Multiple Choice
Refer to Figure 13-1. As the number of workers increases, which of the following is most likely to occur in the short run?
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0. Basic Principles of Economics
Factors of Production
Multiple Choice
Which of the following statements about factors of production is the most accurate?
A
Entrepreneurship is not considered a factor of production in economics.
B
Factors of production include land, labor, capital, and entrepreneurship.
C
Land and capital are interchangeable terms for the same factor of production.
D
Only physical capital and labor are considered factors of production.
Verified step by step guidance1
Step 1: Understand the concept of factors of production. In economics, factors of production are the inputs used to produce goods and services. These typically include land, labor, capital, and entrepreneurship.
Step 2: Analyze each statement given in the problem. The first statement claims entrepreneurship is not a factor of production, which contradicts the standard economic definition.
Step 3: Consider the second statement, which lists land, labor, capital, and entrepreneurship as factors of production. This aligns with the widely accepted classification in economics.
Step 4: Evaluate the third statement that land and capital are interchangeable. This is inaccurate because land refers to natural resources, while capital refers to man-made resources used in production.
Step 5: Review the fourth statement that only physical capital and labor are factors of production. This excludes land and entrepreneurship, which are also essential factors, making the statement incomplete.
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