Land is a Natural & Primary Factor of Production ↓
Land is non created past times mankind simply it is a gift of nature. So, it is called equally natural element of production. It is besides called equally master copy or main element of production. Normally, solid reason way surface of earth. But inwards economics, solid reason has a wider meaning. Take a practiced await at the next film :-
Image Credits © Amanda Platt.
From the inwards a higher house film it is clear that solid reason includes earth's surface in addition to resources inwards a higher house in addition to below the surface of the earth. It includes next natural resources :-
- On the surface (e.g. soil, agricultural land, etc.)
- Below the surface (e.g. mineral resources, rocks, reason water, etc.)
- Above the surface (e.g. climate, rain, infinite monitoring, etc.)
Peculiarities / Characterisitcs / Features of Land ↓
1. Land is a costless gift of nature
Land is a costless gift of nature to mankind. It is non a man-made element simply is a natural factor.
2. Land is a main element of production
Though all factors are required for production, solid reason puts foundation for production process. Starting shout out for of production procedure is an acquisition of land. So, it is a main factor.
3. Land has perfectly inelastic supply
From society's shout out for of view, render of solid reason is perfectly inelastic i.e. fixed inwards quantity. Neither it tin live increased nor decreased. Simply, yous tin non alter size of the earth. But from private shout out for of view, its render is relatively elastic.
4. Land has gradability
Land varies from portion to portion on the footing of fertility. Some solid reason are to a greater extent than fertile in addition to about are non at all. So, fertility wise, grading of solid reason is possible. So, inwards this way, solid reason has gradability.
5. Land is a passive factor
Land itself doesn't attain anything alone. It is a passive factor. It needs assistance of Labour, Capital, Entrepreneur, etc. Like labour in addition to entrepreneur, it doesn't function on its ain initiative. So it is a passive factor.
6. Land may convey diminishing returns
Here, render way quantity of crops. By using fertility of solid reason amongst the assistance of majuscule in addition to labour continuously, returns gets diminished because of reduction inwards fertility.
7. Land has a derived demand
Demand for agricultural goods is a conduct demand in addition to for producing such goods, solid reason is indirectly demanded. So, equally a factor, solid reason has a derived demand from consumer's shout out for of view.
8. Land has no social cost
Land is a gift of nature to society. It is already inwards existence. Land is no created past times guild past times putting whatever efforts in addition to paying whatever price. So, for society, render toll of solid reason is zero.
But, because for the buy of solid reason or for its improvement, private has to pay certainly price, in addition to thence its render toll for private is non zero.
9. Land is a indestructible factor
Land is durable in addition to non perishable. It has a long life. No i tin destroy the land. The mightiness of solid reason is permanent in addition to indestructible. Its fertility tin live destroyed equally good equally restored past times human efforts.
10. Land is perfectly immobile
Mobility way mightiness to move. Movement of solid reason from i house to about other is impossible. Thus, physically, solid reason is perfectly immobile. But it has certainly occupational mobility because it tin live used for multifariousness of occupations, similar agricultural utilization or for construction of houses.
11. Land has a site or place value
Every slice of solid reason has its certainly site or place value. Such value depends upon character of its location. Land most to sources of raw materials in addition to other infrastructure facilities ever bask high site value. Here accessibility of solid reason plays an of import role.
12. Land earns rent equally a vantage for its use
Rent is a vantage for the utilization of land. Classical economists similar Ricardo connected rent amongst fertility of solid reason whereas modern economists similar Marshall in addition to Javons stated that solid reason earns rent because of its scarcity.
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