An increase in the price of some rural acreage resulting from the construction of a nearby interstate highway is an example of

Question

Quizplus · Accepted Answer

The increase in the price of rural acreage is an example of rent, which is the income earned by the owner of a resource for its use in production. In this case, the land is being used for the construction of a highway and its proximity to the new infrastructure increases its value as a resource, hence the increase in rent. The other options are not applicable in this scenario: capital formation refers to the accumulation of productive resources over time, consumer surplus refers to the extra benefit consumers receive from paying less than the maximum they are willing to pay for a good or service, parity refers to price or wage equality in different markets, and risk refers to uncertainty or potential losses associated with an economic decision.

An Increase in the Price of Some Rural Acreage Resulting