2. Factor Payment are the income people receive
for supplying the factors of production: land,
labor, capital or entrepreneurship.
Payment made of scarce resources, or the
factors of production in return for productive
services.
3. A wage, interest , rent and profit payment for
services of scarce resources , or the factors of
production ( labor , capital , land and
entrepreneurship ) , in return for productive
services.
4. I. WAGE : Wages are paid for the services
of labor.
II. INTEREST : Interest is the payment for the
services of the capital.
III. RENT : Rent is the services for land
IV. PROFIT : Profit is the factor payment to
entrepreneurship.
5. The role that factor payments play in the
macro economy can be illustrated by the
circular flow model.
The circular flow captures the continuous
movements of production, consumption,
income and factor payments between
producers and consumers.
6.
7. Factor Price is the unit cost of using a factor
of production , such as labor or physical
capital.
The prices for factor of production depends
upon demand and supply of that particular
factor of production.
10. Factor Payment are the flow between the
business sector and the resource markets.
In particular , the business sector uses the
revenue it receives from the sale of gross
domestic product to pay for the services of the
factors of production .
