Basic Economic Problem · 4 question types
Past paper frequency (2018 to 2024)
This topic accounts for approximately 6% of your exam marks.
Four factors and their rewards appear occasionally; usually 2 to 4 marks when tested, not on every paper.
This is the table examiners use as a question template. Memorise it in both directions: given a factor, name the reward; given a reward, name the factor.
| Factor | Reward |
|---|---|
| Land | Rent |
| Labour | Wages (or salaries) |
| Capital | Interest |
| Enterprise | Profit |
The four rewards are sometimes collectively called factor incomes. In a market economy, households own the factors and receive these incomes when firms hire the factors in factor markets.
A common 4-mark exam question: State the four factors of production and the reward earned by each. Full marks come from naming all four factors paired with the correct reward, in any order.