Question

Ricardian Corn Theory of Rent (Please, Show Calculations)

Assumption:

1. Assume that there are parcels of land with three levels of fertility.

• There are 300 acres of quality 1 land that produces 200 bushels of corn per acre with one dose of labor-capital.
• There are 200 acres of quality 2 land that produces 150 bushels of corn per acres with one dose of labor capital.
• There are 100 acres of land of quality 3, which produces 100 bushels of corn per acre with one dose of labor capital.

Assumption:

2. Assume that only one dose of labor-capital can be applied to each acre of land.

• One dose of labor-capital includes 1 worker working for a year.
• The subsistence level of consumption for a worker is 75 bushels of corn per year.

Assumption:

3. Assume that the population grows such that 95,000 bushels are now required.

Question:

What percentage of the total production goes to each class?

Answer 1