Wages are paid to which factor of production?
Answer and explanation
Correct answer: Labour
In the theory of factor rewards, wages are the payment made to labour for its physical and mental effort in the production process. Therefore, option B is correct. The other factor-reward pairs are also important: land receives rent, capital receives interest, and entrepreneurship receives profit. Thus, wages cannot be matched with capital, land, or entrepreneurship.
Frequently asked questions
What is the correct answer to this question?
Labour
Why is this the correct answer?
In the theory of factor rewards, wages are the payment made to labour for its physical and mental effort in the production process. Therefore, option B is correct. The other factor-reward pairs are also important: land receives rent, capital receives interest, and entrepreneurship receives profit. Thus, wages cannot be matched with capital, land, or entrepreneurship.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - Market price and factor cost.
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