Land is a Natural & Primary Factor of Production ↓
Land is non created past times mankind exactly it is a gift of nature. So, it is called every bit natural component subdivision of production. It is too called every bit original or master copy component subdivision of production. Normally, dry reason agency surface of earth. But inward economics, dry reason has a wider meaning. Take a expert await at the next motion painting :-
Image Credits © Amanda Platt.
From the inward a higher house motion painting it is clear that dry reason includes earth's surface in addition to resources inward 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 gratis gift of nature
Land is a gratis gift of nature to mankind. It is non a man-made component subdivision exactly is a natural factor.
2. Land is a master copy component subdivision of production
Though all factors are required for production, dry reason puts foundation for production process. Starting betoken of production procedure is an acquisition of land. So, it is a master copy factor.
3. Land has perfectly inelastic supply
From society's betoken of view, render of dry reason is perfectly inelastic i.e. fixed inward quantity. Neither it tin flame live increased nor decreased. Simply, yous tin flame non modify size of the earth. But from private betoken of view, its render is relatively elastic.
Advertiser
4. Land has gradability
Land varies from portion to portion on the footing of fertility. Some dry reason are to a greater extent than fertile in addition to around are non at all. So, fertility wise, grading of dry reason is possible. So, inward this way, dry reason has gradability.
5. Land is a passive factor
Land itself doesn't hit anything alone. It is a passive factor. It needs aid 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 agency quantity of crops. By using fertility of dry reason amongst the aid of upper-case alphabetic character in addition to labour continuously, returns gets diminished because of reduction inward fertility.
7. Land has a derived demand
Demand for agricultural goods is a conduct demand in addition to for producing such goods, dry reason is indirectly demanded. So, every bit a factor, dry reason has a derived demand from consumer's betoken of view.
8. Land has no social cost
Land is a gift of nature to society. It is already inward existence. Land is no created past times lodge past times putting whatsoever efforts in addition to paying whatsoever price. So, for society, render toll of dry reason is zero.
But, because for the buy of dry reason or for its improvement, private has to pay surely price, then 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 1 tin flame destroy the land. The mightiness of dry reason is permanent in addition to indestructible. Its fertility tin flame live destroyed every bit good every bit restored past times human efforts.
10. Land is perfectly immobile
Mobility agency mightiness to move. Movement of dry reason from 1 house to around other is impossible. Thus, physically, dry reason is perfectly immobile. But it has surely occupational mobility because it tin flame live used for multifariousness of occupations, similar agricultural job or for construction of houses.
11. Land has a site or place value
Every slice of dry reason has its surely site or place value. Such value depends upon lineament of its location. Land close to sources of raw materials in addition to other infrastructure facilities ever taste high site value. Here accessibility of dry reason plays an of import role.
12. Land earns rent every bit a vantage for its use
Rent is a vantage for the job of land. Classical economists similar Ricardo connected rent amongst fertility of dry reason whereas modern economists similar Marshall in addition to Javons stated that dry reason earns rent because of its scarcity.
