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capital earns interest, and enterprise earns profit."},{"text":"Rent, wages, dividends and revenue.","correct":false,"explanation":"Dividends reward shareholders and revenue is a firm’s sales income, rather than factor rewards. The four factor rewards are rent, wages, interest and profit."},{"text":"Rates, salaries, interest and profit.","correct":false,"explanation":"Rates are taxes rather than a reward for a factor of production. The standard four rewards are rent for land, wages for labour, interest for capital and profit for enterprise."},{"text":"Rent, wages, profit and interest.","correct":false,"explanation":"This reverses the final two factor rewards: capital earns interest, while enterprise earns profit. In factor order, the rewards are rent, wages, interest and profit."}]},{"id":"67ce6e97-e00d-4f83-9e5e-f75ad0964272","cardType":"basic","points":1,"front":"What reward does land earn?","back":"Rent.","mcqOptions":[{"text":"Rent.","correct":true,"explanation":"Land includes natural resources used in production, and rent is the payment received by owners for allowing those resources to be used."},{"text":"Wages.","correct":false,"explanation":"Wages pay for labour’s physical or mental effort, not for land. Land and other natural resources earn rent when they are used in production."},{"text":"Interest.","correct":false,"explanation":"Interest is the reward for capital, such as funds invested in machinery. The reward earned by land and natural resources is rent."},{"text":"Profit.","correct":false,"explanation":"Profit rewards enterprise for organising production and bearing risk, rather than rewarding land. The owner of land receives rent for its use."}]},{"id":"c1b30ee3-4af7-425f-8093-7d50aeaf0b15","cardType":"basic","points":1,"front":"What reward does labour earn?","back":"Wages, including salaries.","mcqOptions":[{"text":"Wages, including salaries.","correct":true,"explanation":"Labour contributes human physical and mental effort to production, so its reward is wages; this category also includes regular salaries paid to workers."},{"text":"Rent, including lease payments.","correct":false,"explanation":"Rent and lease payments reward owners of land or natural resources, not workers. Labour earns wages, including salaries, for supplying physical and mental effort."},{"text":"Interest, including loan payments.","correct":false,"explanation":"Interest is the return to capital and must not be confused with payment for work. Labour’s factor reward is wages, including salaries."},{"text":"Profit, including dividends.","correct":false,"explanation":"Profit is the reward for enterprise, while dividends distribute company earnings to shareholders. Labour instead earns wages, including salaries, for contributing human effort."}]},{"id":"eb976c28-ac13-4597-95ef-a00b892ec38d","cardType":"basic","points":1,"front":"What reward does capital earn?","back":"Interest.","mcqOptions":[{"text":"Interest.","correct":true,"explanation":"Capital consists of produced assets and funds used in production, and interest is the return received for committing those resources over time."},{"text":"Rent.","correct":false,"explanation":"Rent is the reward for land and natural resources, not capital. Capital tied up in productive assets such as machinery earns interest."},{"text":"Wages.","correct":false,"explanation":"Wages reward workers for supplying labour, rather than owners for supplying capital. The factor reward earned by capital is interest."},{"text":"Profit.","correct":false,"explanation":"Profit rewards enterprise for organising resources and accepting business risk. Capital instead earns interest because funds are committed to productive assets."}]},{"id":"eab0578f-fd0b-4daa-a1ea-f49ed1867bfd","cardType":"basic","points":1,"front":"What reward does enterprise earn?","back":"Profit.","mcqOptions":[{"text":"Profit.","correct":true,"explanation":"Enterprise organises the other factors of production and bears the risk of business activity, so its factor reward is profit."},{"text":"Rent.","correct":false,"explanation":"Rent rewards the owners of land and natural resources, not entrepreneurs. Enterprise earns profit for coordinating production and bearing business risk."},{"text":"Wages.","correct":false,"explanation":"Wages are paid for labour’s physical and mental effort. Enterprise instead earns profit for organising factors of production and accepting uncertainty."},{"text":"Interest.","correct":false,"explanation":"Interest is the return earned by capital when funds are committed to production. Enterprise earns profit for coordination, decision-making and risk-bearing."