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Chapter 7: Q 16. (page 184)

What are the factor payments for land, labor, and capital?

Short Answer

Expert verified

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

Step by step solution

01

Step 1. Land, labor, and capital

Land, labor, and capital are some of the important factors of production in the production process of a good. The three factors of production earn factor payments in different forms.

02

Step 2. The factor payments for land, labor, and capital 

The factor payment to land is made in the form of rents per acre of land. The factor payment to labor is made in the form of wages and salaries to the laborers. Finally, the factor payment to capital is made in the form of interest paid on the capital.

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