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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Give an example to illustrate that economic rent varies with the perspective from which a factor is viewed.

To determine

Identify the economic rent that varies with different perspectives.

Explanation

Economic rent is a payment over the opportunity cost of a commodity. The amount of economic rent varies with the outlook from which a factor is viewed. For example, consider person A is working in the news industry and earns $2 million in a year. A’s opportunity cost in the news industry is earning $1.9 million for another news company. Thus, the economic rent of A in the news industry is $100,000 ($2million - $1...

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