Professor Simpson earns $80,000 per year teaching at the local college.Due to budget cutbacks,the college cuts her annual salary to $50,000 per year.Professor Simpson remains at the college and her behavior at work is not affected by the salary cut.It follows that

Question

Quizplus · Accepted Answer

The $30,000 cut from Professor Simpson's salary was entirely economic rent because her behavior and decision to stay at the college were not affected by the salary reduction, indicating that the $30,000 was not necessary to retain her services.

Professor Simpson Earns $80,000 Per Year Teaching at the Local