Economic Reward for Entrepreneurship

Steps:

• Identify the question: seeking the economic term for compensation tied to risk and production organization.
• Recall factor payments: land (rent), labor (wages), capital (interest), entrepreneurship (profit).
• Match description: organizing production involves entrepreneurship, which bears uncertainty and risk.
• Confirm: profit fits as the residual return after other factors are paid.

Why D is correct:

• In economics, profit is defined as the reward for entrepreneurship, compensating for risks like market uncertainty and the effort to organize resources (per classical theory).

Why the others are wrong:

• A: Enterprise refers to the activity of risk-taking and organizing, not the reward itself.
• B: Interest is the return for providing capital, not for organizational risk.
• C: Wages compensate labor for work effort, unrelated to production risks.

Final answer: D