Asked by Katie Creager on Jun 14, 2024
Verified
The return to any factor of production that is in ________ is pure rent.
A) variable supply
B) fixed supply
C) fixed demand
D) variable demand
Pure Rent
Pure Rent refers to the income earned from the use of land or other natural resources when supply is perfectly inelastic.
Fixed Supply
A situation where the quantity of a good available is constant and does not change in response to price changes.
- Familiarize yourself with the principle of pure rent and its correlation with factors of production that have a constant supply.
Verified Answer
BS
Brandon SauvalJun 14, 2024
Final Answer :
B
Explanation :
The return to any factor of production that is in fixed supply is considered pure rent. This is because the supply cannot be increased in response to increased demand, leading to earnings that are considered rent rather than profit or wages.
Learning Objectives
- Familiarize yourself with the principle of pure rent and its correlation with factors of production that have a constant supply.