If a major league baseball player would be willing to work for $500,000 per year and is currently being paid $1,200,000 per year, that player is earning an annual economic rent of

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Quizplus · Accepted Answer

Economic rent is the difference between what a resource earns in its current use and what it could earn if it were used in its best alternative use. In this case, the player's best alternative use would be earning $500,000 per year. Therefore, his annual economic rent would be $700,000 ($1,200,000 - $500,000).

If a Major League Baseball Player Would Be Willing to Work