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JAMB Economics 1995 Question 12

Question 12

Labour Market

Any payment to a factor of production in excess of what is necessary to keep that factor in its present employment is known as

  1. A.real income
  2. B.profit
  3. C.economic rent
  4. D.real wage.
Show the answer and explanation

Answer: C (economic rent)

Explanation

Economic rent is the surplus a factor earns above its transfer earnings, the minimum needed to keep it in its present use.