In a firm, the entrepreneur hires wage labour and employs the services of capital and land before she undertakes production. In NCERT, these are together called:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Inputs
Wage labour, capital and land are what the entrepreneur hires before production. They are called inputs. What she then produces is the output.
Option (1) Output — Incorrect. Output is the goods and services produced with the inputs.
Option (2) Inputs — Correct. The factors hired for production are the inputs.
Option (3) Revenue — Incorrect. Revenue is the money earned by selling the output.
Option (4) Investment expenditure — Incorrect. Investment expenditure is spending on new machinery or factories that raises productive capacity.
NCERT (2026-27): “1.2 Context of the Present Book of Macroeconomics … The production units will be called firms in this book. In a firm the entrepreneur (or entrepreneurs) is at the helm of affairs. She hires wage labour from the market, she employs the services of capital and land as well. After hiring these inputs she undertakes the task of production. Her motive for producing goods and services (referred to as output) is to sell them in the market and earn profits. …” |