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Posts: 73
2 weeks ago
The Hawaiian island of Lana'i is privately owned by Castle & Cooke and for generations most of its land was used to grow pineapples. Now, many of the pineapple fields have been replaced by tourist accommodations, including a pair of world-class hotels and a top rated golf course. What would an economist say about this change in land-use patterns?

• While growing pineapples used the island's land more efficiently, tourism provides utility to the largest number of people.

• Agriculture is still the land's highest-valued and most efficient use, but tourism earns more profits for Castle & Cooke.

• Economic rent has allocated the island's resources to their highest valued use: tourism.

• To find the land's economic rent, add the price per acre that land on Lana'i would be worth if used to grow pineapples to the value per acre when used for a golf course.
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Economics Today: The Micro View
Edition: 19th
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2 weeks ago
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Economic rent has allocated the island's resources to their highest valued use: tourism.
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2 weeks ago
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