Question

Which of the following does not come under the four-fold classification of factors of production in Economics?

• A. Land
• B. Labour
• C. Capital
• D. Goods

Hint:

Remember the distinction: Factors of production are the \textit{inputs} (resources) used to create products, while goods (and services) are the \textit{outputs} of that process.

Answer 1

The Correct Option is D

Step 1: Understand the four-fold classification of factors of production.
In Economics, the factors of production are the resources used to produce goods and services. Traditionally, these are categorized into four main types.

Step 2: List and define the four factors of production.
The four generally accepted factors of production are:
Land: This includes all natural resources used in production, such as raw materials, land for farming, mineral deposits, forests, etc. The reward for land is rent.
Labour: This refers to the human effort (physical and mental) used in production. The reward for labour is wages.
Capital: This refers to man-made resources used in production, such as machinery, tools, buildings, factories, infrastructure, etc. The reward for capital is interest.
Entrepreneurship (or Enterprise): This refers to the ability to organize the other factors of production, take risks, and innovate to create goods and services. The reward for entrepreneurship is profit.

Step 3: Compare the options with the factors of production.
Land: Is a factor of production.
Labour: Is a factor of production.
Capital: Is a factor of production.
Goods: Goods are the \textit{output} of the production process, not a factor (input) used in production.

Step 4: Conclude the correct option.
Therefore, 'Goods' do not come under the four-fold classification of factors of production.