NECO 2002 Economics · Question 20
The following are reward for factors of production EXCEPT
Options
- A.interests
- B.profit
- C.Rent and commissions
- D.rates and deposits
- E.wage and salaries
Answer: D. rates and deposits
Explanation written with AI and checked against the answer key
Step 1: Analyze the question We are asked to find the option that is NOT a reward for a factor of production.
Step 2: Recall the concept The four factors of production and their rewards are:
- Land → Rent
- Labour → Wages and salaries (commission can also be a labour reward)
- Capital → Interest
- Entrepreneur → Profit
Step 3: Check each option
- A. Interests: the reward for capital. ✔ A valid reward.
- B. Profit: the reward for the entrepreneur. ✔ A valid reward.
- C. Rent and commissions: rent is the reward for land, and commission is a form of payment to labour. ✔ Both are valid rewards.
- D. Rates and deposits: rates are local government taxes or charges on property, and deposits are money placed in a bank or paid as security. Neither is a payment to a factor of production. ✘
- E. Wage and salaries: the reward for labour. ✔ A valid reward.
Step 4: Answer Only option D contains items that are not rewards for any factor of production.
Exam tip: Remember the pairing LL-CE → R-W-I-P: Land = Rent, Labour = Wages, Capital = Interest, Entrepreneur = Profit. Any option with items outside these (like rates or deposits) is probably the "EXCEPT" answer.
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