Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 29, Problem 10E
To determine
To find:
The transfer earnings and the economic rent.
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- How does the economist’s use of the term “rent” differ from everyday usage? Explain: “Though rent need not be paid by society to make land available, rental payments are useful in guiding land into the most productive uses.”arrow_forwardEconomists argue that most professional athletes earn economic rent because they A - make additional income through commercial endorsements B - able to participate in sports for only a limited number of years before changing occupations c - earn far more as professional athletes than they could earn in their next-best occupation why is the answer c? please explainarrow_forwardFred currently works for a corporate law firm. He is considering opening his own legalpractice, where he expects to earn $200,000 per year once he gets established. To run his ownfirm, he would need an office and a law clerk. He has found the perfect office, which rents for$50,000 per year. A law clerk could be hired for $35,000 per year. If these figures areaccurate, would Fred’s legal practice be profitable?arrow_forward
- Lucille receives an annual salary of $37,500 based on a 37.5-hour workweek. What are her gross earnings for a two-week pay period in which she works 9 hours of overtime at 1 1/2 times her regular rate of pay? (Assume there are exactly 52 weeks in a year. Round your answer to the nearest cent.) Gross earnings =arrow_forwardWhich of the following represents a transfer payment? O The government sends your grandmother her social security check. Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account. You transfer $1,000 from your bank account to a mutual fund. O You make a payment to get legal documents for a previously owned home.arrow_forwardEconomics The Raleigh City Council has just voted to levy a sizable per-garage-space tax on single family homes, arguing that garages, and especially multi- car garages, are an excellent indicator of the earnings of the residents. Why would the City want to impose such a tax? What are some potential problems with this tax? What changes in single- family homes might you predict if the new tax is implemented? And what changes in the amount of home building might you expect relative to Chapel Hill or Durham?arrow_forward
- How might a company continue to do business without paying higher wages?arrow_forwardRecall our example of t-shirt manufacturing in Lubbock. You started the business with your friend and selling each t-shirt for $10. However, people are not buying from you. Why is that happening? Now you figured that there are cheaper means to produce each t-shirt at $7 and you changed your t-shirt price to $9 making some positive economic rent. Will this last forever? Why or why not?arrow_forwardBrad Edwards is earning $36,000 a year in a city located in the Midwest. He is interviewing for a position in a city with a cost of living 18 percent higher than where he currently lives. What is the minimum salary Brad would need at his new job to maintain the same standard of living?arrow_forward
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