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Q: Which of the following does not qualify as a source of factor income ?
  • A. Profit
  • B. Donation
  • C. Wages
  • D. Rent
Correct Answer: Option B - Factor income is income received from the factor of production. Factor income on use of land is called rent, income generated from labor is called wages and income generated from capital is called profit. Donation is not a source of factor income. In economic theory the four factors of production are labour, land, capital and enterpreneurship. Each of these factors gets a return for their input into production and this is called factor income.
B. Factor income is income received from the factor of production. Factor income on use of land is called rent, income generated from labor is called wages and income generated from capital is called profit. Donation is not a source of factor income. In economic theory the four factors of production are labour, land, capital and enterpreneurship. Each of these factors gets a return for their input into production and this is called factor income.

Explanations:

Factor income is income received from the factor of production. Factor income on use of land is called rent, income generated from labor is called wages and income generated from capital is called profit. Donation is not a source of factor income. In economic theory the four factors of production are labour, land, capital and enterpreneurship. Each of these factors gets a return for their input into production and this is called factor income.