Question
How does the economist's use of the term "rent" differ from everyday usage? Explain: "Though rent need not be paid by society to make land available, rental payments are very useful in guiding land into the most productive uses."
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Explain why economic rent is a surplus payment when viewed by the economy as a whole but a cost of production from the standpoint of individual firms and industries. Explain: "Land rent performs no 'incentive function' for the overall economy."
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