Question

Assertion (A): Land, capital and labour are known as ‘factors of production’.

Reason (R): They are not essential to produce finished products.

Choose the correct option.

• A. Both A and R are true and R is the correct explanation of A.
• B. Both A and R are true but R is not the correct explanation of A.
• C. A is true and R is false.
• D. A is false and R is true.

Answer 1

The correct option is C A is true and R is false.

A factor market is a place where the labour, capital, and land are bought and sold. Labour, capital, and land are also known as ‘factors of production’ because they are essential to produce finished goods.