FAQs
The remuneration to them are as follows:
- Land: Rent is a reward for the use of land.
- Labour: Wages are the reward for labour.
- Capital: Interest is the reward for capital.
- Entrepreneur: Profit is the reward for an entrepreneur.
Answer and Explanation:
Factors of production have various payments. For instance, the income for land resources is known as rent. Secondly, an entrepreneur earns profit, capital resource owner earns interest, and finally, labor payment is wages.
What are the 4 factors of production explain each factor briefly? ›
The factors of production are the inputs used to produce a good or service in order to produce income. Economists define four factors of production: land, labor, capital and entrepreneurship. These can be considered the building blocks of an economy.
What is the remuneration of an entrepreneur in production? ›
Profit is the remuneration of the entrepreneur, who is the driving force in a market economy. In all the activities undertaken by entrepreneurs, they face the risk of failure.
What are the remunerations to each of these called? ›
The remunerations paid to the factors of productions are called factor payments or factor incomes. These are the aggregation of rent, wage, interest and profit.
What are the 4 major factors of production and known examples for each type? ›
These are the four factors or production:
- Land as a factor of production. As a factor of production, land can take on various forms—from raw property to commercial real estate. ...
- Labor as a factor of production. ...
- Capital as a factor of production. ...
- Entrepreneurship as a factor of production.
Land, labor, and capital resources, and entrepreneur; the four basic resources that are combined to create useful goods and services. Natural resources or "gifts of nature" not created by human effort; one of four factors of production land, minerals, water, animals, vegetation, and marine life.
What are the four types of labour? ›
The four types of labor in economics are skilled, unskilled, semi-skilled, and professional. Together, these four types of labor make up the active labor force.
What are the four tools of economics? ›
Tools used in economic analysis include tables charts, graphs, algebraic expressions and equations.
What are the four major economic systems? ›
The 4 main types of economic systems are traditional economies, command economies, market economies, and mixed economies. Traditional economies are based on conventional forms of providing sustenance.
Salaries and wages is the remuneration for the use of labour. Rent is the remuneration for the use of natural resources. Interest is the remuneration for the use of capital. Profit is the remuneration for entrepreneurship.
What is the remuneration for the production factor capital? ›
Capital as a Factor of Production
They are all considered to be capital goods because they are used in a production process and contribute to the productivity of work. The income that comes from capital is referred to as interest.
What kind of resource is labor? ›
Labor refers to human resources (also called human capital)—physical or intellectual.
What is the remuneration of labour? ›
(a) Any cash payment or payment in kind that is provided in order to enable the employee to work (for example, equipment, tools or a similar allowance or the provision of transport or the payment of a transport allowance to enable the employee to travel to and from work only.)
What is the meaning of remuneration? ›
Remuneration is any type of compensation or payment that an individual or employee receives as payment for their services or the work that they do for an organization or company.
Who has to decide the reward for each factor of production? ›
Explanation: Entrepreneur is the only person who has the authority and power to control each factor of production. The management of land, labour and capital comes under Entrepreneur who gains profit by using these factor of production.
