has various applications, including interpreting the substitutability of inputs, production theory involving profit maximization and cost minimization, and specifying common production functions like Cobb-Douglas, constant elasticity of substitution, and translog that determine the elasticity between input pairs. The document provides mathematical expressions and diagrams to explain these concepts.
Recardian Theory of Rent
Ricardo's theory of rent argues that rent is the payment made to the owner of land for its use in production. Specifically, rent is defined as any payment above the minimum costs required to bring a factor of production into use. In classical economics, rent applies to non-produced inputs like land based on its location, as well as assets formed by legal privileges over natural resources, such as patents. The document provides an overview of the economic definition of rent according to Ricardo's theory.
Neo classical theory of interest
The neoclassical theory of interest, or loanable funds theory, holds that the interest rate is determined by the supply and demand for loanable funds. The demand for loanable funds comes from investment, consumption/dissaving, and hoarding. The supply comes from savings, bank credit, dishoarding, and disinvestment. The interest rate reaches equilibrium when the total demand for loanable funds equals the total supply. Critics argue the theory assumes full employment, does not precisely determine the interest rate, and is impractical.
General equilibrium : Neo-classical analysis
Neo classical general equilibrium theory which is based on Walrasian theory of general equilibrium 2*2*2 model and Marshallian graphical representation
law of equi -marginal utility
Gossen's second law explained with diagram, it also explains the consumer equilibrium under cardinal utility analysis
Bilateral monopoly
This document discusses bilateral monopoly, which refers to a market situation with a single seller (monopolist) and single buyer (monopsonist) of a product. It outlines the assumptions of bilateral monopoly and describes how price and output are determined. Specifically, it notes that the monopolist will seek to sell at a higher price where marginal cost equals marginal revenue, while the monopsonist will seek to buy at a lower price where marginal expenditure equals marginal utility. The actual price and quantity transacted will depend on the relative bargaining strengths of the monopolist and monopsonist, settling somewhere between the two preferred prices.
Liquidity preference theory
Keynes' liquidity preference theory holds that individuals and firms demand to hold cash, or liquidity, for three main motives: transaction, precautionary, and speculative. The transaction motive refers to holding cash for daily transactions, while the precautionary motive involves holding cash as a buffer against unexpected events. The speculative motive refers to holding cash in order to take advantage of anticipated price changes in bonds and securities. Together these three motives determine the overall demand for money, or liquidity preference, in the economy. The interest rate is determined by the interaction of liquidity preference and the fixed money supply. When liquidity preference is very high, so that demand for money vastly exceeds supply even at very low interest rates, monetary policy
Rent Theory.pdf
This PPT contains matter for Rent theory in the syllabus of Business economics/managerial economics/Micro economics students.
Producers equilibrium
A producer's equilibrium refers to the level of output where the producer earns maximum profits. This occurs where marginal revenue equals marginal cost and marginal cost is rising. There are two approaches to determining producer's equilibrium - the total revenue and total cost approach, and the marginal revenue and marginal cost approach. Under both approaches, equilibrium is reached at the quantity of output where marginal revenue equals marginal cost and marginal cost is rising. This equilibrium can be illustrated using diagrams with output on the x-axis and costs/revenues on the y-axis.
The Kaldor Hicks Compensation Principle
The Kaldor-Hicks Compensation Principle was given by British Economists Nicholas Kaldor And Noble laureate John Hicks. Both are famous for giving their contribution to economic concepts in the existing knowledge of literature.
What's hot (20)
Factor endowments and the heckscher ohlin theory (chapter 5)
Factor endowments and the heckscher ohlin theory (chapter 5)
Similar to Theory of Rent
FACTORS OF PRODUCTION – LAND & ITS CHARACTERISTICS – THEORIES OF RENT
Land is a factor of production that refers to natural resources like earth, water, forests, and minerals. Theories of rent attempt to explain the payment made for the use of land. According to Ricardo's theory of rent, rent is the portion of agricultural production paid to landowners for the original and indestructible fertility powers of the soil. The modern theory defines rent as the difference between a land's actual earnings and its next best use or transfer earnings. Rent arises when the supply of land is less than perfectly elastic.
urban land economics.pptx
This document provides an introduction to urban land economics. It discusses key concepts like value, price, and cost as they relate to urban real estate. The objectives are to acquaint students with factors that contribute to urban land value and the characteristics of urban real estate markets. Several features of land are examined, including its relative fixity, lack of creation costs, heterogeneity, and diminishing returns. The document also explores the concepts of economic rent in both agricultural and urban contexts.
