How can bonuses to exceptional employees be considered economic rents?
The payment for any input can be divided into two parts. The first part is simply the minimum payment needed to acquire the input. If workers do not receive at least this first part, they will not supply their labor. The second part of the payment is a bonus that does not go to every input, but only to inputs of particularly high quality. Payments to workers with exceptional natural skills are a good illustration of the generalized rent concept. Because these bonuses are like the extra payment for a better piece of land, they are called economic rents.
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The United States imports cheese from a variety of countries. The table above gives the domestic supply of, and demand for, cheese in the United States. The world price of cheese is $12 per pound, and trade is unrestricted
a. How many pounds of cheese are consumed in the United States? b. How many pounds of cheese are produced in the United States? c. How many pounds of cheese are imported into the United States? If a $3 per pound tariff is imposed, d. How many pounds of cheese are consumed in the United States? e. How many pounds of cheese are produced in the United States? f. How many pounds of cheese are imported into the United States? g. How much will the U.S. government collect in tariff revenue? h. Who benefits from the tariff? Who loses?
The table above shows the marginal costs and marginal benefits of college education. If 8 million students are enrolled, the marginal external benefit is
A) zero. B) $4,000. C) $5,000. D) $7,000.
An economy with only the household and firm sectors is called:
A) a mixed economy. B) a private economy. C) a command economy. D) none of the above.
Suppose you buy an iPod for $100 . If your consumer surplus is $30, your willingness to pay is $70
a. True b. False Indicate whether the statement is true or false