Chapter 29: Problem 1

Which statement is true? (LOl) a) All land has the same economic value. b) The most important factor affecting rent is location. c) The economic value of a plot of land is determined exclusively by the raw materials it contains. d) None of these statements is true.

Short Answer

Expert verified

The correct statement is (b) - "The most important factor affecting rent is location."

Step by step solution

Analyze statement (a)

Statement (a) says, "All land has the same economic value." This statement seems incorrect since the economic value of land is determined by factors such as location, size, demand, resources available, and many other variables. Therefore, it is not accurate to state that all land has the same economic value.

Analyze statement (b)

Statement (b) claims, "The most important factor affecting rent is location." It is widely recognized that location plays a significant role in determining the rent for a piece of land. A plot of land in a desirable location will likely have a higher rent than a plot in a less desirable one. Therefore, this statement seems plausible.

Analyze statement (c)

Statement (c) says, "The economic value of a plot of land is determined exclusively by the raw materials it contains." Although raw materials on a plot of land can certainly affect its value, it is not the only factor. As mentioned previously, factors such as location, size, and demand also play a role in determining the economic value of a plot of land. Thus, statement (c) is not true.

Analyze statement (d)

Statement (d) declares, "None of these statements is true." We have already determined that statement (a) and statement (c) are false, but statement (b) seems to be a valid claim. Therefore, statement (d) cannot be true since it contradicts statement (b).

Choose the correct statement

Based on our analysis of each statement, we can conclude that statement (b) - "The most important factor affecting rent is location." - is the true statement among the given options.