Economics 9708 · AS & A Level · Factors of production

Factors of production — practice question

A fashion model earns $100 000 a year. The highest-paid alternative job she could obtain is a teaching job at $60 000 a year. Determine her transfer earnings and her economic rent.

  • Atransfer earnings $60 000; economic rent zero
  • Btransfer earnings $60 000; economic rent $40 000
  • Ctransfer earnings $100 000; economic rent zero
  • Dtransfer earnings $100 000; economic rent $40 000

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