A

1. Distinguish between economic rent and commercial rent.

2. Why is one piece of farm land preferred to another piece ?

3. What factors determine this preference?

4. What is no-rent land?

5. Just how can a farmer afford to operate no-rent land?

6. How does a change in the price of wheat affect the economic rent of wheat lands ?

7. What effect has soil "butchery" on economic rent?

8. Just how does improved means of transportation affect economic rent?

9. How in general is economic rent affected by an increase in population ?

10. How does custom and habit assist to determine the economic rent of store sites?

11. What other factors are important?

12. Explain what is meant by "unearned increment."

13. What is the relation between this increment and the single tax?

14. Distinguish clearly between an "increment" and a "decrement."

15. What is the relation between economic rent and price?

16. Why does economic rent not enter into price ?

17. Just how does the interest rate affect land values ?

B

1. Make a tour of inspection about your community.

a. Notice the wide variations in the utilization of business sites.

b. Do these business sites yield more or less than equal-sized sites in the residence districts?

c. Notice the sites which form a fringe about the business section.

i. How are they utilized?

ii. What about the improvements found there? iii. Do they seem to be in a state of transition ? Explain.

d. Contrast the various residence sections.

i. What factors cause some sites to yield more economic rent than others? ii. Just how do these factors differ?

e. Notice the number and location of vacant sites.

i. Why are these not utilized?

ii. Are there evidences of owners trying to secure unearned increments ? f. Widen your definition of "urban economic rent."

2. Suppose you were to become heir to a cultivated farm located in Patagonia. How would you determine its selling price ?

3. Inquire among business men and others concerning some instance of unearned increment.

a. Determine as accurately as possible the size of the increment (difference between buying price and selling price).

b. Estimate the interest on the investment at a fair rate.

c. Subtract from the interest any income that may have been received.

d. What portion of the increment appears to have been unearned ?

e. Is this portion more or less than it seemed to be when you began your examination?

4. Find an example of "decrement" in your community.

a. What influences caused this decrement?

b. Have you heard any one propose that society should compensate the owner for his loss ? Who ?

5. If you were seeking a site for a cigar store, how would the location of the following influence you: a. Other cigar stores?

b. Dry goods stores ?

c. Restaurants ?

d. Show houses ?

e. Garages ? /. Hotels?

g. Soda fountains ? h. Drug stores? i. Railway depots?

C

1. A prominent United States senator once made the public statement that the high prices of farm products then prevailing were caused by high rents.

a. Would you expect this statement to be criticized? Why?

b. What fixes the price of any farm product ?

c. What is the relation between the prices of farm products and the economic rent of the land on which they are grown?

2. Why does the contract rent of a piece of land often differ widely from its economic rent?

3. How are the following likely to affect the economic rent of farm lands: a. Improved machinery?

b. Discovery of new fertilizer?

c. Improved methods in farming ?

d. Change in interest rate ?

e. Automobiles ?

4. A merchant located on the fringe of a business district often advertises that he can, owing to the low rent which he pays, sell goods cheaper than competing merchants nearer the business center.

a. Why is his rent lower than theirs?

b. Suppose he gets the business of his competitors.

i. How will the economic rent of his site be affected? ii. How would this affect his contract rent? iii. Would this claim of cheap rent continue to be valid? Explain.

c. Does his lower rent permit him to undersell his competitors ?

5. Assuming that each piece of farm land yields its entire economic rent to its owner, why do tenants prefer one piece over another? Explain with some detail.

6. Sometimes a retail merchant advertises that he can afford to undersell his competitors because he happens to own the store site which he utilizes.

a. Does the land underneath his store building earn rent?

Explain.

b. Suppose a competitor who does not own his store building should invest the value of his site in railroad bonds.

i. Would he be justified in advertising that he could undersell his competitors because he owned bonds?

ii. How would the buying public regard such an advertisement?

c. If he can afford to distribute his rent among his customers, why should he not also advertise that he can undersell his competitors because he owns his own capital or because his wife and children wait on his customers without pay?

Supplementary Reading

Bullock, Introduction to the Study of Economics, 3d ed., pages 435-446.

Ely, Outlines of Economics, 3d ed., pages 407-426.

Fetter, Economics, Vol. I, pages 89-168.

Johnson, Introduction to Economics, pages 215-231.

Seager, Principles of Economics, pages 229-243.

Seligman, Principles of Economics, 5th ed., pages 371-391.

Taussig, Principles of Economics, 2d ed., Vol. II, pages 55-106.