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Unit 8 Theory of Factor Pricing

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               Unit 8      Theory of Factor Pricing Rent:  Rent is the payment made by a tenant to a landlord for the use of land. In economics, rent is the reward or price paid for the use of land or any factor of production whose supply is inelastic. Contract Rent  Contract rent is the total payment made by a tenant to a landlord for the use of land or other durable goods, such as a house, vehicle, or computer. It is also called gross rent because it includes several payments besides economic rent.   Contract Rent = Economic Rent + Interest + Profit + Depreciation Charges + Other Charges Economic rent  Economic rent is the part of a factor’s earnings that is more than its transfer earnings (opportunity cost). It is the payment made only for the use of land or a factor of production in excess of what it could earn in its next best alternative use. Formula Economic Rent = Actual Earnings − Transfer Earnings (Op...
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Chapter 1 (Nature Of Organization)

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              Chapter 1      Nature Of Organization    Concept of Organization An organization is a group of people who work together to achieve common goals. It is also a social group intentionally created to achieve the goals of the organization. People form organizations because some goals are too big to achieve alone. Working together allows sharing of skills, resources, and efforts.   Key Points to Remember: Organization = group of people + common goals Intentional creation = planned structure for achieving objectives Teamwork = more efficient goal achievement Organizational Goal Organizational goals are the objectives that every organization sets to ensure its continuous survival and success. These goals are made to achieve the organization’s purpose both in the present and in the future. Simply put, organizational goals are the desired future conditions that an organization wants to reach. They can be lon...
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