ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -(1) Economic rent. It refers to payment made for the use of land. (2) Interest on capital invested for improvement of land.

Detailed explanation-2: -In Economics, there may be the following types of rent: Economic Rent – It is the payment made for the use of land or payment for the use of scarce natural resources. Scarcity Rent – Scarcity of rent is the main cause of emergence of Rent.

Detailed explanation-3: -Economic Rent and Labor A worker may be willing to work for $15 per hour, but because they belong to a union, they receive $18 per hour for the same job. The difference of $3 is the worker’s economic rent, which can also be referred to as unearned income.

Detailed explanation-4: -In modern economic usage, rent is represented as the difference between the total return to a factor of production (land, labour, or capital) and its supply price-that is, the minimum amount necessary to attain its services.

Detailed explanation-5: -Rent is a reward for land. Landlords can lease their land to producers throughout the economy. In the perspective of economics, land does not only include agricultural, plantation, or industrial areas. But, it also includes the natural resources contained in it, such as various metallic minerals, petroleum, and coal.