Households receive factor payments for rendering their services as employees of the firm. Which of the following factor payment is received by these employees?
Answer & explanation
Correct answer: option 4
There are 4 factors of production i.e. land, labour, capital and entrepreneur. Payments received against them are called as factor incomes. We receive rent against lending our land for production of goods, receive interest against capital, profits against entrepreneurship and compensation to employees are given in return to the services they have rendered for the organisation.