Which of the following is a correct match of factor of production with its reward?

land- rent, labour - wages, capital - interest, organization - profit

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land- interest, labour - wages, capital - rent, organization - profit

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land- profit, labour - wages, capital - interest, organization - rent

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land- rent, labour - interest, capital - salary, organization - wages

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Solution

The correct option is A land- rent, labour - wages, capital - interest, organization - profit
All factors of production get rewards, otherwise they are not factors of production. Option 1 is a correct match. Others are incorrect. For instance, members of family involved in household activities do not get reward, and hence are not considered labour. If workers receives wages, they form labour.

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