Question : ________________ is the amount paid to factors of production for their contribution in the production process.
Option 1: Factor cost
Option 2: Market price
Option 3: Net factor income from abroad
Option 4: Net factor income to abroad
Answer (1)
18th Jan, 2024
Correct Answer: Factor cost
Solution :
The cost of the production factors is known as the factor cost. The total cost of the factors of production used to manufacture a specific good in an economy is referred to as the factor cost. It covers expenses such as those related to land, labour, capital, raw materials, transportation, etc.
Hence, Option A is correct.
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