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Difficulty: EasyFactors of Production and Their Rewards

A commercial driver receives a monthly remuneration from a logistics company for devoting human physical and mental effort to transport goods across cities. What economic term describes the reward for this factor of production?

  1. WagesAnswer
  2. B
    Interest
  3. C
    Rent
  4. D
    Profit

Answer

Wages
Labour comprises both the physical and mental human exertion involved in providing goods and services. The standard payment or reward accruing to labour is wages (or salaries).

Step-by-Step Solution

1
Identify the factor of production described in the scenario
The physical and mental exertion of the driver constitutes human effort, which is classified as labour.
Labour encompasses all human efforts directed towards economic production.
2
Identify the reward corresponding to this factor of production
The income earned by labour for its service in production is wages (or salaries).
Economic theory defines wages as the direct reward for labour services.

Key Concept

Reward for Labour
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Topics

Factors of Production and Their Rewards

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