Michelle can work at job A earning $50,000 a year, job B earning $83,000 a year, or job C earning $85,000 a year. If Michelle chooses job C, then her economic rent from working at that job rather than job A is

Question

Quizplus · Accepted Answer

Economic rent is the difference between what a worker earns and what they could earn in their next best alternative. In this case, Michelle's next best alternative is job A, which pays $50,000 a year. Therefore, her economic rent from working at job C is $85,000 - $50,000 = $35,000.

Michelle Can Work at Job a Earning $50,000 a Year