}]},{"id":"ea5fd6b4-b960-4a7f-ba13-ed810b613dbb","cardType":"basic","points":1,"front":"Why does land earn rent?","back":"Rent is payment for using natural resources.","mcqOptions":[{"text":"Rent is payment for using natural resources.","correct":true,"explanation":"In economics, land covers all natural resources used in production. Rent compensates their owners for allowing producers to use those resources."},{"text":"Rent is payment for providing human effort.","correct":false,"explanation":"Human physical and mental effort is labour, which earns wages rather than rent. Rent is paid for using land and other natural resources."},{"text":"Rent is payment for supplying manufactured equipment.","correct":false,"explanation":"Manufactured equipment is capital, whose reward is interest. Rent is earned by land because it pays for the use of natural resources."},{"text":"Rent is payment for bearing business risks.","correct":false,"explanation":"Bearing business risk is the role of enterprise, which earns profit. Rent instead compensates owners for the use of land and natural resources."}]},{"id":"ee31f0ca-05bf-4422-9722-4b5a0c2f68c1","cardType":"basic","points":1,"front":"Why does labour earn wages?","back":"Wages are payment for human physical and mental effort.","mcqOptions":[{"text":"Wages are payment for human physical and mental effort.","correct":true,"explanation":"Labour means the human physical and mental effort used in production. Wages, including salaries, compensate workers for supplying that effort."},{"text":"Wages are payment for using land and natural resources.","correct":false,"explanation":"Using land and natural resources generates rent for their owners, not wages. Wages compensate labour for supplying human physical and mental effort."},{"text":"Wages are payment for investing in machinery and equipment.","correct":false,"explanation":"Funds invested in machinery and equipment are capital and earn interest. Wages instead pay people for the physical and mental effort they provide."},{"text":"Wages are payment for organising production and bearing risk.","correct":false,"explanation":"Organising production and bearing risk are functions of enterprise, which earns profit. Wages are paid for labour’s human physical and mental effort."}]},{"id":"815352d0-89a7-4a77-b861-c250553a240a","cardType":"basic","points":1,"front":"Why does capital earn interest?","back":"Interest is the return on funds tied up in machinery and equipment.","mcqOptions":[{"text":"Interest is the return on funds tied up in machinery and equipment.","correct":true,"explanation":"Machinery and equipment are capital goods, and committing funds to them has an opportunity cost. Interest is the return earned on that tied-up capital."},{"text":"Interest is the return on labour used to operate machinery and equipment.","correct":false,"explanation":"The people operating equipment supply labour and receive wages. Interest is instead the return on funds tied up in the machinery and equipment themselves."},{"text":"Interest is the return on natural resources used for machinery and equipment.","correct":false,"explanation":"Natural resources are classified as land and earn rent. Interest is the reward for capital because funds are tied up in machinery and equipment."},{"text":"Interest is the return on risks taken when selling machinery and equipment.","correct":false,"explanation":"Taking commercial risks is associated with enterprise and earns profit. Interest is the return on capital funds committed to machinery and equipment."}]},{"id":"d4d665f7-f515-48d9-a2b5-4ba0f732df3e","cardType":"basic","points":2,"front":"Why does enterprise earn profit?","back":"Profit rewards organising the other factors and bearing the risk that output may not sell.","mcqOptions":[{"text":"Profit rewards organising the other factors and bearing the risk that output may not sell.","correct":true,"explanation":"Enterprise combines the other factors of production, makes decisions and bears uncertainty. Profit is the reward for taking the risk that the goods or services produced may not be sold."},{"text":"Profit rewards supplying labour and receiving a guaranteed income regardless of whether output sells.","correct":false,"explanation":"This confuses enterprise with labour and incorrectly treats income as guaranteed. Enterprise earns profit for organising resources and bearing the risk that output may not sell."},{"text":"Profit rewards owning land and receiving payment for allowing production to take place.","correct":false,"explanation":"Owning land earns rent, not profit, and does not necessarily involve organising production. Profit rewards enterprise for coordinating the other factors and accepting the risk of unsold output."