F.4 Econ=P(15 marks)

1.
Edwin is an entrepreneur because he own the business, bear the risk of loss and run the business.
Edwin is a labour becuase he provide the effort on production directly. He will provide physical effort on the farmland to produce the product.

2.a.
Mr. Lee may use basic salary + commission. The reason is that it can encourage the John to increase its output by getting more commission. Higher incentive of work.

b.
Using piece, the reason is that it can ensure John to find customers and increase the sales volume in order to get a higher salary.

From the viewpoint of Mr. Lee , it can reduce the cost of supervision because John will automatically work in order to get higher salary. John will have less chance to be lazy.Higher incentive to work and higher productivity can be expected,

From the viewpoint of John, his income is unstable because the income is depend on the number of customers he can find. However, he will not have the same amount of customers every month, therefore his income is unstable, it may affect his own financial planning.

1. Edwin belongs to entrepreneurship.He is responsible fo making the final decision of the important matters.Also, he is responsibe for bearing the risks,to face all uncertainties of business.

2. a) Mr.Lee uses to pay time rate to Andrew as the output is difficult to calculate and his work is not standardized.
b).Mr.Lee uses this wage payment method because the productivity of workers can increase.It is good for Mr.Lee as the cost of monitoring the workers is saved since they have a higher incentive to work.However, it is not good for John because he may have unstable income.