It must be created by humans and not seen by the average person.
Each of these qualities is hard to define, and views differ about what is patentable.
Amazon's 1-Click patent application was rejected in Europe.
Antipiracy laws are an example of property rights protection.
Individuals are trying to get around existing laws that were designed with a different technology in mind.
The new technology would be spread to the general public.
Government often stops that from happening.
A tax on a perfectly inelastic supply will only fall on the supplier.
The distribution of income depends on how government interprets and enforces the laws.
It's helpful to consider the three traditional income categories besides wages, because doing so provides useful insight into forces that make our economy work and that determine who gets what.
Rent is the income from a factor of land, which was assumed to be a fixed factor of production.
When the supply of a factor is fixed, all we need to know is the amount of land and the demand curve.
Rent on land is determined by the level of demand if the land is inelastic.
Let's ask a couple of questions to see if you understand the concept of rent.
A tax is placed on the user of the land.
The owner of the land would get only $70 per year.
Suppliers will supply the same amount of land regardless of the price they receive, so they have to pay the entire tax.
If 17W-4 Microeconomics didn't exist, the price of land would have to go up and demanders wouldn't pay more.
The preceding conclusion was obvious if you followed the analysis, but now let's extend it to the real world.
The government might increase the property tax.
The analysis tells us they shouldn't, but in reality they worry a lot.
The assumptions don't fit reality.
New land can be created by landfills and useless land can be converted into useful land with a variety of methods.
Since rental apartments have other uses, the supply of apartments is even more elastic.
The renters are correct.
The model is correct because most economists see the supply of apartments as inelastic.
If the demand for apartments is less elastic than the demand for apartments, more of the property tax will fall on the apartment owner and most of the increase in the property tax won't be passed on to the consumer.
It can look like the tax is being passed on since the actual rent can be different from the supply/ demand-determined rent.
Even though they would have increased rent even if taxes had not gone up, property owners still blame it on increased costs.
It's much easier to blame the government than it is to say that apartments are in tight supply.
A number of taxation proposals have arisen because of the inelastic supply of land and the knowledge that most of the tax will be paid by the owner.
His ideas were influential in the late 19th century and still are today.
In the 1900s, the concept of rent was extended to include any payment above the opportunity cost, which is the amount it would receive in its next-best use.
The supply curve is upward sloping.
Quasi rent is the amount of money paid to a supplier.
I exploited a market niche because the most likely place to find a temporary market niche was me.
It could be the invisible hand at your job.
You're at work.
I had a lift because I wanted to do it right.
You checked out other construction firms and wrote a book.
To understand the economy, it's services.
You will have a market niche for a while.
I followed that strategy with this book.
Most people have other motives as well.
Curry is a basketball player.
He earns a multimillion-dollar salary because of the high demand for his ser vices as a basketball player.
The wage he could get at the next-best job is likely to be much higher than his salary.
The quasi rent component of his salary is different from the other one.
Rent can be included in wage income, as can profits and interest.
If individuals could somehow restrict supply, the rent they received would be higher.
It is to increase its price.
The underlying property rights need to be protected to change the institutional structure.
Rent seeking is related to our earlier discussion of property rights.
The underlying property rights are related to structure.
Rent seeking is an attempt to create either ownership rights or institutional structures that favor you.
Rent seeking doesn't lead to societal interest because of self-interest.
Property rights can be taken away from another person.
Some demander is receiving rent if the demand curve is downward-sloping.
The demand-side equivalent of rent is consumer surplus.
It is a legitimate activity for people to try to structure their property rights to benefit themselves.
There's no rent seeking when it has positive social consequences.
Rent seeking isn't bad, but there's no easy way to separate the good from the bad.
Rent seeking causes waste.
A firm has created a new life-form that eats nuclear waste and forms it into humus.
The firm will spend a lot of money to make sure that it will own that life-form, otherwise it won't make any income from it.
It will engage in rent seeking.
The rent seeking has a positive side.
Unless a firm can own the life-form, it is unlikely to spend money on it.
If property rights exist in such life-forms, society may be put off.
A profit is a part of nonwage income.
Normal profits are the amount that is divided into economic and normal profits.
They are an amount that can be used for entrepreneurship.
If an entrepreneur supplied entrepreneurship to the market, he or she could get economic profits.
It's the marginal above and beyond normal profits.
Others get a quasi rent.
Normal profits include returns on risk taking.
Sometimes normal profits are high, sometimes they are not, and sometimes they are negative.
It is expected, not actual, profits that guide entrepreneurs.
It may be worthwhile to enter that market because of economic profits.
The invisible hand is driven by economic profits.
Incentives for entrepreneurs to enter into new markets are eliminated by the expectation of economic profit.
Entrepreneurs drive the price down to an equilibrium price and eliminate economic profits.
The competitive forces that will eliminate the profits are unleashed by the expectations of profits.
This discussion of profit is related to our earlier analysis.
Competition drives the price in a market down to equal average total costs, which is one of the lessons you have learned from the theoretical analysis of supply and demand.
In the long run, perfectly competitive suppli ers make normal returns on their investments.
It's not something that just exists.
Competition brings about this by other suppliers entering the market.
Entrepreneurs don't want highly competitive mar kets.
There aren't a lot of profits to be made in such markets.
Markets in disequilibrium with price greater than average cost are what they look for.
You can make a lot of money.
Figure 17W-3(b) should be considered.
The market is in disequilibrium.
It means that the supplier makes an economic profit.
Competition isn't working or is working slowly.
Entrepreneurs look for market niches.
It's the best type of market niche to have because you're the sole supplier and there's no competition.
Pure monopolies are rare, but temporary disequilibrium is not.
The competitive conditions that push economic profit all the way down to zero aren't very common.
If no one knows you're making a profit, competitors won't compete.
Ms. A is telling everyone that Bright entrepreneurs don't advertise the fact that they have found a profitable market niche.
After anentrepreneur makes an innovation, he is enjoying his business.
His income can look a lot like rent.
There is a major difference with historical perspective.
The expectation of future profit was one of the driving forces behind the entrepreneur.
She did her entrepreneurial thing because of that.
If you take what she got for doing it away from her, it won't change the past.
It will change the future.
Other entrepreneurs will say that their profits will be taken away from them and they won't do entrepreneurial things.
entrepreneurial activity drives the economy to equilibrium and leads to many innovations.
Society may be worse off if preneurial incentives are removed.
Interest is the third traditional component of nonwage income.
Individuals who produce now but don't lend out the proceeds of their production allow others to invest or consume now.
Factor Markets return they get a promise to pay back the loan together with whatever interest they negotiated.
Businesses and entrepreneurs pay interest on loans to those who make loans to them, which is different from profits and rents.
High interest rates discourage entrepreneurial action.
A high-pressure salesperson is wining its current worth.