Surplus productivity refers to the income remaining after paying labor, capital and coordination — which is attributed to:

Correct Answer

D) The land, as the residual claimant

Why this is correct: Surplus productivity is the residual income after paying all other production factors (labor, capital, coordination). In classical economic theory, land is the immovable factor that receives this leftover amount, making it the residual claimant. This underpins land residual valuation techniques. Why the other choices are wrong: The improvements' depreciation reserve is an accounting concept for wear, not a claimant of income. The developer's entrepreneurial fee is a payment for coordination, which is paid before the residual. The lender's mortgage interest is a return to capital, also paid before the residual. Exam tip: Remember the order: labor, capital, and coordination are paid first; land gets what's left.