![]() Land and other natural resources are immobile. It also involves a lot of variation in terms of soil composition and fertility. A piece of land can be used for various purposes, such as manufacturing of products, infrastructure development, and cultivating, etc. Land is regarded to be permanent because it is indestructible. That is why its supply does not increase with an increase in price. It is not man-made, and thus, its supply cannot be increased by human effort. Land is unique as its availability is fixed. These characteristics are listed as follows: There are some distinguishing characteristics associated with land that make it unique when compared to other factors. Thus, we see that several aspects of economic activity are influenced by natural resources,Ĭollectively termed resources by economists. Similarly, cheap and efficient modes of transportation depend on the topography of the land. Electricity supply depends on the availability of water, coal, and uranium, etc. Infrastructure, such as electricity, transportation, etc., depends on the land. The availability of mineral resources influences industrial prosperity. The nature of soil, climate conditions, and rainfall determine the quality and quantity of agricultural wealth in a country. The richness of natural resources also influences the economic prosperity of a country. ![]() ![]() Everything we use originates directly or indirectly from land. Land as a factor of production, however, refers to all the natural resources that are sourced from it. In an ordinary sense, Land implies soil or the surface of the earth. An entrepreneur receives profit in return. An entrepreneur refers to a person who bears the risk and uncertainties involved in the process of production and organizes the remaining factors of production. Capital receives an interest in return for factor services. Machinery is an example of the capital used in production. Similarly, capital involves fixed as well as working capital. Laborers receive wages in return for their factor services. Labor involves physical as well as mental input. Land earns rent as factor income in return for its factor services. An example of land as a factor is a farm. Land, as a factor, involves the land as well as its extracted resources. This income is then used for the purchase of final goods and services. Businesses employ these factors from the factor market and in return pay factor income to them. The four main factors of production-land, labor, capital, and the entrepreneur-are For instance, raw materials are considered non-factor inputs. Non-factor inputs are secondary inputs that are not directly used in the production process. These inputs are directly used for manufacturing goods and services. Factor inputs are primary inputs used in the production process. ThereĪre mainly two types of inputs: factor inputs and non-factor inputs. The process of production involves the transformation of inputs into outputs.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |