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Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884 Exercise 1
Which of the following pairs does not match?
a. Labor and wages
b. Land and rent
c. Entrepreneurship and profit
d. Capital and profit
a. Labor and wages
b. Land and rent
c. Entrepreneurship and profit
d. Capital and profit
Explanation
Verified
Verified
a. Labour and wages are related since labor is a factor of production that receives factor rewards as wages.
b. Land is a factor of production, and rent is the factor reward for the same.
c. Entrepreneurship is a factor of production, and profit is the factor reward for it.
d. Capital is a factor of production and interest is factor reward for it, and not profit. So, this pair did not match.
The four factors of production are, land, labor, capital, and entrepreneurship. The corresponding factors rewards to these factors of production are rent, wages, interest, and profits. It is the fourth option, where capital has been related to profit, which is wrong.
b. Land is a factor of production, and rent is the factor reward for the same.
c. Entrepreneurship is a factor of production, and profit is the factor reward for it.
d. Capital is a factor of production and interest is factor reward for it, and not profit. So, this pair did not match.
The four factors of production are, land, labor, capital, and entrepreneurship. The corresponding factors rewards to these factors of production are rent, wages, interest, and profits. It is the fourth option, where capital has been related to profit, which is wrong.
Macroeconomics 11th Edition by Michael Parkin
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