Asked by Alexis Klein on Apr 29, 2024
Verified
Economic or pure rent is:
A) a payment made for the use of housing,factory buildings,or capital goods.
B) a payment for resources used in the production of "free goods."
C) a payment for the use of those resources whose supply is perfectly elastic.
D) the price paid for the use of land and other nonreproducible resources.
Pure Rent
The income derived from the inherent attributes of a resource or property, exclusive of any improvement made by human effort.
Reproducible Resources
Resources that can be grown, naturally replenished, or reproduced to sustain their availability over time, unlike finite resources.
Capital Goods
Long-term physical assets utilized by businesses to produce goods and services.
- Understand the principle of economic rent and how it differentiates from other types of income.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
D
Explanation :
Economic or pure rent is the price paid for the use of land and other nonreproducible resources. This payment is not for the use of capital goods or housing but for the use of a natural resource for which supply is limited, making its price determined by demand. Option A refers to rent generally, while option B is incorrect as there is no such thing as "free goods" in economics; and option C refers to a situation where the supply of a resource is perfectly elastic, which means that the price paid for that resource would be zero.
Learning Objectives
- Understand the principle of economic rent and how it differentiates from other types of income.