The price paid to a resource in totally fixed supply is called
A)economic rent
B)economic profit
C)wages
D)interest
E)opportunity cost

Question

Quizplus · Accepted Answer

Economic rent is the price paid for the use of a resource that is in totally fixed supply. This means that the price is determined by the demand for the resource and not by the cost of producing it. Examples of resources in totally fixed supply could include land or a rare mineral deposit. Economic rent is also different from wages, interest, and economic profit because those factors are affected by both supply and demand. Opportunity cost is a broader concept that refers to the value of what must be given up in order to pursue a certain action or use a resource.

The Price Paid to a Resource in Totally Fixed Supply