Question

You are a taxi driver in Melbourne who earns $50 for a day’s work. You have been offered a one-day ticket to the Australian Open for $40. As a tennis fan, you value the experience at $100. With this information, what can we say?

A

The opportunity cost of the day at the Open is $40.

B

The net benefit of the day at the Open is $40.

C

The economic rent of the day at the Open is $10.

D

You would have paid up to $100 for the ticket.

Answer 1

Solution -

Option C.The economic rent of the day at the Open is $10. is Correct Answer.

Reason -

We know that

The economic rent = benefit - economic cost

Here,

the economic rent =

=$100 - A$40 - A$50

= $10.

NOTE - DO UP VOTE HAVE A NICE DAY THANK YOU