Payments to a factor of production in excess of the minimum payments necessary to call it into existence constitute
A) consumers' surplus
B) rent
C) a golden parachute
D) an efficiency wage

Question

Quizplus · Accepted Answer

Payments to a factor of production in excess of the minimum necessary to call it into existence constitute rent. Rent is the surplus earned by a factor of production due to its scarcity. The excess payment is not required to bring the factor of production into existence, but rather to induce the owner of the factor to use it in a particular industry or position.

Payments to a Factor of Production in Excess of the Minimum