{"id":872,"date":"2023-07-12T03:06:08","date_gmt":"2023-07-12T03:06:08","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/?post_type=chapter&#038;p=872"},"modified":"2023-07-12T17:03:28","modified_gmt":"2023-07-12T17:03:28","slug":"reading-economic-rent","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/chapter\/reading-economic-rent\/","title":{"raw":"Reading Economic Rent","rendered":"Reading Economic Rent"},"content":{"raw":"There are many different definitions of economic rent. It occurs primarily with resources that have a fixed supply. Economic rent is\u00a0<em>the revenue that can be earned from the land or other natural resource for which there is a fixed supply.<\/em>\r\nPrice\r\n\r\n<img class=\"alignnone size-medium wp-image-873\" src=\"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-11-at-8.55.27-PM-300x293.png\" alt=\"\" width=\"300\" height=\"293\" \/>Quantity\r\n\r\nNotice the vertical supply curve, at a fixed level of output, price is solely defined by the demand curve.\u00a0 Land particularly has economic rent because of the fact that price has much to do with location. Economic rent refers to extra money that a person makes over the amount they expect. Thus, prime locations can have a great deal of economic rent.\r\n\r\nEconomic rent also occurs in the labor market. However, the level of economic rent is determined by how much that worker is able to earn at another job (called transfer earnings).\r\n\r\n<img class=\"alignnone size-medium wp-image-877\" src=\"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM-300x230.png\" alt=\"Quantity of Labor on the x-axis, Wages or price of labor on the y-axis, a downward sloping demand curve and upward sloping supply curve equilibrium is the quantity of labor hired the distance under supply curve to equilibrium is transfer earnings the distance above supply curve to wage rate is economic rent\" width=\"300\" height=\"230\" \/>\r\n\r\nIn terms of labor, transfer earnings are the minimum reward necessary to prevent a worker from transferring to their next best source of employment.","rendered":"<p>There are many different definitions of economic rent. It occurs primarily with resources that have a fixed supply. Economic rent is\u00a0<em>the revenue that can be earned from the land or other natural resource for which there is a fixed supply.<\/em><br \/>\nPrice<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-873\" src=\"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-11-at-8.55.27-PM-300x293.png\" alt=\"\" width=\"300\" height=\"293\" srcset=\"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-11-at-8.55.27-PM-300x293.png 300w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-11-at-8.55.27-PM-65x64.png 65w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-11-at-8.55.27-PM-225x220.png 225w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-11-at-8.55.27-PM-350x342.png 350w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-11-at-8.55.27-PM.png 538w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>Quantity<\/p>\n<p>Notice the vertical supply curve, at a fixed level of output, price is solely defined by the demand curve.\u00a0 Land particularly has economic rent because of the fact that price has much to do with location. Economic rent refers to extra money that a person makes over the amount they expect. Thus, prime locations can have a great deal of economic rent.<\/p>\n<p>Economic rent also occurs in the labor market. However, the level of economic rent is determined by how much that worker is able to earn at another job (called transfer earnings).<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-877\" src=\"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM-300x230.png\" alt=\"Quantity of Labor on the x-axis, Wages or price of labor on the y-axis, a downward sloping demand curve and upward sloping supply curve equilibrium is the quantity of labor hired the distance under supply curve to equilibrium is transfer earnings the distance above supply curve to wage rate is economic rent\" width=\"300\" height=\"230\" srcset=\"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM-300x230.png 300w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM-1024x785.png 1024w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM-768x589.png 768w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM-65x50.png 65w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM-225x173.png 225w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM-350x268.png 350w, https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-content\/uploads\/sites\/143\/2023\/07\/Screenshot-2023-07-12-at-10.54.35-AM.png 1320w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/p>\n<p>In terms of labor, transfer earnings are the minimum reward necessary to prevent a worker from transferring to their next best source of employment.<\/p>\n","protected":false},"author":107,"menu_order":5,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-872","chapter","type-chapter","status-publish","hentry"],"part":843,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/users\/107"}],"version-history":[{"count":5,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/872\/revisions"}],"predecessor-version":[{"id":880,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/872\/revisions\/880"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/parts\/843"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/872\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/media?parent=872"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapter-type?post=872"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/contributor?post=872"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/license?post=872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}