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Economics (AS & A Level) · Oct / Nov 2022 · Paper 33 · Question 16

9708Labour market forces and government intervention

A fashion model is paid $500 000 a year. If the next best paid job he could get is as a teacher at $100 000 a year, what are his transfer earnings and his economic rent?

  1. Atransfer earnings zero; economic rent 400 000
  2. Btransfer earnings 100 000; economic rent 400 000
  3. Ctransfer earnings 400 000; economic rent zero
  4. Dtransfer earnings 400 000; economic rent 100 000

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Correct answer: B. transfer earnings 100 000; economic rent 400 000

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