The charge for the use of the summit of Mt.Everest by a snow cone company (allowing that the sale of snow cones is the only activity the summit is useful for)is an example of:
A)external economies.
B)pure economic rents.
C)backward-bending supply.
D)the law of diminishing returns.
E)none of the above.

Question

Quizplus · Accepted Answer

Pure economic rents refer to the payment made for the use of a scarce resource that has no alternative use. In this case, the summit of Mt.Everest is a scarce resource that has no alternative use except for the sale of snow cones. Therefore, the charge for the use of the summit is an example of pure economic rent.

The Charge for the Use of the Summit of Mt