Asked by Brittney Kersey on Apr 29, 2024
Verified
Economic rent refers to the price paid for land and other natural resources that
A) are fixed in total supply.
B) vary directly with their market prices.
C) vary inversely with their market prices.
D) are available in nearly unlimited quantities.
Economic Rent
The portion of income earned from a factor of production (land, labor, or capital) that exceeds the minimum amount necessary for it to be utilized in its current use.
Natural Resources
Materials or substances occurring in nature which can be exploited for economic gain, such as minerals, forests, water, and fertile land.
Fixed Supply
A situation where the quantity of a particular good, service, or resource does not change regardless of price changes.
- Capture the essence of economic rent and its function as an incentive.
- Understand the effects of limited flexibility in land supply on economic conditions.
Verified Answer
PM
Prabh ManesMay 02, 2024
Final Answer :
A
Explanation :
Economic rent refers to the payment made for the use of land and other natural resources that are fixed in total supply. This concept is based on the idea that the supply of these resources does not increase in response to increased demand, making their price a form of rent for their use.
Learning Objectives
- Capture the essence of economic rent and its function as an incentive.
- Understand the effects of limited flexibility in land supply on economic conditions.