The earnings of a factor in its best alternative use is called its
A)intrinsic value.
B)alternative value.
C)transfer earnings.
D)economic earnings.
E)economic profit.

Question

Quizplus · Accepted Answer

Transfer earnings refer to the earnings that a factor can generate in its best alternative use. It is the minimum payment that a factor must receive to stay in its current use. Therefore, option C is the correct answer. Options A, B, D, and E are either incorrect or do not accurately describe transfer earnings.

The Earnings of a Factor in Its Best Alternative Use