GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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income
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tax
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profit
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all the above
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Detailed explanation-1: -Profit is a residual income. It is the residue left from the sale of goods after the deduction of all wages, interest, and rent.
Detailed explanation-2: -The factors of production are rewarded for their contribution to the production of goods and services. The reward for land is rent, for labor it is wages, for capital it is interest and the reward for entrepreneurship is called profit.
Detailed explanation-3: -Income = Wages + Rent + Interest + Profit.
Detailed explanation-4: -In modern economic usage, rent is represented as the difference between the total return to a factor of production (land, labour, or capital) and its supply price-that is, the minimum amount necessary to attain its services.
Detailed explanation-5: -Ans. The theory of distribution seeks to provide for the distribution of share of the various factors of production in the national income. Ans: The reward for each factor of production are as follows:-Land – rent is the reward for the services of land. Labour – wage is the reward for the services of labour.