Multicollinearity - Consequences, Detection and Remedies

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Mathematical Methods for Economics I

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Ricardian Theory of Rent – David Ricardo (1817) Introduction The Ricardian Theory of Rent was developed by David Ricardo in Principles of Political Economy and Taxation (1817). Ricardo argued that nature endowed land with “original and indestructible powers.” These inherent qualities make agricultural production yield more than the total payments to other factors of production. After compensating labor, capital, and other inputs, a surplus remains , which is claimed by the landowner as rent . Ricardo introduced two mechanisms— intensive cultivation and extensive cultivation —to explain how rent emerges from differences in land productivity. Intensive Cultivation Intensive cultivation involves raising productivity on the same plot of land by using better techniques, more labor, or additional capital. With such improvements, output rises without expanding into less fertile land. A farmer continues to employ additional labor as long as the marginal revenue product of labor (MRPL) exceeds ...
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Set Theory – Concepts and Definitions

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