The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor

-If a resource can be put to a single use and has no alternative uses then:
A)economic rents are zero.
B)transfer earnings are maximized.
C)total earnings are zero.
D)all earnings are economic rents.
E)all earnings are transfer earnings.

Question

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor
 
-If a resource can be put to a single use and has no alternative uses then:
A)economic rents are zero. 
B)transfer earnings are maximized. 
C)total earnings are zero. 
D)all earnings are economic rents. 
E)all earnings are transfer earnings.

Quizplus · Accepted Answer

When a resource can be put to a single use and has no alternative uses, all earnings from that use are considered economic rents because the resource cannot earn income in any other way. Economic rent is the payment to a factor of production in excess of the minimum required to keep it in its current use, but if there's no alternative use, then essentially all earnings are economic rents.

The Figure Given Below Represents Equilibrium in the Labor Market