In economic theory, economic rent is a payment to a factor of production or input in excess of that which is needed to keep it employed in its current use. The major components of economic rent include monopoly rent (income that accrues due to some degree of monopoly power) and land rent. Wikibooks has more about this subject: Economics Wikibooks Wikiversity has more about this subject: School of Economics U.S. Economic Calendar Economics at the Open Directory Project Economics textbooks on Wikibooks The Economists Economics A-Z Institutions and organizations Bureau of Labor Statistics - from the American Labor Department Center... Classical economics distinguishes between three factors of production which are used in the production of goods: Land or natural resources - naturally-occurring goods such as soil and minerals. ... In economics, land comprises all naturally occurring resources, such as geographical locations, mineral deposits, and even portions of the electromagnetic spectrum. ...

In classical economics, "rent" referred to a specific kind of income received by the owners of land and other gifts of nature (natural resources) and was thus often called "land rent." To Karl Marx and Henry George, this land-rent was seen as a form of exploitation. Land-owners were able to get "something for nothing" just because they controlled such important natural resources. (To Marx, the land-owners received a part of capitalist society's surplus-value that was redistributed from the industrial sector, where workers produced it.) Classical economics is a school of economic thought whose major developers include William Petty, Adam Smith, David Ricardo, Thomas Malthus, and John Stuart Mill, and Johann Heinrich von Thünen. ... Karl Marx Karl Heinrich Marx (May 5, 1818 Trier, Germany – March 14, 1883 London, UK) was an influential German philosopher, political economist, and revolutionary organizer of the International Workingmens Association, two of whose books in particular, Das Kapital and The Communist Manifesto (the latter with Friedrich Engels), laid the... Henry George Henry George (September 2, 1839 – October 29, 1897) was an American political economist, and the most influential proponent of the Single Tax on land. ... This article discusses the economic concept of exploitation. ... Surplus value is a concept created by Karl Marx in his critique of political economy, where its source is claimed to be unpaid surplus labour performed by the worker by the capitalist, serving as a basis for capital accumulation. ...

Modern neoclassical economics has generalized this theory to suggest that the owner of any kind of input can receive economic rent due to unique qualities of that input. Rent is thus a payment received for special advantages of any sort. For example, an excellent professional basketball player typically earns much more income than is necessary to compensate him or her for the training, effort, practice, and the like needed to become a player. The payment may not always be in terms of money. It may also come in terms of the privileges of fame. Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ...

Because receiving a rent involves an individual or corporation getting "something for nothing", economists see them as investing in rent seeking activities, i.e. spending to get special privileges from the government or from market positions. The phenomenon of rent-seeking was first identified in connection with monopolies by Gordon Tullock, in a paper in 1967. ...

Two types of factor rent

• Classical factor rent -- This is the return to a factor above and beyond the amount necessary to induce the supplier to offer the input to the market. This corresponds to the notion of a producers' surplus or "scarcity rent." This type of economic rent arises because of scarcity in the supply of inputs. If factor supply is perfectly elastic, there would be no producers' surplus and no economic rents.

• Paretian factor rent - This is the return to a factor above and beyond the amount that the factor supplier would receive in its next-best alternative use. This type of economic rent draws on the notion of opportunity costs. For example, if someone is earning $20,000 for a job, and the next best job pays $15,000, then the economic rent is the difference between the two of $5,000.

The term surplus is used in economics for several related quantities. ... Opportunity cost is a term used in economics, to mean the cost of something in terms of an opportunity foregone (and the benefits that could be received from that opportunity), or the most valuable foregone alternative. ...

See Also

• list of economics topics
• Quasi-rent
• Rent-seeking
• Hotelling rent