principles of agricultural economics
This document discusses theories of rent, including the Ricardian and modern theories. It defines rent as payment for the use of land and notes that rent is determined by price rather than being a price determinant. The key characteristics of land as a factor of production are outlined. The Ricardian theory of rent is based on land differing in fertility and the most fertile land being limited. The modern theory defines rent as the difference between actual and transfer earnings, with transfer earnings being the next best alternative use. Rent can arise when land supply is less than perfectly elastic.
land Economics 2.pptx
The document provides an overview of land use and the compatibility of alternative land uses. It discusses concepts related to the supply and demand of land, including derived demand, price elasticity, land rent theories, and Von Thunen's location theory of land use. Specifically, it explains that land markets work in cycles responding to various economic and social factors. The price of land is determined by the interaction of supply and demand forces. Demand for land is derived from its potential uses. Land supply is relatively inelastic due to land being a finite resource.
Rent
The document discusses theories of economic rent, including Ricardo's theory that rent is payment for the original qualities of land. It also discusses modern theories that rent can apply to all factors with inelastic supply. Rent is defined as any payment above the minimum needed to keep a factor in production. The document provides examples of rent on land and discusses assumptions of Ricardian theory like diminishing returns under intensive cultivation. It also discusses limitations of Ricardo's theory and the concept of quasi-rent introduced by Marshall. The modern theory holds that rent depends on the difference between actual and transfer earnings when supply is inelastic.
Session 9- Urban Land values
Urban land value
Bid rent theory
theoretical city models
Migration
types of migration
impact of migration on urban form
causes and impacts of migration
Chapter 7 land supply answer sheet
Land is an important resource for meeting basic human needs like food and shelter. However, the amount of land is limited in each country despite increasing demand, creating a land constraint issue. When available land cannot meet rising demand, land prices increase as some users are willing to pay higher prices for the scarce resource, exacerbating conflicts between different groups over land usage.
The theory of rent: From Classical and Marxist approach
These slides discuss the Theory of Rent from Classical and Marxist approaches. However, it focuses mostly on the Ricardian derivations on Rent of Land.
Resources and Development - Class 10 Geography Study Material PDF
Comprehensive study notes on Resources and Development for Class 10 students, including detailed explanations, key concepts, and Resources and Development Class 10 NCERT Notes formats to aid in exam preparation and understanding of the subject.
For more information, visit-www.vavaclasses.com
PRICING THE FACTORS OF PRODUCTION.
This document discusses the marginal productivity theory of distribution, which explains the pricing of the four factors of production: rent, wages, profit, and interest. It provides details on:
1. Ricardo's theory of rent, which defines rent as payment for using original and indestructible powers of the soil.
2. The modern theory of rent, which defines rent as the difference between actual and transfer earnings from land.
3. Theories of wages including subsistence theory, wages fund theory, and marginal productivity theory.
4. Theories of interest including loanable funds theory and Keynes' liquidity preference theory.
5. Theories of profit including the view that profit is a
The supply of land
Land is a naturally occurring resource that differs from capital and labor in that its overall supply cannot be increased to meet demand. While the total supply of land is fixed, the supply available for a specific use or industry is not, as land use can shift between agricultural, recreational, and residential depending on who offers the highest price. As the price paid for land increases, more land will be supplied for that particular use, resulting in an upward-sloping and elastic supply curve for land available to individual markets.
Land Law
1) The document discusses India's policy of fixing a ceiling on the maximum amount of land an individual or family can own, in order to reduce inequality and give small farmers access to land.
2) Key aspects of the 1971 ceiling policy included fewer exemptions, lowering the ceiling to 28 acres of wet land and 54 acres of irrigated land, and retroactively invalidating past transactions meant to circumvent the ceiling.
3) The purpose of the land ceiling was to promote principles of economic justice by ensuring more equitable distribution of land and preventing exploitation of landless farmers.
Unit 4 b) agriculture and land reforms
This document discusses India's agrarian structure, land reforms, and patterns of asset ownership. It notes that at independence, India had an unequal agrarian structure with absentee landlords, tenant exploitation, unequal land distribution, and fragmented small holdings. Key land reforms included abolishing intermediaries, providing tenancy rights, redistributing land through ceilings, and consolidating holdings. Reforms aimed to change the unequal structure and promote agriculture growth with social justice. Implementation of reforms faced challenges including lack of political will, legal hurdles, and inadequate land records. The document also discusses India's policy for regulating concentration of economic power in industry through the MRTP Act and subsequent Competition Act.
