Log out Go to App
Go to App

Learning Materials

Features

Discover

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.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5units that it sells for a price of $25each.

a. What will be the company’s profits or losses?

b. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost?

c. At the given quantity and price, is the marginal unit produced adding to profits?

A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method choices are:

Method 1: 50 units of labor, 10 units of capital ; Method 2: 20 units of labor, 40 units of capital ; Method 3: 10 units of labor, 70 units of capital

If hiring labor for the winter costs \(100/unit and a unit of capital costs \)400, what is the best production method? What method should the company use if the cost of labor rises to $200/unit?

What is a production technology?

What shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average

variable costs?

How do we calculate marginal product?
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free