},{"text":"Profit rewards lending finance at a fixed return without being involved in production decisions.","correct":false,"explanation":"A fixed return for lending finance is interest, while enterprise involves decision-making and risk-bearing. Profit is earned when the entrepreneur organises resources and output may not sell."}]},{"id":"01f74a48-43c9-4eeb-94d3-1665bf898824","cardType":"basic","points":1,"front":"What determines the amount of profit left for enterprise?","back":"Profit is what remains after rent, wages and interest are paid.","mcqOptions":[{"text":"Profit is what remains after rent, wages and interest are paid.","correct":true,"explanation":"Rent, wages and interest are payments to land, labour and capital. After these explicit factor rewards have been paid, the residual return belongs to enterprise as profit."},{"text":"Profit is what remains after sales revenue and dividends are paid.","correct":false,"explanation":"Sales revenue is money received rather than a factor cost, while dividends distribute profit to shareholders. The residual for enterprise is calculated after rent, wages and interest are paid."},{"text":"Profit is what remains after taxes, subsidies and depreciation are paid.","correct":false,"explanation":"These are financial or accounting adjustments, not the three factor rewards identified here. In this context, profit is the amount left after rent, wages and interest."},{"text":"Profit is what remains after capital, land and labour are paid.","correct":false,"explanation":"Capital, land and labour are factors of production, not the names of their payments. Their rewards are interest, rent and wages, which must be paid before profit remains."}]},{"id":"128aabba-cc2e-4321-b0d0-251fa8ea3846","cardType":"basic","points":1,"front":"Why must firms pay factor rewards?","back":"Because each factor is scarce, firms must pay to use it.","mcqOptions":[{"text":"Because each factor is scarce, firms must pay to use it.","correct":true,"explanation":"Factors of production have limited availability relative to wants, giving them an opportunity cost. Firms therefore need to offer rewards to obtain and use these scarce resources."},{"text":"Because each factor is unlimited, firms must pay to prevent excessive production.","correct":false,"explanation":"Unlimited resources would not need rationing through prices, and payment would not be required to secure them. Scarcity creates the need for firms to pay factor rewards."},{"text":"Because each factor is owned by the government, firms must pay a universal tax to use it.","correct":false,"explanation":"Factor ownership varies between households, firms and the state, so factor rewards are not simply universal taxes. Firms pay because resources are scarce and have alternative uses."},{"text":"Because each factor is identical, firms must pay to distinguish one resource from another.","correct":false,"explanation":"Factors differ in quality, skills and suitability, but payment is not needed to distinguish identical resources. Scarcity and the opportunity cost of using resources explain factor rewards."}]},{"id":"e1fdc044-7d7f-4561-83f1-72e306a24bec","cardType":"basic","points":2,"front":"How does a firm's use of a factor create household income?","back":"A firm's payment becomes income for whoever owns the resource.","mcqOptions":[{"text":"A firm's payment becomes income for whoever owns the resource.","correct":true,"explanation":"When a firm hires or uses a factor, its payment flows to the factor's owner. This creates household income through wages, rent, interest or profit, depending on the resource."},{"text":"A firm's payment becomes income for whoever buys the final product.","correct":false,"explanation":"Buyers spend income on goods and services rather than receiving factor income from that purchase. The firm's factor payment becomes income for the person or organisation owning the resource."},{"text":"A firm's payment becomes income for whichever competitor charges the lowest price.","correct":false,"explanation":"Competitors do not receive a firm's factor payments merely by offering lower prices. The payment goes to the owner who supplies the resource used in production."},{"text":"A firm's payment becomes income for the government that regulates the resource.","correct":false,"explanation":"Regulation alone does not make the government the recipient of a factor reward. Income goes to whoever owns or supplies the resource, although the government may separately receive tax revenue."