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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.

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Most popular questions from this chapter

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 shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?

What are explicit and implicit costs?

What is a production function?

Are fixed costs also sunk costs? Explain.
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