Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land.What happens to land not classified as "wetlands" within the community? (i) The price of non-wetland land will rise.
(ii) The marginal product of non-wetland land will fall.
(iii) The marginal product of non-wetland land will rise.

Question

Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land.What happens to land not classified as "wetlands" within the community? (i)	The price of non-wetland land will rise.
(ii)	The marginal product of non-wetland land will fall.
(iii)	The marginal product of non-wetland land will rise.

Quizplus · Accepted Answer

When certain areas are designated as "wetlands" and building is restricted, the supply of buildable land decreases, leading to an increase in the price of the remaining non-wetland land. Additionally, as the non-wetland land becomes more scarce and valuable, its marginal product is likely to rise.

Suppose the Government Designates Certain Areas Within a Community to Be