Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 2 - The Market System and the Circular Flow - Problems - Page 45: 4a

Answer

$10 billion

Work Step by Step

Labor is wages, land is rent, and capital is interest. You begin with 100 billion dollars. Subtract 60 billion for wages (labor) and you’re left with 40 billion. Subtract from that 10 billion for rent (land) and you have 30 billion. Finally, subtract 20 billion for interest (capital) and 10 billion is left for the last remaining factor of production, entrepreneurial ability.
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