In an input market, economic rent is defined as
a. the total remuneration paid to a factor of production.
b. the minimum amount required to retain a factor of production in its present use.
c. the total cost for a firm of renting land, equipment, and buildings.
d. the extent to which payments to a factor of production exceed the minimum amount required to retain it in its present use.
d
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Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?
A) point a B) point b C) point c D) point e
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is $0.10 = 1 peso. Furthermore, suppose the price level in Mexico rises 15 percent while the U.S. price level remains constant. According to the purchasing power parity theory, which of the following exchange rates comes closest to being the equilibrium exchange rate?
A) $0.087 = 1 peso B) $0.085 = 1 peso C) $0.115 = 1 peso D) $0.13 = 1 peso