Factors of Production

Question 1

Which of the following is a factor of production?

Accepted Answer

Labour — Labour, the human effort used in production, is one of the four factors of production.

Question 2

The reward earned by the factor land is:

Accepted Answer

Rent — Land earns rent as its reward.

Question 3

Man-made aids to production such as machines are called:

Accepted Answer

Capital — Capital refers to man-made goods used to produce other goods, such as machinery.

Question 4

The factor that organises the others and takes risk is:

Accepted Answer

Enterprise — Enterprise, provided by the entrepreneur, organises factors and bears risk.

Question 5

The reward earned by labour is:

Accepted Answer

Wages — Labour earns wages in return for physical and mental effort.

Question 6

Which is an example of the factor land?

Accepted Answer

A coal deposit — A coal deposit is a natural resource, so it is classified as land.

Question 7

The reward for enterprise is:

Accepted Answer

Profit — Enterprise is rewarded by profit for taking business risk.

Question 8

Better education and training mainly improve the:

Accepted Answer

Quality of labour — Education and training raise workers' skills, improving the quality of labour.

Question 9

Which factor earns interest as its reward?

Accepted Answer

Capital — Capital earns interest as its reward.

Question 10

A country's productive capacity can be increased by:

Accepted Answer

Improving the quality of its factors — Higher-quality factors of production raise how much a country can produce.

Factor	Meaning	Reward
Land	All natural resources, such as soil, water and minerals	Rent
Labour	Human physical and mental effort	Wages
Capital	Man-made aids to production, such as machines and tools	Interest
Enterprise	The skill of organising factors and taking risks	Profit