CMA Foundation · Fundamentals of Business Economics and Management · Means of Production
In economics, the reward paid to the factor 'land' for its use in production is called:
The reward for land as a factor of production is rent. Labour earns wages, capital earns interest and the entrepreneur earns profit, so rent is the only option that matches land's payment for being used in production.
- AWages
- BRentCorrect
- CInterest
- DProfit
Explanation
Each factor of production earns a distinct reward: land earns rent, labour earns wages, capital earns interest and enterprise (organisation) earns profit. Wages are the reward of labour, not land.
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