Economics 9708 · AS & A Level · Factors of production

Factors of production — practice question

An actor receives $100 000 each year. The best alternative job he could take is a lecturer position paying $60 000 each year. What are his transfer earnings and his economic rent?

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

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