Which of the following statements is NOT true with respect to the economic factors of production?

• A. Land, labor, capital, and entrepreneurship are considered the main factors of production.
• B. Capital refers only to financial assets such as money and stocks.
• C. Labor represents the human effort used in the production of goods and services.
• D. Entrepreneurship involves organizing the other factors of production and taking on business risks.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the four main economic factors of production: land, labor, capital, and entrepreneurship. Each has a specific definition and role in the production process.
2. Step 2: Recall that 'land' refers to natural resources, 'labor' is the human effort involved, 'capital' means physical assets like machinery and tools (not financial assets), and 'entrepreneurship' is the ability to organize resources and take risks.
3. Step 3: Analyze the statement 'Capital refers only to financial assets such as money and stocks.' This is incorrect because in economics, capital typically means physical capital (machines, buildings), not financial capital.
4. Step 4: Verify the other statements: labor as human effort, entrepreneurship as organizing and risk-taking, and land as natural resources are all true according to economic definitions.
5. Step 5: Conclude that the statement about capital being only financial assets is NOT true with respect to the economic factors of production.