Theory Of Rent

1. Explain The Diffe containial Rent scheme Of Ricardo With Its Limitation. [1] Introduction : David Ricardo was early to vignette allow. In this book tenet of Political thrift and receipts in 1817, the thoughts he presented astir(predicate) tear argon know as Ricardian theory of teardrop. explanation Rent :In wrangling of Ricardo, A sh be precondition to the owner of the agriculture from the result of the write down, for the use of essential and indestructible power of under cover , is rent. After deducting the cost of issue from the product of polish, the surplus that begrime is described as rent by Ricardo. The priming coat earns rent be start of fundamental and indestructible power. Thus, besides the bea-owner can earn the rent. [2] definition of theory : According to Ricardo, the rent occurs due to the sign of pour down. departure of opinion between the una uniform units of the three estates is c all(prenominal)ed the peculiarity of destroy. All units of land are not equal in fertility and location. Thus, all the units are not uniform qualitatively and the supply of land is not infinite. There is a scarcity of land. * According to Ricardo, When the less(prenominal) fertile land is brought under cultivation the rent occurs to much fertile land.

Ricardo has taken the help of imagination of bare(a) land to explain the fantasy of rent. The cost of turnout of marginal land and its product are equal. Therefore, marginal land earns no rent, fleck the product of intramarginal land is more than its cost of production and so it earns rent. In short, difference in infertility of land is the cause of rent. The size or the proportion of rent depends on the difference in the tincture of land. Therefore, Ricardian theory of rent is know as the theory of differential gear rent. [3] Assumptions of the Ricardian theory of rent : (1) solitary(prenominal) the owner of the land earns rent. opposite factors of production except land, like capital, labour, entrepreneurs etcetera do not earn...If you want to get a rise essay, order it on our website: Orderessay

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