Rent
Rent can take several forms according to economic theories. Differential rent arises due to differences in the fertility or location of land, where more fertile land commands a higher rent. Scarcity rent is determined by the interaction of demand and supply in the land market, with rent rising as demand increases relative to the fixed supply of land. Quasi-rent is the temporary surplus earned on factors of production besides land when supply cannot immediately respond to increased demand in the short run.
DAVID RICARDO.ppt
David Ricardo was a famous British economist born in 1772 who achieved success as a stockbroker before retiring to focus on economics. He wrote about important economic concepts including wages, profit, rent, and comparative advantage. Ricardo believed wages tended toward subsistence level but could remain above that due to economic growth outpacing population growth. Profits decreased as wages increased because sales revenue was split between wages and profits. Rent was the portion of agricultural production paid to landlords for use of the land. Ricardo's theory of comparative advantage explained how free trade benefits all nations by allowing them to specialize in what they can produce at lowest relative cost.
Economics 8
The marginal productivity theory of distribution states that in a competitive market, each factor of production will be paid a price equal to the value of its marginal product. The theory explains that firms will employ factors up to the point where the marginal productivity of the last unit equals its price. Demand for factors is derived from the demand for final goods. The Ricardian theory of rent argues that landowners receive economic rent for more fertile land due to differences in land quality and scarcity of the best land. Rent is a surplus over the costs of cultivating the least fertile land.
Elusive_Villages_Chapter_Four_Economic Adaptations to the Deltaic Environment...
The document summarizes key points from Chapter 4 of Elusive Villages regarding economic adaptations in the villages of Hajipur and Tinpara. It discusses how population increase has led to land fragmentation and scarcity. Agriculture is the main economic activity, with rice as the primary crop grown, though production is impacted by reliance on monsoon rains and traditional practices. Land ownership determines social class, with landless laborers at the bottom and rich creditors at the top. Money lending systems like mortgaging land and sharecropping are important due to many villagers borrowing more than half the value of their farms.
Land ownership pattern and land tenure
This Presentation is given concept of land ownership and tenure, various tenure modes, Bangladesh landownership registration systems and Pattern.
Farm forestry ii (social forestry)
There were three main types of land tenure systems in India: Zamindars, Mahalwari, and Rayatwari. Land conflicts can arise due to differences in interests over property rights to land such as use, management, income, exclusion, transfer, and compensation. Understanding the specific nature of a land conflict is important for its resolution. Types of land conflicts include disputes over boundaries, inheritance, ownership due to legal pluralism or lack of registration, ownership disputes between state/private/common owners, multiple sales/allocations of land, discrimination in access to land, violent/peaceful land acquisitions and evictions.
Ss chapter 5.2 notes
1) The document discusses how environments and landscapes impact land use and culture. People must adapt land use based on factors like climate and available resources.
2) It describes three levels of economic activity related to land use: first-level involves gathering raw materials from the land and sea; second-level uses those materials to manufacture goods; third-level involves transporting and selling manufactured goods.
3) The document also discusses how colonization and industrialization have changed land use over time. Colonization often leads to changes in landscape to support new livelihoods, while industrialization allows faster transformation of the landscape at a larger scale. European colonization of North and South America involved forming farms and crop-growing areas.
Similar to Theory of Rent (20)
FACTORS OF PRODUCTION – LAND & ITS CHARACTERISTICS – THEORIES OF RENT
FACTORS OF PRODUCTION – LAND & ITS CHARACTERISTICS – THEORIES OF RENT
The theory of rent: From Classical and Marxist approach
The theory of rent: From Classical and Marxist approach
Resources and Development - Class 10 Geography Study Material PDF
Resources and Development - Class 10 Geography Study Material PDF
Elusive_Villages_Chapter_Four_Economic Adaptations to the Deltaic Environment...
Elusive_Villages_Chapter_Four_Economic Adaptations to the Deltaic Environment...
More from DhanwateNationalColl
राष्ट्रसंत तुकडोजी महाराज यांचे काव्य या झोपडीत माझ्या
A poem by Rashtrasant Tukadoji Maharaj - Ya Zopadit Mazya by Dr. Bharti Khapekar
Basic Communication Skills
Communication is a vital skill that involves effectively conveying and receiving information through various mediums. Strong communication requires actively listening to understand others, clearly expressing one's own ideas and feelings, and using verbal and nonverbal cues appropriately depending on the situation. Developing communication skills can help one succeed in relationships, careers, and many other aspects of life.
