A person who receives a higher wage than would be necessary as an inducement to work is said to be receiving:
A)rent.
B)profit.
C)interest.
D)surtax income.
E)marginal product.

Question

Quizplus · Accepted Answer

Rent refers to any payment made to a factor of production that exceeds the minimum amount required to induce that factor to be supplied. In the context of labor, rent is the portion of a worker's wage that is paid above their reservation wage (i.e. the minimum amount they would be willing to accept to do the job). Therefore, if a person receives a higher wage than would be necessary as an inducement to work, they are receiving rent.

A Person Who Receives a Higher Wage Than Would Be