Question

2. 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 labour,​

Answer 1

A) A river from which a company draws water is called land.

Step-by-step explanation:

There are mainly 4 Factors of Production and these are:

1. Labor

2. Land

3. Capital

4. Entrepreneurship

• Labor doesn't refer to the owner of the company. It refers to the work that is being done in order to finish a particular project or work. This makes choice D incorrect.
• An enterprise refers to the entire company or business. It doesn't limit itself to the supervisors involved. This makes choice C incorrect.
• Capital in the form of money is not a factor of production. Raising finance for a company means raising money. An example of capital as a factor of production is purchasing an equipment for commercial/business purposes. This makes choice B incorrect.
• When it comes to "land" as a factor of production, it refers to the natural resources, which means it includes not only the forests, mountains and the like but also the oceans, rivers, lakes, etc. as long as it is being used in the production process. This makes choice A correct.