Economic rent is the difference between the payment actually received by the owner of a factor of production (such as land, labor or capital) and their reservation price, which is the minimum price they are willing to accept for that factor. This means that economic rent is essentially the amount of money the owner receives above and beyond what they would have been willing to accept.

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Economic Rent Is

Question 15

Multiple Choice

Economic rent is

A) the sum of the payment actually received by an owner of a factor of production and her reservation price.
B) the difference between the payment actually received by the owner of a factor of production and her reservation price.
C) the payment actually received by an owner of a factor of production.
D) the reservation price of an owner of a factor of production.

Correct Answer: