Suppose the government designates certain areas within a community to be "wetlands," making it illegal to build on the land. What happens to land not classified as "wetlands" within the community? (i)
The price of non-wetland land will rise.(ii)
The marginal product of non-wetland land will fall.
(iii)
The marginal product of non-wetland land will rise.
A)(i) and (ii) only
B)(ii) only
C)(i) and (iii) only
D)(iii) only

Question

Quizplus · Accepted Answer

When certain areas are designated as "wetlands" and are restricted from development, the supply of developable land decreases, leading to an increase in the price of the remaining non-wetland land. Additionally, the marginal product of non-wetland land will rise because the remaining land becomes more valuable and productive due to its scarcity.

Suppose the Government Designates Certain Areas Within a Community to Be