Exhibit 30-4

-Refer to Exhibit 30-4.Assume a per acre tax,T,is imposed on land use.The rent (per acre)of land services will

Question

Exhibit 30-4
 
-Refer to Exhibit 30-4.Assume a per acre tax,T,is imposed on land use.The rent (per acre)of land services will

Quizplus · Accepted Answer

When a tax is imposed on land use, the cost of using land increases. This increase in cost will lead to a decrease in demand for land services, which in turn will lead to a decrease in the rent (price) of land services. Therefore, the rent per acre of land services will fall from R₁ to R₁ - T.

Exhibit 30-4 -Refer to Exhibit 30-4.Assume a Per Acre Tax,T,is Imposed on Acre