Question

in modern economy rewards to factors of production are paid
a) in good
b) in service
c)in money
d) none of these
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Answer 1

Answer:

The correct answer is option (d)None of these.

Explanation:

Factors of production-

In economic systems, production factors are assumed to be owned by families, who lend or lease them to entrepreneurs and organisations.

The four production factors are as follows:

• Land- Land is a free gift from nature that is referred to as a natural, original, or primary factor of production. Rent is a monetary reward for the use of land
• Labour- A person or group of people engaged in physical labour constitute the labour force, which is a factor of production. Wages are the compensation for labour.
• Capital-Capital refers to wealth, money, or income that is invested in a business to increase output. The reward for capital is interest.
• Entrepreneur-An entrepreneur's job is to bring the necessary factors together and make them work in harmony. Profit is the ultimate reward for an entrepreneur.

Hence, we can conclude that the rewards for factors of production are in form of Rent, Wages, Interest and Profit only.

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