Asked by Dennie Katuna on May 25, 2024
Verified
If the MRP of an acre of land were $1,000 and its rent were $500,
A) more land is being used than should be used.
B) exactly the right amount of land is being used.
C) not enough land is being used.
D) only half as much land is being used as should be used.
MRP
Marginal Revenue Product, representing the additional revenue generated by employing one more unit of a factor, such as labor or capital.
Rent
Rent is the payment made by a tenant to a landlord for the use of a property, room, or piece of land for a specified period.
- Acquire an understanding of the Marginal Revenue Product (MRP) concept and its role in making resource hiring choices.
Verified Answer
SS
Simran Sohal
May 26, 2024
Final Answer :
C
Explanation :
When the Marginal Revenue Product (MRP) of an acre of land is higher than its rent, it indicates that the land is generating more revenue than it costs to rent. This suggests that not enough land is being used because using more land would still be profitable.
Learning Objectives
- Acquire an understanding of the Marginal Revenue Product (MRP) concept and its role in making resource hiring choices.