Chapter 69, Problem 4MCQ

To determine

The factor of production which receives the largest portion of income in the Country U.

Answer to Problem 4MCQ

From the available options, the correct option is labor.

Explanation of Solution

Country U is a developed country and its economy receives the largest proportion of the income from labor because a large number of people in the country are involved in labor. The nation gets the advantage for its economy from the wages and salaries of the labor as it boosts the amount of tax. Land and capital are the sources of wealth for the country but these factors do not produce the largest income in the economy. Entrepreneurship and interests are the lowest generators of income for the country. Therefore, the correct option is b (labor).

Economics Concept Introduction

Introduction: The factor of production supports the production of goods and affects the economy of the country such as land, labor, capital, etc.