The following are rewards for factors of production EXCEPT
Answer Details
Factors of production are the inputs used to produce goods and services in an economy. The main factors of production include land, labor, capital, and entrepreneurship. Each of these factors receives a specific reward or return:
Land: The reward for using land as a factor of production is rent. Rent is the payment made for the use of land or real estate resources.
Labor: The reward for labor is typically in the form of wages or salaries. It represents the compensation paid to workers for their productive efforts.
Capital: The reward for capital, which includes machinery, tools, or financial capital used in production, is interest. It is the return on investment for using capital resources.
Entrepreneurship: The reward for entrepreneurship, which involves the risk-taking and organization of other factors of production, is profit. Profit is the financial gain realized by entrepreneurs for their ventures.
The term subsidy is generally not a reward for factors of production. A subsidy is a financial assistance granted by the government to individuals or businesses to support activities, promote economic growth, or reduce the cost of certain goods and services. It is not directly linked to any of the classical factors of production.
In conclusion, while profit, rent, and interest are returns directly associated with factors of production, a subsidy is not. It serves a different purpose in economic policy.