A tax on economic rent would most likely:
A)reduce considerably the supply of land in use.
B)increase greatly the supply of land in use.
C)have little or no effect on the supply of land in use.
D)change the supply of land in use, but not in a predictable way.
E)be shifted forward onto the consumer.

Question

Quizplus · Accepted Answer

A tax on economic rent, which is the income generated by the use of a scarce resource such as land, would not affect the supply of land in use. This is because the supply of land is fixed and cannot be increased or decreased in response to changes in demand or taxation. Therefore, the tax would be borne entirely by the landowner and would not affect the amount or quality of land available for use.

A Tax on Economic Rent Would Most Likely