Chapter
30
Rent,
Interest,
and
Profit
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
30­1
Chapter
Objectives
What
is
land?
Economic
rent
Are prices high because rents
high because prices are high?
are
high,
or
are
rents
What
is
capital?
How
is
the
interest
rate
determined?
The
net
productivity
of
capital
The
capitalization
of
assets
The
present
value
of
future
income
How
are
profits
determined?
Theories
of
profit
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
30­2
What
Is
Rent?
What
is
land?
Land
is
a
resource
or
a
factor
of
production
The
owner
of
land
is
paid
rent
for
allowing
its
use
in
the
production
process
The
amount
of
rent
paid
for
a
piece
of
land
is
based
on
the
supply
of
and
the
demand
for
land
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
30­3