ECONOMICS

ECONOMICS

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• By:

• Mrs.Neeru Rohilla

• Associate Professor

• M.A.W.College ,Jhajjar

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What is rent Types of Rent Theories of Rent

Types of Rent

• Economic rent

• Total rent

• Scarcity rent

• Differential rent

• Situation rent

RICARDIAN THEORY

• According to this theory rent is that portion of the produce of land which is paid to the

landlord for the use of original and indestructible powers of the soil

• Rend accrues only to land

• It is the difference of the prduce of intra marginal land and marginal land

RICARDIAN THEORY IN EXTENSIVE CULTIVATION

LAND PRODUCTI ON

SURPLUS OVER MARGINL LAND

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A 10 10-4 6

B 8 8-4 4

C 6 6-4 2

D{MARGI NAL

LAND}

4 4-4 0

LAND PRODUCTI ON

SURPLUS OVER MARGINL LAND

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A 10 10-4 6

B 8 8-4 4

C 6 6-4 2

D{MARGI NAL

LAND}

4 4-4 0

DIAGRAMATIC PRESENTATION IN

EXTENSIVE CULTIVATION

RICARDIAN THEORY IN INTENSIVE CULTIVATION

LAND PRODUCTI ON

SURPLUS OVER MARGINL LAND

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A 10 10-4 6

B 8 8-4 4

C 6 6-4 2

D{MARGI NAL

LAND}

4 4-4 0

UNITS OF LAND AND LABOURE RS

PRODUCTI VITY

SURPLUS OVER MARGINL UNIT

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A 10 10-4 6

B 8 8-4 4

C 6 6-4 2

D{MARGI NAL UNIT}

4 4-4 0

DIAGRAMATIC PRESENTATION IN

INTENSIVE CULTIVATION

CRITICISM

• FERTILITY OF THE SOIL IS NEITHER ORIGINAL NOR DESTRUCTIVE

• HISTORICALLY WRONG

• NO RENT LAND

• RENT S NOT PAID ONLY FOR LAND

• REASONS FOR DETERMINATION OF RENT NOT PROPERLY EXPLAINED

• UNREALISTIC ASSUMPTION OF PERFECT COMPETITION

• INCOMPLETE THEORY OF RENT

• ALTERNATIVE USES OF LAND

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