Which of the following is a term used to describe a payment representing a surplus in excess of transfer costs?
Interest rates
Opportunity costs
Economic rent
Indirect costs
Wages
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What is 'Economic Rent'
An excess payment made to or for a factor of production over and above the amount expected by its owner. Economic rent is the positive difference between the actual payment made for a factor of production (such as land, labor or capital) to its owner and the payment level expected by the owner, due to its exclusivity or scarcity. Economic rent arises due to market imperfections; it would not exist if markets were perfect, since competitive pressures would drive down prices. Economic rent should not be confused with the more commonly used “rent,” which simply refers to a payment made for temporary use of an asset or property.
An economic rent z meant 2 be defined as an extra amount earned by a resourses (e.g land, labour and capital) by virtue of its present use.
