How does production generate income?
What will be an ideal response?
As businesses undertake production of goods, they must hire laborers, employ capital, and rent land, buildings, or machinery. Therefore they must pay wages, interest, and rent, which is income to the recipients. They also make a profit, which is income to the entrepreneur or business.
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The degree of a factor's specificity is inversely related to
A) the mobility of the factor, with more mobile factors having less specificity. B) the amount of time required to redeploy the factor to a different industry. C) the cost of the factor as a proportion of the long-run total cost of production. D) technology differences between two countries, with a less advanced technology resulting in less factor specificity. E) factor quality, with lower quality factors having a lower level of specificity.
In the current year, a nation's government spending equals $15 trillion and its revenues are $20 trillion. Which of the following is TRUE?
A) The nation's national debt equals $5 trillion. B) This nation has a current year budget surplus of $5 trillion. C) This nation is currently running a budget deficit of $5 trillion. D) The nation has a current year trade surplus of $5 trillion.
During wars the public tends to hold relatively more currency and relatively fewer deposits. This decision makes reserves
a. and the money supply increase. b. and the money supply decrease. c. increase, but leaves the money supply unchanged. d. decrease, but leaves the money supply unchanged.
Which of the following is NOT a common characteristic of oligopoly?
A) strategic dependence among firms in the industry B) product differentiation C) barriers to entry D) marginal cost pricing.