}]},{"id":"45c98b43-8af4-485b-82d5-2730ff127c25","cardType":"basic","points":1,"front":"How do factor rewards relate to the circular flow of income?","back":"Factor rewards are household incomes flowing through the circular flow of income.","mcqOptions":[{"text":"Factor rewards are household incomes flowing through the circular flow of income.","correct":true,"explanation":"Households supply factors to firms and receive wages, rent, interest or profit. These payments form income that re-enters the economy and contributes to the circular flow."},{"text":"Factor rewards are household incomes flowing through the foreign exchange market.","correct":false,"explanation":"The foreign exchange market exchanges currencies, whereas factor rewards arise from supplying resources to firms. These household incomes are represented as flows within the circular flow of income."},{"text":"Factor rewards are household incomes flowing through the stock market.","correct":false,"explanation":"The stock market trades financial assets and does not describe the general movement of factor income. Wages, rent, interest and profit are payments shown in the circular flow."},{"text":"Factor rewards are household incomes flowing through the productivity cycle.","correct":false,"explanation":"Productivity concerns output produced per unit of input, not the movement of income between economic agents. Factor rewards are household incomes represented in the circular flow of income."}]},{"id":"2397fabd-7ced-4186-a8d0-b83efe1c4677","cardType":"basic","points":2,"front":"How do factor rewards link production to income distribution?","back":"They determine how income is distributed between different owners of resources.","mcqOptions":[{"text":"They determine how income is distributed between different owners of resources.","correct":true,"explanation":"Different resource owners receive different factor rewards: workers receive wages, landowners rent, capital owners interest and entrepreneurs profit. The pattern of rewards therefore affects income distribution."},{"text":"They determine how income is distributed between different buyers of products.","correct":false,"explanation":"Buyers spend income but do not receive factor rewards simply by purchasing products. These payments distribute income among the owners who supply land, labour, capital and enterprise."},{"text":"They determine how income is distributed between different levels of government.","correct":false,"explanation":"Government revenue distribution is a fiscal issue, not the direct role of factor rewards. Factor payments determine the incomes received by owners of the resources used in production."},{"text":"They determine how income is distributed between different types of currency.","correct":false,"explanation":"Currency types describe the medium in which transactions occur and do not identify income recipients. Factor rewards distribute income according to ownership of the resources used by firms."}]},{"id":"9ed02a4d-c522-4e69-ae3d-61b7dd46ea8a","cardType":"basic","points":2,"front":"Why can scarce skills receive higher wages?","back":"Scarce supply combined with strong demand raises the factor's price.","mcqOptions":[{"text":"Scarce supply combined with strong demand raises the factor's price.","correct":true,"explanation":"A scarce skill has limited supply, while strong employer demand increases competition to recruit it. The resulting market pressure raises its factor price, which for labour is the wage."},{"text":"Scarce supply combined with strong demand reduces the factor's price.","correct":false,"explanation":"This reverses the effect of market pressure. When demand is strong relative to a scarce supply, employers compete for the factor, causing its price or wage to rise."},{"text":"Scarce supply combined with strong demand leaves the factor's price unchanged.","correct":false,"explanation":"A fixed price would require conditions preventing demand and supply from influencing payment. Scarcity alongside strong demand creates upward pressure on the factor's market price."},{"text":"Scarce supply combined with strong demand raises the factor's quantity supplied automatically.","correct":false,"explanation":"Higher wages may encourage more people to acquire the skill over time, but the immediate market effect is a higher factor price. Quantity supplied does not automatically rise at once."