Q. Which of the following is called the minimum payment to the factor of production?
Answer: Transfer Payment
Notes: The factors of production are the inputs to the production process. There are three basic factors of production: land, labour, capital. Rent is the income paid for the use and received by the land owner. Wages are wages paid for by someone else's labor and all income derived from one's own labor. Modern theory of rent: It is the difference between the real income of a factor unit and its transfer income. So transfer income is the minimum payment required to put a factor of production into its current use. It is also known as opportunity cost.