-Refer to the Figures Above to Answer This Question

Multiple Choice

-Refer to the figures above to answer this question. Figure B represents the market for ________ because ________, all else held the same.

A) land; the Hotelling Principle states rental rates will increase predictably over time
B) capital; as the rental rate increases, the quantity of capital supplied increases and the quantity of capital demanded decreases
C) land; landowners respond to higher rental rates by making more land available
D) capital; the Hotelling Principle predicts that prices will vary inversely with the interest rate
E) a nonrenewable resource; as the interest rate increases, less of the resource is supplied