ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In economics, factor payments are the income people receive for supplying the factors of production: land, labor, capital or entrepreneurship.

Detailed explanation-2: -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.

Detailed explanation-3: -Factor income is income received from the factors of production: the resources used to produce goods or services. Factor income on the use of land is called rent, income generated from labor is called wages, and income generated from capital is called profit.

Detailed explanation-4: -Answer and Explanation: Profit is the payment for the factor of production entrepreneurship. Every factor of production such as land, labor, capital, and entrepreneurship receives an amount in return for supplying its services.

Detailed explanation-5: -Man (Labour) acts upon Nature (Land) to produce goods and services and wealth. These two factors (Land and Labour) are naturally given and without them no goods can be produced. These are called primary factors.