Women characters in Shakespeare's Play
Shakespeare portrayed a wide range of female characters that encompassed different strengths and qualities. Some of his most notable and strong female characters include Cordelia from King Lear, who comforts her father in his time of need; Portia from The Merchant of Venice, who cleverly disguises herself as a judge; and Juliet from Romeo and Juliet, who courageously pursues her love against her father's wishes. While some characters like Lady Macbeth wield power over men, others like Desdemona demonstrate strength through their independence and determination. Overall, Shakespeare created multidimensional female roles that were often just as spirited and influential as the male characters.
Swapnavasavdattam ppt.
1) The document summarizes the Sanskrit drama Swapnavasavaduttam by the great dramatist Bhasa.
2) It describes several acts or "anks" of the drama, where Vasavdutta is married to King Udayana but falls in love with him, and he mistakes her for Padmavati in a dream.
3) In the end, King Udayana lives happily with both Padmavati and Vasavdutta as his queens.
Spoken English Broken English
George Bernard Shaw discusses proper English speech in his essay "Spoken English and Broken English". He argues that there is no single correct way to speak English, as even educated speakers from different regions vary in their pronunciations. Shaw acknowledges that as a public speaker he must enunciate clearly, but at home with his wife he speaks more casually. He advises foreign students learning English that they should not worry about speaking perfectly, as native English speakers are accustomed to different accents and variations in speech. The main point is to communicate effectively rather than adhering to arbitrary standards of correctness.
Memorandum of Association
This document discusses the Memorandum of Association (MOA) and Articles of Association (AOA), which are the key legal documents that establish a company.
The MOA defines the objectives, activities, and framework of a company. It must be filed with the Registrar of Companies when incorporating. The AOA defines the internal regulations and management structure of the company. It addresses issues like shareholder voting, board appointments, financial procedures.
Together, the MOA and AOA provide transparency to investors on how the company will operate and achieve its goals. They establish the relationship between the company and external parties and restrict the company's actions to only those outlined in the documents.
Business Management
The document discusses management and its role in utilizing natural resources. It defines management as the art of getting things done through people and using resources effectively. Management involves planning, organizing, staffing, and controlling to achieve objectives. It is about decision making, leadership, creating an environment where people can get things done, integrating different resources, and developing people. The document also outlines the different sectors of business and the roles in management hierarchy from top to bottom levels.
Management accounting
This document discusses management accounting and break-even analysis. It defines management accounting as accounting that enables efficient business operations through collecting and communicating internal information for management decision making. The document outlines the functions of management accounting as including data recording, interpretation, communication, planning, organizing, controlling, and decision making. It then provides an example break-even analysis problem calculating the break-even point in rupees and units, profit-volume ratio, margin of safety, and how these change with variations in selling price, fixed costs, and variable costs. The example problem is worked through in detail across 10 parts to demonstrate different aspects of break-even analysis.
Transformation of sentences
This document discusses how to transform sentences between different types, including:
- Exclamatory to assertive and vice versa
- Interrogative to assertive and vice versa
- Affirmative to negative and vice versa
It provides examples of transforming sentences between each type, such as changing an exclamatory sentence like "What a beautiful painting!" to the assertive "It is a very beautiful painting." Homework is assigned to practice additional transformations. Reference books are also listed for further English grammar study.
Indus vally civilization
This document discusses the Indus Valley civilization site of Lothal in Gujarat, India. It provides information about the distance of Lothal from Ahmedabad, a map showing the excavation site boundary, and details about the excavations at Lothal that uncovered a harbor, drainage lines connected to houses, and further exploration of the civilization.
