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Rent

In classical economics rent was the return to an "owner" of land. In later

economic theory this term is expanded as economic rent to include other forms of

unearned income typically realized from barriers to entry. Land ownership is considered to be

a barrier to entry because land owners make no contribution to the production process. They simply

prevent others from using that which would otherwise be useful.

"Rent is that portion of the produce of the earth, which is paid to the

landlord for the use of the original and indestructible powers of the

soil. It is often, however, confounded with the interest and profit of

capital, and, in popular language, the term is applied to whatever is

annually paid by a farmer to his landlord. -- Ricardo



Last Updated: 29.06.2008

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