Land is a Natural & Primary Factor of Production ↓
Land is non created yesteryear mankind only it is a gift of nature. So, it is called every bit natural element of production. It is too called every bit master or main element of production. Normally, terra firma agency surface of earth. But inward economics, terra firma has a wider meaning. Take a skillful hold off at the next film :-
Image Credits © Amanda Platt.
From the higher upward film it is clear that terra firma includes earth's surface in addition to resources higher upward 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 gratuitous gift of nature
Land is a gratuitous gift of nature to mankind. It is non a man-made element only is a natural factor.
2. Land is a main element of production
Though all factors are required for production, terra firma puts foundation for production process. Starting betoken of production procedure is an acquisition of land. So, it is a main factor.
3. Land has perfectly inelastic supply
From society's betoken of view, render of terra firma is perfectly inelastic i.e. fixed inward quantity. Neither it tin live increased nor decreased. Simply, yous tin non modify size of the earth. But from private betoken of view, its render is relatively elastic.
4. Land has gradability
Land varies from percentage to percentage on the footing of fertility. Some terra firma are to a greater extent than fertile in addition to unopen to are non at all. So, fertility wise, grading of terra firma is possible. So, inward this way, terra firma has gradability.
5. Land is a passive factor
Land itself doesn't create anything alone. It is a passive factor. It needs assistance of Labour, Capital, Entrepreneur, etc. Like labour in addition to entrepreneur, it doesn't operate on its ain initiative. So it is a passive factor.
6. Land may accept diminishing returns
Here, render agency quantity of crops. By using fertility of terra firma alongside the assistance of working capital 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 guide demand in addition to for producing such goods, terra firma is indirectly demanded. So, every bit a factor, terra firma 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 yesteryear social club yesteryear putting whatever efforts in addition to paying whatever price. So, for society, render cost of terra firma is zero.
But, because for the buy of terra firma or for its improvement, private has to pay sure as shooting price, in addition to thus its render cost 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 might of terra firma is permanent in addition to indestructible. Its fertility tin live destroyed every bit good every bit restored yesteryear human efforts.
10. Land is perfectly immobile
Mobility agency might to move. Movement of terra firma from i house to unopen to other is impossible. Thus, physically, terra firma is perfectly immobile. But it has sure as shooting occupational mobility because it tin live used for multifariousness of occupations, similar agricultural occupation or for construction of houses.
11. Land has a site or place value
Every slice of terra firma has its sure as shooting site or place value. Such value depends upon lineament of its location. Land most to sources of raw materials in addition to other infrastructure facilities ever taste high site value. Here accessibility of terra firma plays an of import role.
12. Land earns rent every bit a vantage for its use
Rent is a vantage for the occupation of land. Classical economists similar Ricardo connected rent alongside fertility of terra firma whereas modern economists similar Marshall in addition to Javons stated that terra firma earns rent because of its scarcity.
