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P. 22. Rent, p. 309.
Rent - payment for
Economic rent -
payment for any factor of production over and above that which necessary to
keep the factor in its present use (David Ricardo)(above S in gr).
supply of the land is fixed
Land has only one use - to grow food (S is
vertical, all is economic rent).
The demand for
land is derived. Rent fulfils no purpose in supply, so is just producers'
Transfer earnings -
payment necessary to keep a factor in its present use.
Quasi rent - economic
rent at short run and transfer earnings in the long run.
After Ricardo: Economic rent is applied
to all factors Supply is fixed only in global sense.
Some believe that rent is the ideal form of
tax. Tax was placed on land in 1970. House prices rocketed and speculation with
land stopped. Also the government could own all land(reduces inequality)