The concept of 'Economic Rent' in classical economics refers to:
A. Payment for the use of land arising from its scarcity
B. Wages of labour
C. Payment for the use of capital only
D. Profit of the entrepreneur
Answer: Option A
Solution (By JKSSB Mock Tests)
In classical economics, economic rent is the payment made for the use of land (or other resources in fixed supply) that arises due to its scarcity and differential fertility.
Explanation:
Social marginal cost includes both private costs and external costs. It is used in the analysis of externalities and in determining the socially optimal level of output.
Explanation:
The paradox of thrift argues that if everyone tries to save more during a recession, aggregate demand falls, leading to lower income and ultimately lower total saving.
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