More from DhanwateNationalColl (12)
राष्ट्रसंत तुकडोजी महाराज यांचे काव्य या झोपडीत माझ्या
राष्ट्रसंत तुकडोजी महाराज यांचे काव्य या झोपडीत माझ्या
Recently uploaded
How to Manage Your Lost Opportunities in Odoo 17 CRM
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
Digital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments Unit - NGV Pavilion Concept Design
Advanced Java[Extra Concepts, Not Difficult].docx
This is part 2 of my Java Learning Journey. This contains Hashing, ArrayList, LinkedList, Date and Time Classes, Calendar Class and more.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UP
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
Your Skill Boost Masterclass: Strategies for Effective Upskilling
Your Skill Boost Masterclass: Strategies for Effective UpskillingExcellence Foundation for South Sudan
Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.BBR 2024 Summer Sessions Interview Training
Qualitative research interview training by Professor Katrina Pritchard and Dr Helen Williams
How to Make a Field Mandatory in Odoo 17
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
Main Java[All of the Base Concepts}.docx
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
Chapter 4 - Islamic Financial Institutions in Malaysia.pptxMohd Adib Abd Muin, Senior Lecturer at Universiti Utara Malaysia
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
The History of Stoke Newington Street Names
Presented at the Stoke Newington Literary Festival on 9th June 2024
www.StokeNewingtonHistory.com
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
-------------------------------------------------------------------------------
Find out more about ISO training and certification services
Training: ISO/IEC 27001 Information Security Management System - EN | PECB
ISO/IEC 42001 Artificial Intelligence Management System - EN | PECB
General Data Protection Regulation (GDPR) - Training Courses - EN | PECB
Webinars: https://pecb.com/webinars
Article: https://pecb.com/article
-------------------------------------------------------------------------------
For more information about PECB:
Website: https://pecb.com/
LinkedIn: https://www.linkedin.com/company/pecb/
Facebook: https://www.facebook.com/PECBInternational/
Slideshare: http://www.slideshare.net/PECBCERTIFICATION
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
Discover the Simplified Electron and Muon Model: A New Wave-Based Approach to Understanding Particles delves into a groundbreaking theory that presents electrons and muons as rotating soliton waves within oscillating spacetime. Geared towards students, researchers, and science buffs, this book breaks down complex ideas into simple explanations. It covers topics such as electron waves, temporal dynamics, and the implications of this model on particle physics. With clear illustrations and easy-to-follow explanations, readers will gain a new outlook on the universe's fundamental nature.
South African Journal of Science: Writing with integrity workshop (2024)
South African Journal of Science: Writing with integrity workshop (2024)Academy of Science of South Africa
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar KanvariaRecently uploaded (20)
How to Manage Your Lost Opportunities in Odoo 17 CRM
How to Manage Your Lost Opportunities in Odoo 17 CRM
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UP
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UP
Your Skill Boost Masterclass: Strategies for Effective Upskilling
Your Skill Boost Masterclass: Strategies for Effective Upskilling
Pride Month Slides 2024 David Douglas School District
Pride Month Slides 2024 David Douglas School District
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
South African Journal of Science: Writing with integrity workshop (2024)
South African Journal of Science: Writing with integrity workshop (2024)
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Theory of Rent
- 1. By Dr.Sadhana Thakre Associate Professor , Department Of Commerce, Dhanwate National College,Nagpur.
- 2. THEORY OF RENT Content Meaning Definition Assumptions Explanations Extensive Cultivation Intensive Cultivation Situation Rent Criticisms
- 3. RICARDIAN TEHORY OF RENT Introduction : This theory is propounded by Devid Ricords IN `1817. In ordinary language Rent means the payment which made regularly for fixed period for the use of the services of the goods. Definition – Rent is -------------- powerof the soil” According – Ricords
- 4. Assumption 1. Land is a free gift of nature 2. It is assumed that land differs in fertility 3. Land has single use 4. The law of diminishing returns is operating in agriculture. 5. There exist marginal land i.e. no rent land exists. 6. The most fertile land is cultivated first 7. Land has original and indestructible
- 5. Rent explained in under 3 situations A. Extensive Cultivation B. Intensive Cultivation C. Situation Rent
- 6. Extensive Cultivation In this opinion in the beginning people cultivate best type of land. As population increases, the demand for foodgrain also increases. In this situation, people have to cultivate inferior lands also to fulfil the increased demand for foodgrains. The excess of production on superior land in comparison to inferior land is differential surplus according to Ricardo and it is rent of the superior land.
- 7. EXTENSIVE CUTIVATION 0 200 400 600 800 1000 1200 1400 1600 A B C Total Revenue Total Cost
- 8. Rent under Intensive Cultivation When for more output, more units of labour and capital are used on the same plot of land it is called intensive cultivation.
- 9. Intensive Cultivation 0 200 400 600 800 1000 1200 1400 1600 1 2 3 TOTAL REVENUE TOTAL COST
- 10. Situation Rent Ricardo has also discussed rent arising due to difference in the situations of various plots of land. This is called situation rent. Some plots may be nearer to central market places or some may be situated in such a way that their supervision is easier.
- 11. Criticism 1. Fertility of soil is neither original nor indestructible 2. Marginal land does not exist 3. Scarcity concept ignored 4. Rent enters into price 5. Alternative used of land ignored 6. Wrong assumption of perfect competition 7. No historical evidence 8. Multiple factors determine productivity 9. Inapplicability of the law of diminishing returns 10.Capital and labour cannot be treated as single homogeneous factor