Chapter 13R, Problem 3MCQ

To determine

The correct option that is close to the percentage of factor income for labors.

Answer to Problem 3MCQ

Option d is correct.

Explanation of Solution

Explanation for correct option:

d.

Factor income received from labor is referred as wages which mean labor earn income in the form of wages. Factor income for labor varies for every country.

  

Labor is one of the four factors of production where its factor income is 67.8% i.e. around 70% in USA. It means that Therefore, option d is correct.

Explanation for incorrect options:

a.

Factor income of labor is slightly less than 70% but not equal to 10% as it is very less. Therefore, option a is incorrect

b.

Factor income of labor is slightly less than 70% but not equal to 30% as it is very less. Therefore, option b is incorrect.

c.

Factor income of labor is slightly less than 70% but not equal to 50% as it is very less. Therefore, option c is also incorrect.

e.

Factor income for all factors of production is shown in the pie chart in option d. Therefore, option e is incorrect.

Economics Concept Introduction

Factor of production: Factor of production refers to the components or the resources that are required for producing intangible or tangible products.

Factor income: Factor income refers to returns received by the producer for inserting each factor of production as an input.