An economy is in a Malthusian subsistence equilibrium. A new farming technique is introduced that permanently increases the productivity of land. Arrange the following events in the correct chronological sequence as the economy adjusts to a new long-run equilibrium.

Landowner's Strategic Decision

A powerful landowner controls all the arable land in a region and employs a landless farmer to work it. The landowner's sole objective is to maximize the amount of grain they can extract from the farmer's labor over the long term. From a purely self-interested perspective, why would the landowner provide the farmer with an allocation of grain that is just enough to meet the farmer's minimum survival needs?

Strategic Considerations for a Landowner

Landowner's Strategic Calculation

A self-interested landowner, aiming to maximize their own long-term grain surplus, would logically choose to give a landless farmer the smallest possible amount of grain, even if it falls below the farmer's survival threshold, because any grain given to the farmer is a direct reduction of the landowner's surplus.

A self-interested landowner wants to maximize their long-term surplus from a farmer working their land. Match each of the landowner's potential considerations with its underlying strategic rationale.

Evaluating a Landowner's Strategy

Consequence of a Landowner's Miscalculation

A landowner, whose primary goal is to maximize their personal grain surplus over many years, employs a farmer who has no other means of survival. The farmer requires a minimum of 4 bushels of grain per year to survive and be able to work in subsequent years. Considering only the landowner's long-term self-interest, which of the following allocation strategies is the most logical for the landowner to choose?

Strategic Considerations for a Landowner