Economic rent and the market for land

Consider the market for land in downtown Florence, a vibrant urban area with hundreds of years of rich history, as compared to the market for land in rural Tuscany, the surrounding countryside in central Italy.

Because the supply of land in downtown Florence is _____ , buyers in downtown Florence pay _____ for use of the land.

The rental price of land is much higher in downtown Florence than in less densely populated areas like rural Tuscany. One possible explanation for this rent difference is that highly productive land is in high _______ .

Some entrepreneurs decide to build parking lots in downtown Florence. The supply curve for land to be used for parking lots is _______ .

Fill in the blank options are.... Blank 1= Perfectly elastic, or perfectly inelastic

Blank 2= an interest rate, an economic rent, or an economic profit

Blank 3= Supply or demand

Blank 4= Horizontal, downward sloping, upward sloping, or vertical