Name four factors of production and the remuneration for each factors (8)
The four factors of production are land, labor, capital, and entrepreneurship. The remuneration for each factor is as follows:
1. Land: The remuneration for land is rent. Landowners receive rent in the form of payments for the use of their land. This can be through leasing agreements or property rentals.
2. Labor: The remuneration for labor is wages. Workers receive wages as payment for their time and effort in producing goods or providing services. This can be through hourly, daily, monthly, or annual wages, depending on the type of work and employment contract.
3. Capital: The remuneration for capital is interest. Capital owners, such as financial institutions or individuals who lend money or invest in businesses, receive interest as compensation for allowing others to use their capital. This can be in the form of regular interest payments or as a percentage of profits.
4. Entrepreneurship: The remuneration for entrepreneurship is profit. Entrepreneurs receive profit as a reward for taking risks, bringing together the other factors of production, and organizing them into a productive enterprise. Profit is the residual income remaining after deducting all costs, including wages, rent, and interest.