Question

Consider the market for land in upstate New York, a mostly rural and less populous area, as compared to the market for land in the Upper West Side of New York City, a well-to-do neighborhood alongside Central Park.
Because the supply of land in upstate New York is ____________________ (perfectly inelastic , perfectly elastic) , buyers in upstate New York pay _______________ (an interest rate , an economic rent , an economic profit) when they purchase their land.
Owners realize that the rental price of land is much lower in Upstate New York than in more densely populated areas like the Upper West Side of New York City. One of the possible explanations for this rent difference is that there is a low _________________ (demand for , supply of ) land with low productivity.
Some land owners decide to build parking lots in the Upper West Side of New York City. The supply curve for land to be used for parking lots is _____________ ( horizontal , vertical , downward sloping , upward sloping ) .

Answer 1

Answer:

Because the supply of land in upstate New York perfectly inelastic, buyers in upstate New York economic rent when they purchase their land.

Owners realize that the rental price of land is much lower in Upstate New York than in more densely populated areas like the Upper West Side of New York City. One of the possible explanations for this rent difference is that there is a low demand for land with low productivity.

Some land owners decide to build parking lots in the Upper West Side of New York City. The supply curve for land to be used for parking lots is  upward sloping.