Which factor of production typically provides the best opportunity for increases in productivity?

• A. Entrepreneurship
• B. Land
• C. Labor
• D. Capital

Answer: (D)

Verified step by step guidance

1. Understand the four main factors of production: Land, Labor, Capital, and Entrepreneurship. Each plays a different role in the production process.
2. Recall that Land refers to natural resources, Labor refers to human effort, Entrepreneurship involves organizing resources and taking risks, and Capital refers to man-made resources like machinery, tools, and equipment.
3. Consider how productivity increases occur: productivity improves when output per unit of input rises, often through better tools, technology, or methods.
4. Analyze which factor most directly enables improvements in technology and tools, thereby increasing productivity. Capital goods (machinery, equipment) are designed to enhance efficiency and output.
5. Conclude that Capital typically provides the best opportunity for increases in productivity because investments in capital goods allow workers to produce more output in less time.