Multiple Choice
Variable inputs are defined as any resource that:
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0. Basic Principles of Economics
Factors of Production
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Educated people may generate ideas that increase production. These ideas are best classified as which factor of production?
A
Entrepreneurship
B
Physical capital
C
Land
D
Human capital
Verified step by step guidance1
Step 1: Understand the four main factors of production in microeconomics: Land, Labor (Human Capital), Physical Capital, and Entrepreneurship.
Step 2: Define each factor: Land refers to natural resources; Physical Capital includes machinery and tools; Human Capital is the knowledge and skills workers possess; Entrepreneurship involves the ability to innovate, take risks, and organize production.
Step 3: Analyze the problem statement: 'Educated people may generate ideas that increase production.' This highlights innovation and idea generation, which are key traits of entrepreneurship.
Step 4: Recognize that while education contributes to Human Capital, the act of generating new ideas and organizing production is the role of Entrepreneurship.
Step 5: Conclude that the factor of production best classified for generating ideas that increase production is Entrepreneurship.
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