Which factor of production receives rent?
Answer and explanation
Correct answer: Land
In the factor-reward framework, rent is the payment for the use of land and other natural resources. Therefore, land is the correct answer, option A. Labour receives wages, capital receives interest, and entrepreneurship receives profit. These distinctions are useful when understanding factor cost because factor cost includes rewards paid to productive factors, whereas taxes and subsidies are price adjustments rather than factor rewards.
Frequently asked questions
What is the correct answer to this question?
Land
Why is this the correct answer?
In the factor-reward framework, rent is the payment for the use of land and other natural resources. Therefore, land is the correct answer, option A. Labour receives wages, capital receives interest, and entrepreneurship receives profit. These distinctions are useful when understanding factor cost because factor cost includes rewards paid to productive factors, whereas taxes and subsidies are price adjustments rather than factor rewards.
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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