The Supply of Factor X Is Perfectly Inelastic and It

question 10

Multiple Choice

The supply of factor X is perfectly inelastic and it receives a price of $100. It follows that

• A)the entire $100 is pure economic rent.
• B)part of the $100 is pure economic rent.
• C)factor X does not receive any economic rent.
• D)any payment above the price of $100 is economic rent.

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Definitions:

Verbal Agreement

A contract or agreement made through spoken words, which can be legally binding, although harder to prove than written ones.

Void

Refers to something that is legally declared to be invalid or null.

Condition Subsequent

A condition that alters the rights or duties of the parties to a contract, or that may have the effect of terminating the contract if it should occur.

Condition Precedent

A legal term for a condition or event that must occur before a contract becomes effective or before an obligation must be performed.