Asked by JOSHUA MILLER on May 26, 2024
Verified
Which statement is true?
A) The highest paid professional athletes earn economic rent.
B) Economic rent is paid on land,but not in the form of wages.
C) Economic rent is earned mainly by the poor and the lower middle class.
D) Economic rent is paid in proportion to the marginal revenue product of a resource.
E) None of the statements are true.
Economic Rent
A payment to an owner or factor of production in excess of the costs needed to bring that factor into production.
Marginal Revenue Product
The additional revenue generated from using one more unit of a factor of production.
Wages
Payments made to employees for their labor, typically calculated on an hourly, daily, or piecework basis.
- Understand the concept of economic rent in relation to wages and property.
Verified Answer
PT
phakamani tshabanguMay 30, 2024
Final Answer :
A
Explanation :
Economic rent refers to earnings that exceed the minimum amount necessary to keep a factor of production in its current use. High-paid athletes earn more than what would be necessary to keep them playing their sport, thus earning economic rent.
Learning Objectives
- Understand the concept of economic rent in relation to wages and property.