}]},{"id":"0023bac9-cc3c-4898-bd0a-825d139ad2fb","cardType":"basic","points":2,"front":"What happens to the wage for a scarce skill when demand is high relative to supply?","back":"High demand relative to supply bids up the wage for that skill.","mcqOptions":[{"text":"High demand relative to supply bids up the wage for that skill.","correct":true,"explanation":"Employers compete for a limited number of suitably skilled workers when demand exceeds supply. This competition raises the wage needed to attract and retain those workers."},{"text":"High demand relative to supply bids down the wage for that skill.","correct":false,"explanation":"This reverses the bargaining pressure created by scarcity. When many employers want relatively few skilled workers, they compete by offering higher wages rather than reducing them."},{"text":"High demand relative to supply fixes the wage for that skill.","correct":false,"explanation":"A fixed wage would prevent demand and supply conditions from affecting the reward. Relative scarcity normally creates upward pressure on the wage for a highly demanded skill."},{"text":"High demand relative to supply eliminates the wage for that skill.","correct":false,"explanation":"Strong demand does not remove payment for a scarce skill; it increases employers' willingness to pay. The resulting competition bids the wage upward to secure the limited labour supply."}]},{"id":"267e9529-3398-4513-8933-2cca81c02dcd","cardType":"basic","points":1,"front":"What determines how far factor rewards create inequality?","back":"Ownership of factors is unequally distributed.","mcqOptions":[{"text":"Ownership of factors is unequally distributed.","correct":true,"explanation":"Factor rewards create greater inequality when ownership of land, labour, capital or enterprise is concentrated among fewer people, because those owners receive more of the resulting income."},{"text":"Productivity of factors is unequally distributed.","correct":false,"explanation":"Productivity affects the size of rewards but does not directly determine inequality between households. The key determinant is whether ownership of the factors themselves is distributed unequally."},{"text":"Demand for factors is equally distributed.","correct":false,"explanation":"Factor demand influences reward levels rather than explaining who receives them. Inequality arises when ownership of factors of production is unequally distributed between households."},{"text":"Prices of goods are unequally distributed.","correct":false,"explanation":"Unequal product prices do not by themselves determine how factor income is shared. The relevant cause is unequal ownership of the factors earning those rewards."}]},{"id":"82ec24e2-2db8-463e-808f-7b5baa47595e","cardType":"basic","points":2,"front":"Why is enterprise's reward distinct from capital's reward?","back":"Interest rewards capital, whereas profit rewards enterprise and risk-bearing.","mcqOptions":[{"text":"Interest rewards capital, whereas profit rewards enterprise and risk-bearing.","correct":true,"explanation":"Capital receives interest as payment for its use, while enterprise receives profit for organising production and accepting the uncertainty and risk of business decisions."},{"text":"Profit rewards capital, whereas interest rewards enterprise and risk-bearing.","correct":false,"explanation":"This reverses the factor-reward relationship. Interest is paid for using capital, whereas profit is the reward for enterprise and bearing business risk."},{"text":"Wages rewards capital, whereas rent rewards enterprise and risk-bearing.","correct":false,"explanation":"Wages reward labour and rent rewards land. Capital earns interest, while enterprise earns profit for organisation, innovation and risk-bearing."},{"text":"Rent rewards capital, whereas wages rewards enterprise and risk-bearing.","correct":false,"explanation":"Rent is associated with land and wages with labour, so neither describes these factors correctly. Capital earns interest and enterprise earns profit."}]},{"id":"b0431ed4-0845-49ae-8f79-015a8a1c8ff2","cardType":"basic","points":3,"front":"How does a logistics firm's spending show the matching of factors to rewards?","back":"Rent for its warehouse; wages for drivers; interest on its truck loan; profit for the owner.","mcqOptions":[{"text":"Rent for its warehouse; wages for drivers; interest on its truck loan; profit for the owner.","correct":true,"explanation":"The warehouse is land or premises, drivers provide labour, the truck loan supplies capital, and the owner receives profit for enterprise and risk-bearing."},{"text":"Wages for its warehouse; rent for drivers; profit on its truck loan; interest for the owner.","correct":false,"explanation":"This assigns each reward to the wrong factor. Premises incur rent, drivers receive wages, borrowing incurs interest, and the owner receives profit."