The four agents of production in classical economics are:
Correct Answer
A) Land, labor, capital and coordination
Why this is correct: The four classical agents of production are land, labor, capital, and coordination (entrepreneurship). Each must be compensated, with residual income accruing to land. Why the other choices are wrong: Supply, demand, price and quantity are market forces, not production agents. Buyers, sellers, brokers and lenders are market participants. Cost, value, price and worth are valuation concepts. Exam tip: Remember 'land, labor, capital, coordination' as the four agents.
Why This Is the Correct Answer
Why this is correct: The four classical agents of production are land, labor, capital, and coordination (entrepreneurship). Each must be compensated, with residual income accruing to land. Why the other choices are wrong: Supply, demand, price and quantity are market forces, not production agents. Buyers, sellers, brokers and lenders are market participants. Cost, value, price and worth are valuation concepts. Exam tip: Remember 'land, labor, capital, coordination' as the four agents.
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