Economics Study Set 17
Quiz 2 :
The largest economy on the earth is the economy of United States considering the value of GDP $15.685 trillion according to the data of 2012. The main reason behind the developed nature of economy is its factors of productions. The factors of productions in the America are more productive than that of other nations in the world. The United States remained larger than other countries because it has developed a unique combination of population and prosperity. The United States is optimally utilizing its growing population for the purpose of development. If the population is utilized efficiently, then a country would be able to maintain its per capita income stable. Considering the productivity and efficiency of workforce, the United States has remained larger than economies with much larger labor force.
A factor of production is an input which is used in the process of producing goods and services. Land, labor, capital, and entrepreneurship are considered as the main four factors of production. These factors of production play an important role in the process of producing goods and services. One would have sold a factor of production on a market considering the compensation. Usually, wages are paid for the use of labor, rent is for the use of land, interest is for the use of capital, and profit is for the entrepreneurship. If someone is working in a firm, then it means that he/she selling a factor of production considering that labor is a production input.
The per capita income in the Connecticut is greater than that of in New Mexico considering the spread of industrialization, and education in Connecticut. Comparatively, household income in Connecticut is higher than New Mexico. Connecticut is relatively more developed than New Mexico in terms of education. Total income of the state is taken in to the account while measuring the per capita income. Thus, considering the development in Connecticut, the per capita income in Connecticut is greater than that of in New Mexico.