},{"text":"Interest for its warehouse; profit for drivers; rent on its truck loan; wages for the owner.","correct":false,"explanation":"Interest is the payment for borrowed capital, not warehouse use, while wages reward drivers. Rent applies to premises and profit rewards the owner’s enterprise."},{"text":"Profit for its warehouse; interest for drivers; wages on its truck loan; rent for the owner.","correct":false,"explanation":"The rewards have been shifted between factors. Warehouse space earns rent, drivers earn wages, truck borrowing costs interest, and enterprise earns profit."}]},{"id":"f6149e48-c92d-431a-9e3a-701af0e2155f","cardType":"cloze","points":null,"front":"Land earns [ ], labour earns wages, capital earns interest and enterprise earns profit.","back":"Land earns rent, labour earns wages, capital earns interest and enterprise earns profit.","mcqOptions":[{"text":"rent","correct":true,"explanation":"Land earns rent because rent is the factor reward paid to owners for allowing land or property resources to be used in production."},{"text":"wages","correct":false,"explanation":"Wages are the reward for labour, not land. The standard factor-reward pairing gives land rent, labour wages, capital interest and enterprise profit."},{"text":"interest","correct":false,"explanation":"Interest rewards capital supplied to production, such as machinery or finance. Land receives rent because its owner provides a natural or property resource."},{"text":"profit","correct":false,"explanation":"Profit is the reward for enterprise, including organisation and risk-bearing. Landowners receive rent, while profit belongs to the entrepreneur."}]},{"id":"519e9752-e6d9-4349-9f48-3aa553f58d47","cardType":"cloze","points":null,"front":"Land earns rent, labour earns [ ], capital earns interest and enterprise earns profit.","back":"Land earns rent, labour earns wages, capital earns interest and enterprise earns profit.","mcqOptions":[{"text":"wages","correct":true,"explanation":"Labour earns wages because workers receive payment for supplying their time, effort and skills to the production process."},{"text":"rent","correct":false,"explanation":"Rent is the reward for land or property, not human work. Labour is paid wages in the standard classification of factor rewards."},{"text":"interest","correct":false,"explanation":"Interest is paid for the use of capital, such as borrowed finance or equipment. Workers supply labour and therefore receive wages."},{"text":"profit","correct":false,"explanation":"Profit rewards enterprise and risk-bearing rather than ordinary labour. The factor reward associated with supplying labour is wages."}]},{"id":"0298da4d-281c-4726-a8ef-5418657b220d","cardType":"cloze","points":null,"front":"Land earns rent, labour earns wages, capital earns [ ] and enterprise earns profit.","back":"Land earns rent, labour earns wages, capital earns interest and enterprise earns profit.","mcqOptions":[{"text":"interest","correct":true,"explanation":"Capital earns interest because its owner or lender receives payment for making financial or physical capital available for production."},{"text":"rent","correct":false,"explanation":"Rent is linked to land and property resources. Capital, including finance and equipment, earns interest when it is used in production."},{"text":"wages","correct":false,"explanation":"Wages compensate labour for work performed. Capital is a separate factor and receives interest as its corresponding reward."},{"text":"profit","correct":false,"explanation":"Profit is earned by enterprise for organising production and bearing risk. The reward for supplying capital is interest."}]},{"id":"2d0d7e90-a7e9-46ac-ae59-ef406cef5905","cardType":"cloze","points":null,"front":"A firm's factor payments become [ ] for the resource owners.","back":"A firm's factor payments become income for the resource owners.","mcqOptions":[{"text":"income","correct":true,"explanation":"Payments made by firms to factor owners become their income, such as wages for workers, rent for landowners, interest for lenders and profit for entrepreneurs."},{"text":"consumption","correct":false,"explanation":"Recipients may use income for consumption, but the factor payment itself is not consumption. It becomes income for the resource owner first."},{"text":"output","correct":false,"explanation":"Output is the quantity of goods and services produced, not a payment received by resource owners. Factor payments become their income."},{"text":"wealth","correct":false,"explanation":"Income is a flow received from factor ownership, whereas wealth is a stock of accumulated assets. Factor payments therefore become income."