[Solved] Which of the following is NOT an example of factor payments? (2024)

FAQs

[Solved] Which of the following is NOT an example of factor payments? ›

The correct answer is investment. For each type of production (or input) there are associated payments. Factor payment is the price paid by the firms for the use of the product.

The correct answer is a. transfer payments. Transfer payments are not considered a factor payment be...

They include land, labour, capital, and entrepreneurship. The income earned from the factors of production are called factors of payment, which come in the form of rent for land, wages for labour, interest for capital, and profit for entrepreneurship.

Short Answer. Land, labor, and capital receive factor payments in the form of rent, wages, and interest respectively.

The payments against which no good or service is provided in return are non-factor or transfer payments. National income includes only the factor incomes in the form of compensation of employees, rent, interest and profits. The income is generated through the joint effort of the four factors of production.

There are generally four factors of production labour, capital, land and entrepreneurship. Labour gets wages and salaries, capital gets interest, land gets rent and entrepreneurship gets profit as their remuneration.

In simple terms, non-factor services are the service that are not generated by land, labor, capital and entrepreneurship. Examples of some non-factor services are tourism, insurance etc.

Factor Payment is a wage, interest, rent, and profit payment for the services of scarce resources, or the factors of production (labor, capital, land, and entrepreneurship), in return for productive services. Factor payments are frequently categorized according to the services of the productive resource.

Factor payments. The income people receive for supplying factors of production, such as land, labor, or capital.

factor, in mathematics, a number or algebraic expression that divides another number or expression evenly—i.e., with no remainder. For example, 3 and 6 are factors of 12 because 12 ÷ 3 = 4 exactly and 12 ÷ 6 = 2 exactly. The other factors of 12 are 1, 2, 4, and 12.

What is at least one example of a factor payment? ›

The main factor incomes are as follows: Wages: This refers to the income earned by labor in exchange for their work. Wages are the payment made to workers for their physical or mental effort in the production of goods and services. Rent: Rent is the income earned by owners of land or other natural resources.

Answer - Wages, interest, rent, and profits Factor payments are those payments that are paid to the various factors…

Non- factor income

Examples include gifts, donation charities, taxes, fines etc. No production activity is involved in getting these incomes. These incomes are also called transfer incomes because such income merely represents the transfer of money without any good or service being provided in return for the receipts.

Wages are paid for the services of labor; interest is the payment for the services of capital, rent is the services for land, and profit is the factor payment to entrepreneurship.