FACTORS OF PRODUCTION TOPIC TEST

 

FACTORS OF PRODUCTION

TOPIC TEST

SECTION A: Multiple Choice (10 Marks)

1. Which of the following is NOT considered a factor of production?
   a) Land
   b) Labor
   c) Capital
   d) Money  

2. Which factor of production includes all natural resources?
   a) Labor
   b) Land
   c) Capital
   d) Entrepreneurship  

3. Which factor of production refers to human effort used in the production process?
   a) Capital
   b) Land
   c) Labor
   d) Entrepreneurship  

4. Tools, machinery, and equipment are examples of which factor of production?
   a) Land
   b) Capital
   c) Labor
   d) Entrepreneurship  

5. Which factor of production involves organizing and managing a business?
   a) Labor
   b) Land
   c) Capital
   d) Entrepreneurship  

6. The concept of scarcity is related to:
   a) Unlimited resources
   b) Limited resources
   c) Increasing prices
   d) Decreasing choices  

7. Which of the following is an example of land as a factor of production?
   a) A tractor
   b) A farmer's work
   c) A gold mine
   d) Money used to buy seeds  

8. Which of the following is an example of capital as a factor of production?
   a) A river
   b) A factory building
   c) A shop assistant
   d) The owner of a business  

9. The reward for labor is:
   a) Rent
   b) Wages
   c) Interest
   d) Profit
   
   

10. Which of the following is NOT a characteristic of labour?
    a) It involves human effort
    b) It can be physical or mental
    c) It is a free resource
    d) It is a factor of production  

SECTION A: Matching Items (10 Marks)

Match the items in Column A with the correct descriptions in Column B.

Column A	Column B
1. Land	a) The payment for the use of capital
2. Labour	b) The risk-taking factor of production
3. Capital	c) All natural resources used in production
4. Entrepreneurship	d) Human effort used in the production process
5. Scarcity	e) Payment for land
6. Rent	f) Man-made resources used in production
7. Wages	g) The basic economic problem of limited resources
8. Interest	h) Payment for labour
9. Profit	i) The reward for entrepreneurship
10. Choice	j) The act of selecting among alternatives due to scarcity

 

SECTION B: True or False (10 Marks)

1. Land includes only the surface of the earth.  

2. Labour can be both physical and mental. 

3. Capital refers only to money.

4. Entrepreneurship involves risk-taking.  

5. Scarcity means there are unlimited resources. 

6. Price is not affected by scarcity.  

7. Choice is necessary because we have limited resources. 

8. A farmer using a tractor is an example of labor. 

9. The reward for land is wages.

10. All resources are equally scarce.
    
    

SECTION B: Short Answer (10 Marks)

1. Define the term "factors of production."  

2. List the four main factors of production.  

3. Give two examples of "land" in agriculture.  

4. Explain the difference between "labor" and "entrepreneurship."  

5. Why is capital important in farming?  

6. What is the basic problem of scarcity?  

7. How does scarcity lead to choice?  

8. What determines the price of a commodity?
   
   

9. Why is entrepreneurship important in agriculture?
   
   

10. What are the rewards for each factor of production?