212

POLITICAL  ECONOMY

Doses  of  labour
and  capital  of
£5  each.
1
2
3
4
5
6

Value  of  total
returns  at
constant  price.
£7  .  .
£16  ..
£24  ..
£30  ..
£35  ..
£39  ..

Value  of
marginal  returns.
..  £7
..  £9
..  £8
..  £6
..  £5
..  £4

Five  doses  will  be  applied,  as  the  marginal
return  for  five  doses  of  £5  each  is  £5  :  the
application  of  a  sixth  dose  would  cause  loss.
The  total  earnings  of  the  farmer  and  his
agents  in  production  will  be  five  times  £5,  or
£25.  The  value  of  the  aggregate  return  is  £35.
Hence  the  rent  is  £35  less  £25,  that  is  £10.
Two  corollaries  may  be  deduced  from  this
demonstration.  The  one  is  that,  other  things
being  equal,  the  most  favourably  situated
land  will  be  worked  the  most  intensively.
The  other  is  that  more  doses  of  labour  and
capital  will  be  applied  in  making  use  of  the
more  favourably  situated  building  sites  than  in
making  use  of  the  less  favourably  situated
ones.  In  proof  it  is  sufficient  to  point  to  the
high  and  costly  buildings  in  the  centres  of
large  towns.

My  next  purpose  must  be  to  indicate  that  the