By the end of this chapter, you should understand:

1. the markets for capital and land
2. how incomes of factors are determined
3. functional and personal distributions of income
4. flows over time and stocks at a point in time
5. the markets for capital services and for new capital assets
6. the concept of present value
7. nominal and real interest rates
8. how saving and investment determine the real interest rate
9. how land is allocated between competing uses