MCQ Questions:

1. Which statement about the factors of production is correct?
A) A river from which a company draws water is called land
B) Raising finance for a company is called capital
C) Supervisors employed in a company are called enterprise
D) The owner of a company is called labor

2. The tertiary sector of the economy is increasing in importance. This statement is most likely to mean that a high proportion of the labor force is:
A) Employed in agriculture
B) Employed in manufacture
C) Employed in the production of services
D) Unemployed but looking for work

3. A farmer pays a landowner for the use of a field. What is the income to the landowner called?
A) Interest
B) Profit
C) Rent
D) Wages

4. What is a factor of production?
A) An advantage of producing on a large scale
B) A resource used to produce goods and services
C) A sub-section of a manufacturing process
D) A unit of output

5. A university rejects 2000 qualified applicants who wish to study there. What factor of production could have caused the university to make this decision?
A) Infinite quantity of capital
B) Scarcity of labor
C) Surplus of land unlimited
D) Supply of enterprise

6. Which statement about the factors of production is correct?
A) Capital includes factories and machinery but not roads and ports
B) Enterprise is more often found in the public sector rather than the private sector
C) Labor is the factor that takes risks and can become unemployed
D) Land is the natural factor that can be improved by human action

7. Reena makes a living by selling paintings of the town in which she lives. She sells them in an open-air market once a week. In order to be able to sell more pictures in a week, she decides to buy a 'studio, pay someone to help in the studio, and try to increase demand by advertising in the local paper. Which factors of production were changed?
A) Capital and enterprise
B) Enterprise and labor
C) Labor and capital
D) Labor only

8. What is a factor of production?
A) A semi-skilled, young worker
B) Direct taxes received by a government
C) Shares in a manufacturing company
D) Stocks of money held by a bank

9. Which statement about the factors of production is correct?
A) Capital includes man-made machines that do not keep their original value
B) Enterprise is a natural factor of production that cannot be taught
C) Labor is an immobile factor that does not change its skill level
D) Land is only agricultural fields that cannot be improved by human effort

10. New oil reserves are discovered. What has increased in supply?
A) Capital
B) Enterprise
C) Labor
D) Land

11. Which is not a factor of production?
A) A farm
B) A farmer
C) A farmer's bank account
D) A second-hand tractor

12. Economists refer to factors of production. Which is not a factor of production?
A) The fields of a farm
B) The machinery in a factory
C) The shares of a company
D) The staff in an office

13. What would be classified as the factor of production capital for an airline?
A) The aircraft operated by the airline
B) The money the airline keeps in the bank
C) The pilots the airline uses
D) The shares of the airline quoted on the stock market

14. Which factor of production is not represented in the list shown?
A) Bananas
B) A factory
C) Goat
D) A risk-taking visitors

15. A government wishes to increase agricultural output. It gives farmers the tools to irrigate the farmers' fields. Which factors of production are provided by the farmer?
A) Capital and enterprise
B) Enterprise and labor
C) Labor and land
D) Land and capital

16. Which statement about factors of production is correct?
A) Capital is the amount of money borrowed from a bank
B) Labor is output made by an employee
C) Land includes commercially
D) Profit is the reward for enterprise

17. What can cause the supply curve for a product to shift to the right?
A) An increase in demand for the product
B) An increase in government subsidies to producers
C) An increase in indirect taxes on the product
D) An increase in the costs of production

18. In 2016, 20 billion barrels of oil and 1.6 billion barrels of natural gas were discovered in Texas, US. Which factor of production has increased in the US due to this discovery?
A) Capital
B) Enterprise
C) Labor
D) Land


A - A river from which a company draws water is called land.
C - Employed in the production of services.
C - Rent.
B - A resource used to produce goods and services.
B - Scarcity of labor.
D - Land is the natural factor that can be improved by human action.
C - Labor and capital.
A - A semi-skilled, young worker.
A - Capital includes man-made machines that do not keep their original value.
D - Land.
C - A farmer's bank account.
C - The shares of a company.
A - The aircraft operated by the airline.
D - A risk-taking visitors.
C - Labor and land.
D - Profit is the reward for enterprise.
B - An increase in government subsidies to producers.
D - Land.