}]},{"id":"4732f66a-6740-4810-a9bf-7124aec19b0f","cardType":"cloze","points":null,"front":"If the supply of a factor is scarce and demand is strong, its reward is [ ].","back":"If the supply of a factor is scarce and demand is strong, its reward is higher.","mcqOptions":[{"text":"higher","correct":true,"explanation":"Scarcity limits the available supply while strong demand increases competition among buyers, bidding up the factor’s equilibrium reward."},{"text":"lower","correct":false,"explanation":"A scarce factor facing strong demand is likely to command a higher reward, not a lower one, because buyers compete for limited availability."},{"text":"unchanged","correct":false,"explanation":"The reward is unlikely to remain unchanged when supply is scarce and demand is strong. These conditions create upward pressure on its price."},{"text":"zero","correct":false,"explanation":"Scarcity and strong demand increase the factor’s value rather than eliminating its reward. A zero reward would provide no incentive for owners to supply it."}]},{"id":"81ea3aef-5098-453a-ad02-eb748d0640c3","cardType":"cloze","points":null,"front":"Profit is what remains after [ ] have been paid.","back":"Profit is what remains after rent, wages and interest have been paid.","mcqOptions":[{"text":"rent, wages and interest","correct":true,"explanation":"Profit is the residual reward to enterprise: revenue remaining after the other main factor payments, rent, wages and interest, have been deducted."},{"text":"profit, wages and interest","correct":false,"explanation":"Profit cannot normally be deducted as a prior factor payment when defining residual profit. The other payments are rent, wages and interest."},{"text":"rent, wages and profit","correct":false,"explanation":"Profit is what remains after costs are paid, so it cannot be included among the payments deducted before calculating itself. Interest must be included instead."},{"text":"rent, interest and taxes","correct":false,"explanation":"Taxes may reduce a firm’s remaining earnings, but they are not one of the three factor payments in this definition. Wages must replace taxes."}]},{"id":"f2cbb532-3714-45fe-8f1d-ba956af852de","cardType":"cloze","points":null,"front":"A scarce skill has demand that is high relative to its [ ].","back":"A scarce skill has demand that is high relative to its supply.","mcqOptions":[{"text":"supply","correct":true,"explanation":"A skill is scarce when relatively few workers can provide it. High demand compared with this limited supply tends to raise its wage or reward."},{"text":"productivity","correct":false,"explanation":"Productivity can influence a worker’s wage, but scarcity in this statement is defined by demand being high relative to supply."},{"text":"profit","correct":false,"explanation":"Profit is the reward for enterprise, not the quantity against which demand for a skill is compared. The relevant comparison is demand with supply."},{"text":"capital","correct":false,"explanation":"Capital is a separate factor of production. A scarce skill has demand high relative to the available supply of workers possessing that skill."}]},{"id":"e622da56-e72f-4ad3-8857-e9a64d5e5337","cardType":"cloze","points":null,"front":"Factor rewards connect the use of resources with the [ ] across households.","back":"Factor rewards connect the use of resources with the distribution of income across households.","mcqOptions":[{"text":"distribution of income","correct":true,"explanation":"Households receive income according to the factors they own and supply: rent, wages, interest or profit. Factor rewards therefore help determine income distribution."},{"text":"level of employment","correct":false,"explanation":"Factor use can affect employment, but the direct household connection described here is how factor rewards allocate income between different owners."},{"text":"volume of imports","correct":false,"explanation":"Imports concern international trade and are not the household outcome directly linked to factor rewards. Those rewards determine the distribution of income."},{"text":"rate of inflation","correct":false,"explanation":"Inflation measures changes in the general price level, not how factor income is shared among households. Factor rewards connect resources with income distribution."}]}]}],"examCountdown":null,"heading":"1.3.3 rewards to the factors of production","title":"1.3.3 rewards to the factors of production Flashcards","topbar":{"backHref":"/international-a-level/economics/cie/flashcards"},"topicSidebar":"$L38"}]}],"topicId":"2ab716f9-f7b0-4d3f-aa8c-e2027aa1b10b","walled":"$L39"}],"$L3a","$L3b"]