Economists Classify Energy and Water as Part of Which Factor

question 125

Multiple Choice

Economists classify energy and water as part of which factor of production?

• A) land
• B) labor
• C) capital
• D) entrepreneurship
• E) land if undeveloped and capital if developed

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Definitions:

Direct Material

Raw materials that are directly traceable and allocable to the production of goods or services.

Direct Labor

The cost of wages for workers who are directly involved in producing goods or providing services.

Overhead

Indirect costs not directly associated with the production of goods or services, such as administrative expenses and rent.

Variable Production Costs

Variable production costs are expenses that vary directly with the level of production, such as raw materials and direct labor costs.