Factor Rewards in Economics

Steps:

• Identify the four factors of production: land, labor, capital, and enterprise.
• Recall standard economic rewards: rent for land, wages for labor, interest for capital, profit for enterprise.
• Examine choices for accurate factor-reward pairings.
• Select the option that correctly matches land with its reward, rent.

Why D is correct:

• In economic theory, rent is defined as the payment made for the use of land as a factor of production.

Why the others are wrong:

• A: Capital earns interest, not surpluses, which refer to excess profits after costs.
• B: Enterprise earns profits, not dividends, which are shareholder distributions from company earnings.
• C: Labor earns wages, not interest, which is the reward for capital.

Final answer: D