Question

State the three components of Income from Property and Entrepreneurship.

Answer 1

1. Rent: Rent is the payment made for the use of land or other immovable property. It includes various charges such as maintenance costs, repair expenses, and interest on the mortgage.
2. Interest: Interest is the payment made for the use of money for a certain period. It is the reward given for the services of capital.
3. Profit: Profit is the income earned by an entrepreneur for organising and managing the production of goods and services. Pure or economic profit refers to the excess of total revenue over both explicit and implicit costs.