Chapter 17: Problem 9

Which statement is true? \((\mathrm{LO3})\) a) Prices are high because rents are high. b) Rents are high because prices are high. c) David Ricardo believed high rents would drive English farmers out of business. d) None of the above.

Short Answer

Expert verified

The true statement is d) None of the above.

Step by step solution

Analyze Statement a)

Prices are high because rents are high. This statement suggests that high rents are the cause of high prices. However, this statement is somewhat incomplete, as high prices may not always be due to high rents. Other factors, such as supply and demand, can also affect prices. Therefore, this statement cannot be considered true in isolation.

Analyze Statement b)

Rents are high because prices are high. Similar to the previous statement, this one suggests that high prices are causing high rents. While there can be a correlation between the two, rents and prices are affected by various factors, and a direct causation cannot be generalized. Thus, this statement is not necessarily true.

Analyze Statement c)

David Ricardo believed high rents would drive English farmers out of business. This statement refers to the economist David Ricardo and his theory on land rents and agriculture. Ricardo did argue that high rents could be harmful to farmers, as it would lead to increased costs and ultimately make farming less profitable. However, he did not claim that high rents would directly "drive English farmers out of business." Therefore, this statement is not entirely accurate.

Analyze Statement d)

None of the above. Since none of the previous statements are entirely true, this statement is correct. All the given statements either misrepresent the relationship between prices and rents or inaccurately relate the views of David Ricardo. #Conclusion#: After analyzing the four statements, it is determined that the true statement is: d) None of the above.

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