If a major league baseball player would be willing to work for $700,000 per year and is currently being paid $1,200,000 per year, that player is earning an annual economic rent of

Question

Quizplus · Accepted Answer

Economic rent is the difference between the actual amount paid for a resource and the minimum amount that the resource owner would be willing to accept for that resource. In this case, the player is willing to work for $700,000, but is currently being paid $1,200,000. The economic rent would be the difference between the two amounts, which is $500,000. Therefore, the correct answer is D.

If a Major League Baseball Player Would Be Willing to Work