Bundle: Microeconomics, Loose-leaf Version, 10th + Mindtap Economics, 1 Term (6 Months) Printed Access Card
10th Edition
ISBN: 9781305782570
Author: William Boyes; Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 18, Problem 1E
To determine
(a)
Economic rent and transfer earning
Expert Solution
Explanation of Solution
The given
Graph showing the Economic rent in the perfectly
The area ABCD represents the All Economic rent; there are no transfer earnings since the same amount would be supplied at a
Economics Concept Introduction
Introduction:
Economic rent is the amount paid to the factor of production which is excess of what is economically or socially necessary.
Transfer earning is the minimum amount which is to be paid so that labour do not move to other occupation.
To determine
(b)
Impact on economic rent and transfer earning when demand increases.
Economic rent and transfer earning
Expert Solution
Explanation of Solution
If the demand increased, there would be a shift in the demand curve to the right resulting the price increased from $ A to $ E.
The price in increase therefore results in the increase of economic rent.
Economics Concept Introduction
Introduction:
Economic rent is the amount paid to the factor of production which is excess of what is economically or socially necessary.
Transfer earning is the minimum amount which is to be paid so that labour do not move to other occupation.
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Responsd to Luis Rodriguez
1800 tons of pomegranates a year is a lot of sweetness!
So, you can get 71 Afghanis for $1? How cool. Does that mean you can buy a lot of stuff in Afghanistan for only $1? How do you know that your purchasing power in Afghanistan is stronger than in the United States?
Yes, with an exchange rate of 71 Afghan Afghani for 1 US dollar, you can buy many things in Afghanistan for just $1. However, purchasing power isn't solely determined by the exchange rate. It also depends on the cost of goods and services in each country. For example, if a meal in Afghanistan costs 200 Afghanis, you would need about $2.82 to buy that meal in US dollars (since 200 Afghanis divided by 71 Afghanis per dollar equals approximately $2.82). So, while the exchange rate allows you to get more Afghanis for your dollars, you also need to consider how much things cost in Afghanistan.
Now that the world seems to like Afghani stuff and is buying more of it, does that mean your…
Chapter 18 Solutions
Bundle: Microeconomics, Loose-leaf Version, 10th + Mindtap Economics, 1 Term (6 Months) Printed Access Card
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