Real Estate Council of Alberta Fundamentals Practice Exam

Which of the following lists the factors of production?

1. Land, time, energy, strategy

2. Retail, wholesale, service, manufacturing

3. Land, labor, capital, entrepreneurship

4. Finance, management, marketing, operations

The correct answer is: Land, labor, capital, entrepreneurship

The correct choice highlights the fundamental components that contribute to the production of goods and services in an economy. Specifically, it outlines four primary factors: land, labor, capital, and entrepreneurship. - **Land** refers to all natural resources used in production, including the physical land itself, minerals, water, and other raw materials. - **Labor** signifies the human effort involved in the production process, encompassing all types of work performed by individuals. - **Capital** represents the tools, machinery, and buildings used to produce goods and services; it reflects the financial investment necessary for production activities. - **Entrepreneurship** is the drive and innovation needed to bring together the other factors of production to create and market products, as well as the willingness to take risks to start and manage businesses. Understanding these factors is essential in real estate and economic studies, as they form the basis for how resources are utilized and how economic output is generated. The other options, while they list important concepts in their respective areas, do not accurately encompass the fundamental factors of production as recognized in economics.